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


                      NOMURA ASSET ACCEPTANCE CORPORATION,

                                    Depositor


                         NOMURA CREDIT & CAPITAL, INC.,

                                     Seller


                            GMAC MORTGAGE CORPORATION

                                    Servicer


                                       and


                            JPMORGAN CHASE BANK, N.A.

                              Trustee and Custodian

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

                         POOLING AND SERVICING AGREEMENT

                          Dated as of February 1, 2005


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


                       NOMURA ASSET ACCEPTANCE CORPORATION

               MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-AR1

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>

ARTICLE I            DEFINITIONS..................................................................................4
    Section 1.01      Defined Terms...............................................................................4
    Section 1.02      Allocation of Certain Interest Shortfalls..................................................42

ARTICLE II           CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES.....................................44
    Section 2.01      Conveyance of Trust Fund...................................................................44
    Section 2.02      Acceptance of the Mortgage Loans...........................................................45
    Section 2.03      Representations, Warranties and Covenants of the Servicer and the Seller...................48
    Section 2.04      Representations and Warranties of the Depositor............................................53
    Section 2.05      Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases............54
    Section 2.06      Issuance of the REMIC I Regular Interests and the Class R Certificates.....................55
    Section 2.07      Conveyance of the REMIC I Regular Interests ...............................................55
    Section 2.08      Issuance of Residual Certificates..........................................................56
    Section 2.09      Establishment of Trust.....................................................................56

ARTICLE III          ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS..........................................57
    Section 3.01      The Servicer to Act as Servicer............................................................57
    Section 3.02      Due-on-Sale Clauses; Assumption Agreements.................................................58
    Section 3.03      Subservicers...............................................................................59
    Section 3.04      Documents, Records and Funds in Possession of the Servicer To Be Held for Trustee..........60
    Section 3.05      Maintenance of Hazard Insurance............................................................61
    Section 3.06      Presentment of Claims and Collection of Proceeds...........................................62
    Section 3.07      Maintenance of Insurance Policies..........................................................62
    Section 3.08      Reserved...................................................................................63
    Section 3.09      Realization Upon Defaulted Mortgage Loans; Determination of Excess
                      Liquidation Proceeds and Realized Losses; Repurchases of Certain Mortgage Loans............63

    Section 3.10      Servicing Compensation.....................................................................65
    Section 3.11      REO Property...............................................................................65
    Section 3.12      Liquidation Reports........................................................................66
    Section 3.13      Annual Certificate as to Compliance........................................................66
    Section 3.14      Annual Independent Certified Public Accountants' Servicing Report..........................67
    Section 3.15      Books and Records..........................................................................67
    Section 3.16      The Trustee................................................................................68
    Section 3.17      REMIC-Related Covenants....................................................................68
    Section 3.18      Reimbursement of Costs and Expenses........................................................69
    Section 3.19      Release of Mortgage Files..................................................................69

                                                        -i-
</TABLE>

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<TABLE>
<CAPTION>
<S>                                                                                                            <C>
    Section 3.20      Documents, Records and Funds in Possession of the Servicer to be held for Trustee..........70
    Section 3.21      Possession of Certain Insurance Policies and Documents.....................................70
    Section 3.22      Annual Certificate as to Compliance........................................................70
    Section 3.23      UCC........................................................................................72
    Section 3.24      Optional Purchase of Defaulted Mortgage Loans..............................................72

ARTICLE IV           ACCOUNTS....................................................................................73
    Section 4.01      Collection of Mortgage Loan Payments; Custodial Account....................................73
    Section 4.02      Permitted Withdrawals From the Custodial Account...........................................75
    Section 4.03      Reports to Trustee.........................................................................76
    Section 4.04      Collection of Taxes; Assessments and Similar Items; Escrow Accounts........................77
    Section 4.05      Adjustments to Mortgage Rate and Scheduled Payment.........................................78
    Section 4.06      Distribution Account.......................................................................78
    Section 4.07      Permitted Withdrawals and Transfers from the Distribution Account..........................79
    Section 4.08      Duties of the Credit Risk Manager; Termination.............................................81
    Section 4.09      Limitation Upon Liability of the Credit Risk Manager.......................................82

ARTICLE V            ADVANCES AND DISTRIBUTIONS..................................................................83
    Section 5.01      Advances; Advance Facility.................................................................83
    Section 5.02      Compensating Interest Payments.............................................................86
    Section 5.03      REMIC Distributions........................................................................86
    Section 5.04      Reserved...................................................................................86
    Section 5.05      Reserved...................................................................................86
    Section 5.06      Distributions on the Certificates..........................................................87
    Section 5.07      Allocation of Realized Losses .............................................................93
    Section 5.08      Prepayment Charges.........................................................................95
    Section 5.09      Monthly Statements to Certificateholders...................................................96
    Section 5.10      Reserved...................................................................................98
    Section 5.11      REMIC I Allocations........................................................................98
    Section 5.12      Class P Certificate Account...............................................................100
    Section 5.13      Basis Risk Shortfall Reserve Fund.........................................................100

ARTICLE VI           THE CERTIFICATES...........................................................................102
    Section 6.01      The Certificates..........................................................................102
    Section 6.02      Certificate Register; Registration of Transfer and Exchange of Certificates...............103
    Section 6.03      Mutilated, Destroyed, Lost or Stolen Certificates.........................................106
    Section 6.04      Persons Deemed Owners.....................................................................106
    Section 6.05      Access to List of Certificateholders' Names and Addresses.................................107
    Section 6.06      Book-Entry Certificates...................................................................107
    Section 6.07      Notices to Depository.....................................................................108
    Section 6.08      Definitive Certificates...................................................................108
    Section 6.09      Maintenance of Office or Agency...........................................................108

ARTICLE VII          THE DEPOSITOR AND THE SERVICER.............................................................110
    Section 7.01      Liabilities of the Depositor and the Servicer.............................................110


                                                       -ii-
</TABLE>

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<TABLE>
<CAPTION>
<S>                                                                                                            <C>
    Section 7.02      Merger or Consolidation of the Depositor or the Servicer..................................110
    Section 7.03      Indemnification of Depositor and the Servicer.............................................110
    Section 7.04      Limitations on Liability of the Depositor, the Servicer and Others........................111
    Section 7.05      Servicer Not to Resign....................................................................112
    Section 7.06      Termination of Servicer Without Cause; Appointment of Special Servicer....................112

ARTICLE VIII         DEFAULT; TERMINATION OF SERVICER...........................................................114
    Section 8.01      Servicer Default..........................................................................114
    Section 8.02      Trustee to Act; Appointment of Successor..................................................115
    Section 8.03      Notification to Certificateholders........................................................117
    Section 8.04      Waiver of Servicer Defaults...............................................................117

ARTICLE IX           CONCERNING THE TRUSTEE AND THE CUSTODIAN...................................................118
    Section 9.01      Duties of Trustee.........................................................................118
    Section 9.02      Certain Matters Affecting the Trustee.....................................................119
    Section 9.03      Trustee Not Liable for Certificates or Mortgage Loans.....................................121
    Section 9.04      Trustee May Own Certificates..............................................................122
    Section 9.05      Trustee's Compensation and Expenses; Indemnification......................................122
    Section 9.06      Eligibility Requirements for Trustee......................................................123
    Section 9.07      Insurance.................................................................................123
    Section 9.08      Resignation and Removal of Trustee........................................................123
    Section 9.09      Successor Trustee.........................................................................124
    Section 9.10      Merger or Consolidation of Trustee........................................................124
    Section 9.11      Appointment of Co-Trustee or Separate Trustee.............................................125
    Section 9.12      Tax Matters...............................................................................126
    Section 9.13      Custodian's Fees and Expenses.............................................................128
    Section 9.14      Indemnification of Custodian..............................................................128
    Section 9.15      Reliance of Custodian.....................................................................129

ARTICLE X            TERMINATION................................................................................131
    Section 10.01     Termination upon Liquidation or Repurchase of all Mortgage Loans..........................131
    Section 10.02     Final Distribution on the Certificates....................................................131
    Section 10.03     Additional Termination Requirements.......................................................133

ARTICLE XI           MISCELLANEOUS PROVISIONS...................................................................134
    Section 11.01     Amendment.................................................................................134
    Section 11.02     Recordation of Agreement; Counterparts....................................................135
    Section 11.03     GOVERNING LAW.............................................................................135
    Section 11.04     Intention of Parties......................................................................135
    Section 11.05     Notices...................................................................................136
    Section 11.06     Severability of Provisions................................................................137
    Section 11.07     Assignment................................................................................137
    Section 11.08     Limitation on Rights of Certificateholders................................................137
    Section 11.09     Certificates Nonassessable and Fully Paid.................................................138


                                                       -iii-
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<PAGE>

EXHIBITS

Exhibit A-1       Form of Class I-A-1, Class I-A-2, Class II-A-1, Class II-A-2
                  and Class II-A-3 Certificates
Exhibit A-2       Form of Class M-[1][2][3][4][5] Certificates
Exhibit A-3       Form of Class X Certificates
Exhibit A-4       Form of Class P Certificates
Exhibit A-5       Form of Class R Certificates
Exhibit B         Mortgage Loan Schedule
Exhibit C-1       Form of Initial Certification
Exhibit C-2       Form of Interim Certification
Exhibit C-3       Form of Final Certification
Exhibit D         Form of Transfer Affidavit
Exhibit E         Form of Transferor Certificate
Exhibit F         Form of Investment Letter (Non-Rule 144A)
Exhibit G         Form of Rule 144A Investment Letter
Exhibit H         Form of Request for Release
Exhibit I         DTC Letter of Representations
Exhibit J         Schedule of Mortgage Loans with Lost Notes
Exhibit K         Prepayment Charge Schedule
Exhibit L         Form of Servicer's Certification
Exhibit M         Form of Trustee's Certification
Exhibit N         Appendix E of the Standard & Poor's Glossary For File
                  Format For LEVELS(R) Version 5.6 Revised



                                      -iv-

<PAGE>




         POOLING AND SERVICING AGREEMENT, dated as of February 1, 2005, among
NOMURA ASSET ACCEPTANCE CORPORATION, a Delaware corporation, as depositor (the
"Depositor"), NOMURA CREDIT & CAPITAL, INC., a Delaware corporation, as seller
(in such capacity, the "Seller"), GMAC MORTGAGE CORPORATION, a Pennsylvania
corporation, as servicer (the "Servicer") and JPMORGAN CHASE BANK, N.A., a
national banking association, not in its individual capacity, but solely as
trustee (the "Trustee") and as custodian (the "Custodian").

                              PRELIMINARY STATEMENT

         The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates.

                                     REMIC I
                                     -------

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC I." The R-I Interest will represent the sole
class of "residual interests" in REMIC I for purposes of the REMIC Provisions
(as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the Uncertificated REMIC I Pass-Through
Rate, the Initial Uncertificated Principal Balance, and for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests. None of the REMIC I
Regular Interests will be certificated.

<TABLE>
<CAPTION>
                                                          Uncertificated
                         Initial Uncertificated               REMIC I                Assumed Final Distribution
      Designation          Principal Balance             Pass-Through Rate                    Date(1)
      -----------          -----------------             -----------------                    -------
<S>                     <C>                                     <C>                      <C>
        LTI-AA          $        182,564,967.98                 (2)                      February 25, 2035
        LTI-IA1         $            348,645.00                 (2)                      February 25, 2035
        LTI-IA2         $             38,740.00                 (2)                      February 25, 2035
       LTI-IIA1         $            579,000.00                 (2)                      February 25, 2035
       LTI-IIA2         $            567,055.00                 (2)                      February 25, 2035
       LTI-IIA3         $            127,340.00                 (2)                      February 25, 2035
        LTI-M1          $        106,185.00                     (2)                      February 25, 2035
        LTI-M2          $             32,600.00                 (2)                      February 25, 2035
        LTI-M3          $             18,630.00                 (2)                      February 25, 2035
        LTI-M4          $             16,765.00                 (2)                      February 25, 2035
        LTI-M5          $             15,838.94                 (2)                      February 25, 2035
        LTI-ZZ          $          1,875,016.74                 (2)                      February 25, 2035
         LTI-P          $                100.00                 (2)                      February 25, 2035
       LTI-1SUB         $                942.96                 (2)                      February 25, 2035
       LTI-1GRP         $              8,690.67                 (2)                      February 25, 2035
       LTI-2SUB         $              3,099.59                 (2)                      February 25, 2035
       LTI-2GRP         $             28,567.49                 (2)                      February 25, 2035
        LTI-XX          $        186,249,482.95                 (2)                      February 25, 2035
</TABLE>
-------------------

(1)      For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each REMIC I
         Regular Interest.

(2)      Calculated in accordance with the definition of "Uncertificated REMIC I
         Pass-Through Rate" herein.




                                      -2-
<PAGE>



                                    REMIC II
                                    --------

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The R-II Interest will represent the sole class of
"residual interests" in REMIC II for purposes of the REMIC Provisions. The
following table irrevocably sets forth the Class designation, Pass-Through Rate
and Initial Certificate Principal Balance for each Class of Certificates and
uncertificated REMIC II Regular Interests that represents one or more of the
"regular interests" in REMIC II created hereunder:


<TABLE>
<CAPTION>
                        Initial Certificate                                                  Assumed Final
 Class Designation       Principal Balance                Pass-Through Rate              Distribution Date(1)
 -----------------       -----------------                -----------------              --------------------
<S>                  <C>                       <C>                                         <C>
Class I-A-1          $         69,729,000.00   Class I-A-1 Pass Through Rate               February 25, 2035
Class I-A-2          $          7,748,000.00   Class I-A-2 Pass Through Rate               February 25, 2035
Class II-A-1         $        115,800,000.00   Class II-A-1 Pass Through Rate              February 25, 2035
Class II-A-2         $        113,411,000.00   Class II-A-2 Pass Through Rate              February 25, 2035
Class II-A-3         $         25,468,000.00   Class II-A-3 Pass Through Rate              February 25, 2035
Class M-1            $         21,237,000.00   Class M-1 Pass Through Rate                 February 25, 2035
Class M-2            $          6,520,000.00   Class M-2 Pass-Through Rate                 February 25, 2035
Class M-3            $          3,726,000.00   Class M-3 Pass Through Rate                 February 25, 2035
Class M-4            $          3,353,000.00   Class M-4 Pass Through Rate                 February 25, 2035
Class M-5            $          3,167,787.00   Class M-5 Pass Through Rate                 February 25, 2035
Class X(2)           $          2,421,780.00   Class X Pass Through Rate                   February 25, 2035
Class P              $                100.00   N/A(3)                                      February 25, 2035
</TABLE>
-------------------
(1)      For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates.

(2)      The Class X Certificates will not accrue interest on their Certificate
         Principal Balance, but will accrue interest at the Class X Pass-Through
         Rate on the Certificate Notional Balance of the Class X Certificates
         outstanding from time to time which shall equal the aggregate of the
         Uncertificated Principal Balances of the REMIC I Regular Interests
         (other than REMIC I Regular Interest LTI-P).

 (3) The Class P Certificates will not be entitled to distributions of interest.


         In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, the Seller and the Trustee agree as follows:



                                      -3-
<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01 DEFINED TERMS

         In addition to those terms defined in Section 1.02, whenever used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:

         ACCOUNT:  Either the Distribution Account or the Custodial Account.

         ACCRUAL PERIOD: With respect to the Group I Certificates and the Class
X Certificates and any Distribution Date, the calendar month immediately
preceding such Distribution Date. With respect to the Group II Certificates and
Subordinate Certificates and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or with respect to the first Accrual
Period, the Closing Date) and ending on the day immediately preceding the
related Distribution Date. All calculations of interest on the Group I
Certificates and the Class X Certificates will be based on a 360-day year
consisting of twelve 30-day months. All calculations of interest on the Group II
Certificates and Subordinate Certificates will be made based on a 360-day year
and the actual number of days elapsed in the related Accrual Period.

         ADJUSTMENT DATE: With respect to each Mortgage Loan, the first day of
the month in which the Mortgage Rate of the Mortgage Loan changes pursuant to
the related Mortgage Note. The first Adjustment Date following the Cut-Off Date
as to each Mortgage Loan is set forth in the Loan Schedule.

         ADVANCE: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Servicer pursuant to
Section 5.01 or by the Trustee in its capacity as Successor Servicer pursuant to
Section 5.01.

         ADVANCE FACILITY: As defined in Section 5.01(b)(i).

         ADVANCE FACILITY NOTICE: As defined in Section 5.01(b)(ii).

         ADVANCE FINANCING PERSON: As defined in Section 5.01(b)(i).

         ADVANCE REIMBURSEMENT AMOUNT: As defined in Section 5.01(b)(ii).

         AGGREGATE LOAN BALANCE: With respect to the Mortgage Loans and any
Distribution Date, the aggregate of the Stated Principal Balances of the
Mortgage Loans as of the last day of the related Due Period.

         AGGREGATE LOAN GROUP BALANCE: With respect to a Loan Group and any
Distribution Date, the aggregate of the Stated Principal Balances of the
Mortgage Loans in such Loan Group as of the last day of the related Due Period.



                                      -4-
<PAGE>

         AGREEMENT: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.

         AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution Date, the
aggregate amount held in the Custodial Account at the close of business on the
immediately preceding Determination Date on account of (i) all Scheduled
Payments or portions thereof received in respect of the Mortgage Loans due after
the related Due Period and (ii) Principal Prepayments and Liquidation Proceeds
received in respect of the Mortgage Loans after the last day of the related
Prepayment Period.

         APPLIED LOSS AMOUNT: With respect to the Publicly Offered Certificates
and any Distribution Date, the excess of the aggregate Certificate Principal
Balance of the Publicly Offered Certificates over the Aggregate Loan Balance of
the Mortgage Loans after giving effect to all Realized Losses incurred with
respect to the Mortgage Loans during the related Due Period and payments of
principal to the Publicly Offered Certificates on such Distribution Date.

         APPRAISED VALUE: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.

         ASSUMED FINAL DISTRIBUTION DATE: The Distribution Date in February
2035.

         AUTHORIZED SERVICER REPRESENTATIVE: Those Servicer representatives,
authorized to execute a Request for Release on behalf of the Servicer, whose
name and facsimile signature appear on a list furnished to the Trustee by the
Servicer on the Closing Date pursuant to this Agreement, as such list may be
amended by the Servicer from time-to-time.

         BANKRUPTCY CODE: Title 11 of the United States Code.

         BASIS RISK SHORTFALL RESERVE FUND: The segregated non-interest bearing
trust account created and maintained by the Trustee pursuant to Section 5.13
hereof.

         BASIS RISK SHORTFALL: With respect to any Class of Group II
Certificates or Subordinate Certificates and any Distribution Date, the sum of
(i) the excess, if any, of the related Current Interest (calculated without
regard to the Net Funds Cap) over the related Current Interest for the
applicable Distribution Date; (ii) any amount described in clause (i) remaining
unpaid from prior Distribution Dates; and (iii) interest on the amount in clause
(ii) for the related Accrual Period calculated without regard to the Net Funds
Cap.

         BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 6.06). As of the Closing
Date, each Class of Publicly Offered Certificates constitutes a Class of
Book-Entry Certificates.



                                      -5-
<PAGE>

         BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in The City of New York, New York, the
Commonwealth of Pennsylvania, the city in which the Corporate Trust Office of
the Trustee is located or the States in which the Servicer's servicing
operations are located are authorized or obligated by law or executive order to
be closed.

         CAP CONTRACT: Shall mean the cap contract between the Trustee and the
counterparty named thereunder, for the benefit of the Holders of the Class
II-A-2 Certificates.

         CAP RATE: With respect to the Group II Certificates and Subordinate
Certificates, 11.00%.

         CARRYFORWARD INTEREST: With respect to any Class of Publicly Offered
Certificates and any Distribution Date, the sum of (i) the amount, if any, by
which (x) the sum of (A) Current Interest for that Class of Certificates for the
immediately preceding Distribution Date and (B) any unpaid Carryforward Interest
for such Class from previous Distribution Dates exceeds (y) the actual amount
distributed on such Class in respect of interest on the immediately preceding
Distribution Date and (ii) interest on such amount for the related Accrual
Period at the applicable Pass-Through Rate.

         CERTIFICATE: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-5.

         CERTIFICATE MARGIN: With respect to each Distribution Date on or prior
to the first possible Optional Termination Date, 0.28%, 0.26%, 0.35%, 0.57%,
0.75%, 0.80%, 1.25% and 1.90%, for the Class II-A-1, Class II-A-2, Class II-A-3,
Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates,
respectively. With respect to each Distribution Date following the first
possible Optional Termination Date, 0.56%, 0.52%, 0.70%, 1.07%, 1.25%, 1.30%,
1.75% and 2.40%, for the Class II-A-1, Class II-A-2, Class II-A-3, Class M-1,
Class M-2, Class M-3, Class M-4 and Class M-5 Certificates, respectively.

         CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.

         CERTIFICATE PRINCIPAL BALANCE: As to any Publicly Offered Certificate
or Class P Certificate and as of any Distribution Date, the Initial Certificate
Principal Balance of such Certificate less the sum of (i) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates, (ii) with respect to
any Class I-A-2 Certificate, Class II-A-3 Certificate or any Class of
Subordinate Certificates, any reductions in the Certificate Principal Balance of
such Certificate deemed to have occurred in connection with the allocations of
Realized Losses, if any and (iii) with respect to the Class I-A-2 Certificates,
Class II-A-3 Certificates or Subordinate Certificates, Subsequent Recoveries
added to the Certificate Principal Balance of any such Certificate pursuant to
Section 5.07(d), in each case up to the amount of Applied Loss Amounts but only
to the extent that any such Applied Loss Amount has not been paid to any Class
of Certificates as a Deferred Amount. As in any Class X Certificate and any date
of determination, the excess, if any, of (i) the Aggregate Loan Balance over
(ii) the then aggregate Certificate Principal Balance of the Publicly Offered
Certificates. References herein to the Certificate Principal Balance of a Class
of Certificates shall mean the Certificate Principal Balances of all
Certificates in such Class.



                                      -6-
<PAGE>

         CERTIFICATE REGISTER: The register maintained pursuant to Section 6.02.

         CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).

         CLASS: All Certificates bearing the same Class designation as set forth
in Section 6.01.

         CLASS I-A-1 CERTIFICATE: Any Certificate designated as a "Class I-A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A-1 Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.

         CLASS I-A-1 PASS-THROUGH RATE: With respect to each Distribution Date,
a per annum rate equal to the weighted average Net Mortgage Rate of the Group I
Mortgage Loans minus 0.53% per annum.

         CLASS I-A-2 CERTIFICATE: Any Certificate designated as a "Class I-A-2
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A-2 Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.

         CLASS I-A-2 PASS-THROUGH RATE: With respect to each Distribution Date,
a per annum rate equal to the weighted average Net Mortgage Rate of the Group I
Mortgage Loans minus 0.30% per annum.

         CLASS II-A-1 CERTIFICATE: Any Certificate designated as a "Class II-A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class II-A-1 Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.

         CLASS II-A-1 PASS-THROUGH RATE: With respect to each Distribution Date,
a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, 0.28% or (B) after the first possible Optional Termination
Date, 0.56%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate
and (iv) the applicable Cap Rate.

         CLASS II-A-2 CERTIFICATE: Any Certificate designated as a "Class II-A-2
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class II-A-2 Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.

         CLASS II-A-2 PASS-THROUGH RATE: With respect to each Distribution Date,
a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, 0.26% or (B) after the first possible Optional Termination
Date, 0.52%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate
and (iv) the applicable Cap Rate.



                                      -7-
<PAGE>

         CLASS II-A-3 CERTIFICATE: Any Certificate designated as a "Class II-A-3
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class II-A-3 Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.

         CLASS II-A-3 PASS-THROUGH RATE: With respect to each Distribution Date,
a per annum rate equal to the least of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, 0.35% or (B) after the first possible Optional Termination
Date, 0.70%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate
and (iv) the applicable Cap Rate.

         CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-1 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-1 PASS-THROUGH RATE: With respect to each Distribution Date, a
per annum rate equal to the least of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, 0.57% or (B) after the first possible Optional Termination
Date, 1.07%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate
and (iv) the applicable Cap Rate.

         CLASS M-1 PRINCIPAL PAYMENT AMOUNT: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior Certificates, in
each case, after giving effect to payments on such Distribution Date and (ii)
the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i)
approximately 89.70% and (ii) the Aggregate Loan Balance for such Distribution
Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for
such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of
the Cut-off Date.

         CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-2 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-2 PASS-THROUGH RATE: With respect to each Distribution Date, a
per annum rate equal to the least of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, 0.75% or (B) after the first possible Optional Termination
Date, 1.25%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate
and (iv) the applicable Cap Rate.

         CLASS M-2 PRINCIPAL PAYMENT AMOUNT: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior Certificates and
the Class M-1 Certificates, in each case, after giving effect to payments on
such Distribution Date and (ii) the Certificate Principal Balance of the


                                      -8-
<PAGE>

Class M-2 Certificates immediately prior to such Distribution Date exceeds (y)
the lesser of (A) the product of (i) approximately 93.20% and (ii) the Aggregate
Loan Balance for such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date.

         CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-3 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-3 PASS-THROUGH RATE: With respect to each Distribution Date, a
per annum rate equal to the least of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, 0.80% or (B) after the first possible Optional Termination
Date, 1.30%, (ii) the applicable Net Funds Cap, (iii) the Maximum Interest Rate
and (iv) the applicable Cap Rate.

         CLASS M-3 PRINCIPAL PAYMENT AMOUNT: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class M-1 and
Class M-2 Certificates, in each case, after giving effect to payments on such
Distribution Date and (ii) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to such Distribution Date exceeds (y) the lesser
of (A) the product of (i) approximately 95.20% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date.

         CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-4 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-4 PASS-THROUGH RATE: With respect to each Distribution Date
thereafter, a per annum rate equal to the least of (i) the sum of One-Month
LIBOR for that Distribution Date plus (A) on or prior to the first possible
Optional Termination Date, 1.25% or (B) after the first possible Optional
Termination Date, 1.75%, (ii) the applicable Net Funds Cap, (iii) the Maximum
Interest Rate and (iv) the applicable Cap Rate.

         CLASS M-4 PRINCIPAL PAYMENT AMOUNT: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class M-1,
Class M-2 and Class M-3 Certificates, in each case, after giving effect to
payments on such Distribution Date and (ii) the Certificate Principal Balance of
the Class M-4 Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (A) the product of (i) approximately 97.00% and (ii) the
Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by
which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii)
0.50% of the Aggregate Loan Balance as of the Cut-off Date.



                                      -9-
<PAGE>

         CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-5 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-5 PASS-THROUGH RATE: With respect to each Distribution Date
thereafter, a per annum rate equal to the least of (i) the sum of One-Month
LIBOR for that Distribution Date plus (A) on or prior to the first possible
Optional Termination Date, 1.90% or (B) after the first possible Optional
Termination Date, 2.40%, (ii) the applicable Net Funds Cap, (iii) the Maximum
Interest Rate and (iv) the applicable Cap Rate.

         CLASS M-5 PRINCIPAL PAYMENT AMOUNT: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class M-1,
Class M-2, Class M-3 and Class M-4 Certificates, in each case, after giving
effect to payments on such Distribution Date and (ii) the Certificate Principal
Balance of the Class M-5 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) approximately 98.70% and
(ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount,
if any, by which (i) the Aggregate Loan Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

         CLASS P CERTIFICATE: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class P Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS P CERTIFICATE ACCOUNT: The Eligible Account established and
maintained by the Trustee pursuant to Section 5.12(a).

         CLASS R CERTIFICATE: Any Certificate designated as a "Class R"
Certificate on the face thereof in the form of Exhibit A-5 hereto, representing
the right to its Percentage Interest of distributions provided for the Class R
Certificates as set forth herein and evidencing the Class R-I Interest and Class
R-II Interest.

         CLASS R-I INTEREST:  The uncertificated Residual Interest in REMIC I.

         CLASS R-II INTEREST:  The uncertificated Residual Interest in REMIC II.

         CLASS X CERTIFICATE: Any Certificate designated as a "Class X
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class X Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS X DISTRIBUTION AMOUNT: With respect to any Distribution Date and
the Class X Certificates, the sum of (i) the Excess Cap Payment, (ii) the
Current Interest and Carryforward Interest and (iii) any Overcollateralization
Release Amount for such Distribution Date remaining after payments pursuant to
items 1 though 13 of clause 5.06(iii); provided, however that on and


                                      -10-
<PAGE>

after the Distribution Date on which the Certificate Principal Balance of the
Publicly Offered Certificates has been reduced to zero, the Class X Distribution
Amount shall include the Overcollateralization Amount.

         CLASS X PASS-THROUGH RATE: On any Distribution Date, a per annum rate
equal to the percentage equivalent of a fraction, the numerator of which is the
sum of the amounts calculated pursuant to clauses (A) through (L) below, and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC I
Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular
Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest
LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC
I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and REMIC I Regular
Interest LTI-ZZ. For purposes of calculating the Pass-Through Rate for the Class
X Certificates, the numerator is equal to the sum of the following components:

                  (A) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTII-AA minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTII-AA;

                  (B) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-IA1 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-IA1;

                  (C) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-IA2 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-IA2;

                  (D) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-IIA1 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-IIA1;

                  (E) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-IIA2 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-IIA2;

                  (F) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-IIA3 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-IIA3;

                  (G) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-M1 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-M1;

                  (H) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-M2 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-M2;



                                      -11-
<PAGE>

                  (I) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-M3 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-M3;

                  (J) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-M4 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-M4;

                  (K) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-M5 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-M5; and

                  (L) the Uncertificated REMIC I Pass-Through Rate for REMIC I
         Regular Interest LTI-ZZ minus the Marker Rate, applied to an amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-ZZ.

         CLEANUP CALL:  As defined in Section 10.01.

         CLOSING DATE:  February 28, 2005.

         CODE: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.

         COMPENSATING INTEREST: An amount to be deposited in the Distribution
Account by the Servicer to offset a Prepayment Interest Shortfall on a Mortgage
Loan subject to this Agreement; provided, however that the amount of
Compensating Interest required to be paid in respect of any Mortgage Loan shall
not exceed the Servicing Fee payable to the Servicer.

         CORPORATE TRUST OFFICE: The designated office of the Trustee where at
any particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at 4 New York Plaza, 6th Floor, New York, New York 10004,
Attention: Institutional Trust Services/Global Debt, Nomura Asset Acceptance
Corporation, Alternative Loan Trust, Series 2005-AR1, or at such other address
as the Trustee may designate from time to time.

         CORRESPONDING CERTIFICATE: WITH RESPECT TO:

                  (i) REMIC I Regular Interest LTI-IA1, the Class I-A-1
         Certificates;
                  (ii) REMIC I Regular Interest LTI-IA2, the Class I-A-2
         Certificates;
                  (iii) REMIC I Regular Interest LTI-IIA1, the Class II-A-1
         Certificates;
                  (iv) REMIC I Regular Interest LTI-IIA2, the Class II-A-2
         Certificates;
                  (v) REMIC I Regular Interest LTI-IIA3, the Class II-A-3
         Certificates;
                  (vi) REMIC I Regular Interest LTI-M1, the Class M-1
         Certificates;
                  (vii) REMIC I Regular Interest LTI-M2, the Class M-2
         Certificates;
                  (viii) REMIC I Regular Interest LTI-M3, the Class M-3
         Certificates;
                  (ix) REMIC I Regular Interest LTI-M4, the Class M-4
         Certificates;
                  (x) REMIC I Regular Interest LTI-M5, the Class M-5
         Certificates; and
                  (xi) REMIC I Regular Interest LTI-P, the Class P Certificates.


                                      -12-
<PAGE>

         CREDIT RISK MANAGEMENT AGREEMENT: The agreement between the Credit Risk
Manager and the Servicer, dated as of February 28, 2005.

         CREDIT RISK MANAGEMENT FEE: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Credit Risk Management Fee
Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the
last day of the related Due Period. The Credit Risk Management Fee shall be
payable to the Credit Risk Manager and/or the Seller pursuant to Section
4.07(a)(vii) and 4.08(b).

         CREDIT RISK MANAGEMENT FEE RATE: 0.015% per annum.

         CREDIT RISK MANAGER:  The Murrayhill Company, a Colorado corporation.

         CURRENT INTEREST: With respect to any Class of Publicly Offered
Certificates and any Distribution Date, the amount of interest accruing at the
applicable Pass-Through Rate on the related Certificate Principal Balance during
the related Accrual Period; provided, that as to each Class of Publicly Offered
Certificates, the Current Interest will be reduced by a pro rata portion of any
Net Interest Shortfalls to the extent not covered by excess interest. No Current
Interest will be payable with respect to any Class of Publicly Offered
Certificates after the Distribution Date on which the outstanding Certificate
Principal Balance of such Certificate has been reduced to zero.

         CUSTODIAL ACCOUNT: The account established and maintained by the
Servicer with respect to receipts on the Mortgage Loans and related REO
Properties in accordance with Section 4.01.

         CUSTODIAN: JPMorgan Chase Bank, N.A., a national banking association.

         CUT-OFF DATE:  February 1, 2005.

         CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.

         DEBT SERVICE REDUCTION: Means a reduction in the amount of the monthly
payment due on a Mortgage Loan as established by a bankruptcy court in a
bankruptcy of the related Mortgagor, except a reduction constituting a Deficient
Valuation or any reduction that results in permanent forgiveness of principal.

         DEFERRED AMOUNT: With respect to the Class I-A-2 Certificates, Class
II-A-3 Certificates or any Class of Subordinate Certificates and any
Distribution Date, the amount by which (x) the aggregate of the Applied Loss
Amounts previously applied in reduction of the Certificate Principal Balance
thereof exceeds (y) the aggregate of amounts previously paid in reimbursement
thereof and the amount by which the Certificate Principal Balance of any such
Class has been increased due to the collection of Subsequent Recoveries.



                                      -13-
<PAGE>

         DEFICIENT VALUATION: Means the difference between the Stated Principal
Balance of a Mortgage Loan and a reduced secured debt as a result of a
bankruptcy court establishing the value of the Mortgaged Property at an amount
less than the then Stated Principal Balance of the Mortgage Loan in connection
with a bankruptcy of the related Mortgagor.

         DEFINITIVE CERTIFICATES: As defined in Section 6.06.

         DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.

         DELINQUENCY RATE: With respect to the Mortgage Loans and any calendar
month will be, generally, the fraction, expressed as a percentage, the numerator
of which is the Aggregate Loan Balance of all Mortgage Loans sixty (60) or more
days delinquent (including all Mortgage Loans in bankruptcy or foreclosure and
all REO Properties) as of the close of business on the last day of such month,
and the denominator of which is the Aggregate Loan Balance as of the close of
business on the last day of such month.

         DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.

         DENOMINATION: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Principal Balance of this
Certificate".

         DEPOSITOR: Nomura Asset Acceptance Corporation, a Delaware corporation,
or its successor in interest.

         DEPOSITORY: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.

         DEPOSITORY AGREEMENT: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
I.

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



                                      -14-
<PAGE>

         DETERMINATION DATE: With respect to any Distribution Date, the 15th day
of the month of such Distribution Date or, if such 15th day is not a Business
Day, the immediately preceding Business Day.

         DISTRIBUTION ACCOUNT: Each trust account or accounts related to the
Mortgage Loans created and maintained by the Trustee pursuant to Section 4.06 in
the name of the Trustee for the benefit of the Certificateholders and designated
"JPMorgan Chase Bank, N.A., in trust for registered holders of Nomura Asset
Acceptance Corporation, Mortgage Pass-Through Certificates, Series 2005-AR1".
Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement. The
Distribution Account shall be an Eligible Account.

         DISTRIBUTION DATE: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in March 2005.

         DUE DATE: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.

         DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the calendar month preceding the calendar month in which such
Distribution Date occurs through close of business on the first day of the
calendar month in which such Distribution Date occurs.

         ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which are rated by each Rating Agency in one of its two highest long-term and
its highest short-term rating categories respectively, at the time any amounts
are held on deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC (to
the limits established by the FDIC) and the uninsured deposits in which accounts
are otherwise secured such that, as evidenced by an Opinion of Counsel delivered
to the Trustee and to each Rating Agency, the Certificateholders have a claim
with respect to the funds in such account or a perfected first priority 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 or trust company in which
such account is maintained, or (iii) a segregated, non-interest bearing trust
account or accounts maintained with the corporate trust department of a federal
or state chartered depository institution or trust company having capital and
surplus of not less than $50,000,000, acting in its fiduciary capacity or (iv)
any other account acceptable to the Rating Agencies as evidenced in writing by
the Rating Agencies. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the Trustee.

         ESCROW ACCOUNT: Shall mean the accounts maintained by the Servicer
pursuant to Section 4.04. Each Escrow Account shall be an Eligible Account.

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

         ERISA RESTRICTED CERTIFICATE: Each of the Class X, Class P and Residual
Certificates.



                                      -15-
<PAGE>

         EXCESS CAP PAYMENT: With respect to any Distribution Date, the excess,
if any, of (1) the cap payments made by the counterparty under the Cap Contract,
over (2) the amount of the Basis Risk Shortfalls attributable to the Class
II-A-2 Certificates for such Distribution Date.

         EXCESS LIQUIDATION PROCEEDS: To the extent not required by law to be
paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal Balance of such
Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has been
liquidated.

         EXEMPTION: Prohibited Transaction Exemption 93-32, as amended from time
to time.

         FANNIE MAE: Fannie Mae (formerly, Federal National Mortgage
Association), or any successor thereto.

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

         FINAL CERTIFICATION: The certification of the Custodian in the form
attached hereto as Exhibit C-3.

         FINAL RECOVERY DETERMINATION: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller or the Class X Certificateholder pursuant to or as contemplated by
Section 2.03(c) or Section 10.01), a determination made by the Servicer pursuant
to this Agreement that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Trustee shall maintain records, based solely on information
provided by the Servicer, of each Final Recovery Determination made thereby.

         FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended.

         FREDDIE MAC: Federal Home Loan Mortgage Corporation, or any successor
thereto.

         GROSS MARGIN: With respect to each Mortgage Loan, the fixed percentage
set forth in the related Mortgage Note that is added to the Index on each
Adjustment Date in accordance with the terms of the related Mortgage Note used
to determine the Mortgage Rate for such Mortgage Loan.

         GROUP I CERTIFICATES: The Class I-A-1 Certificates and Class I-A-2
Certificates.



                                      -16-
<PAGE>

         GROUP I ALLOCATION AMOUNT: With respect to any Distribution Date, the
product of the Senior Principal Payment Amount for that distribution date and a
fraction the numerator of which is the Principal Remittance Amount derived from
the Group I Mortgage Loans and the denominator of which is the Principal
Remittance Amount, in each case for that Distribution Date.

         GROUP I EXCESS INTEREST AMOUNT: With respect to any Distribution Date,
the product of the Monthly Excess Interest required to be distributed on that
Distribution Date pursuant to Section 5.06(iii)(1)(A) and a fraction the
numerator of which is the Principal Remittance Amount derived from the Group I
Mortgage Loans and the denominator of which is Principal Remittance Amount, in
each case for that Distribution Date.

         GROUP I MORTGAGE LOANS: Those Mortgage Loans identified on the Mortgage
Loan Schedule as Group I Mortgage Loans.

         GROUP II CERTIFICATES: The Class II-A-1, Class II-A-2 and Class II-A-3
Certificates.

         GROUP II ALLOCATION AMOUNT: With respect to any Distribution Date, the
product of the Senior Principal Payment Amount for that distribution date and a
fraction the numerator of which is the Principal Remittance Amount derived from
the Group II Mortgage Loans and the denominator of which is the Principal
Remittance Amount, in each case for that Distribution Date.

         GROUP II EXCESS INTEREST AMOUNT: With respect to any Distribution Date,
the product of the Monthly Excess Interest required to be distributed on that
Distribution Date pursuant to Section 5.06(iii)(1)(A) and a fraction the
numerator of which is the Principal Remittance Amount derived from the Group II
Mortgage Loans and the denominator of which is Principal Remittance Amount, in
each case for that Distribution Date.

         GROUP II MORTGAGE LOANS: Those Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.

         INDEMNIFIED PERSONS: The Trustee, the Servicer (including any successor
to the Servicer), the Custodian, the Trust Fund and their officers, directors,
agents and employees and, with respect to the Trustee, any separate co-trustee
and its officers, directors, agents and employees.

         INDEX: As of any Adjustment Date, the index applicable to the
determination of the Mortgage Rate on each Mortgage Loan which will generally be
based on Six-Month LIBOR, One-Year LIBOR or One-Year CMT.

         INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.

         INITIAL CERTIFICATION: The certification of the Custodian in the form
attached hereto as Exhibit C-1.

         INSURANCE POLICY: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect with respect to such Mortgage Loan, including any replacement policy
or policies for any Insurance Policies.

         INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Servicer or the trustee under the deed of trust and are not
applied to the restoration of the related Mortgaged Property or released



                                      -17-
<PAGE>

to the Mortgagor in accordance with the servicing standard set forth in Section
3.01 other than any amount included in such Insurance Proceeds in respect of
Insured Expenses.

         INSURED EXPENSES: Expenses covered by any Insurance Policy with respect
to the Mortgage Loans.

         INTEREST DETERMINATION DATE: Shall mean the second LIBOR Business Day
preceding the commencement of each Accrual Period.

         INTEREST REMITTANCE AMOUNT: With respect to any Distribution Date, (i)
the sum, without duplication, of (a) all scheduled interest during the related
Due Period with respect to the Mortgage Loans less the Servicing Fee and the fee
payable to any provider of lender-paid mortgage insurance, if any, (b) all
Advances relating to interest with respect to the Mortgage Loans made on or
prior to the related Remittance Date, (c) all Compensating Interest with respect
to the Mortgage Loans and required to be remitted by the Servicer pursuant to
this Agreement with respect to such Distribution Date, (d) Liquidation Proceeds
and Subsequent Recoveries with respect to the Mortgage Loans collected during
the related Prepayment Period (to the extent such Liquidation Proceeds and
Subsequent Recoveries relate to interest), (e) all amounts relating to interest
with respect to each Mortgage Loan repurchased by the Seller pursuant to
Sections 2.02 and 2.03 and (f) all amounts in respect of interest paid by the
Class X Certificateholder pursuant to Section 10.01 to the extent remitted by
the Servicer to the Distribution Account pursuant to this Agreement, minus (ii)
all amounts relating to interest required to be reimbursed pursuant to Sections
4.02, 4.04, 4.06, 4.07 and 9.05 or as otherwise set forth in this Agreement.

         INTEREST SHORTFALL: With respect to any Distribution Date, the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rates) on Mortgage Loans resulting from (a) Principal Prepayments
in full received during the related Prepayment Period, (b) partial Principal
Prepayments received during the related Prepayment Period to the extent applied
prior to the Due Date in the month of the Distribution Date and (c) interest
payments on certain of the Mortgage Loans being limited pursuant to the
provisions of the Relief Act.

         INTERIM CERTIFICATION: The certification of the Custodian in the form
attached hereto as Exhibit C-2.

         LATEST POSSIBLE MATURITY DATE: The Distribution Date following the
final scheduled maturity date of the Mortgage Loan in the Trust Fund having the
latest scheduled maturity date as of the Cut-off Date. For purposes of the
Treasury Regulations under Code section 860A through 860G, the latest possible
maturity date of each regular interest issued by REMIC I and REMIC II shall be
the Latest Possible Maturity Date.

         LIBOR BUSINESS DAY: Shall mean a day on which banks are open for
dealing in foreign currency and exchange in London.

         LIBOR DETERMINATION DATE: The second LIBOR Business Day before the
first day of the related Accrual Period.



                                      -18-
<PAGE>

         LIQUIDATED LOAN: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Servicer has certified in the related Prepayment
Period that it has received all amounts it expects to receive in connection with
such liquidation.

         LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds, received
in connection with the partial or complete liquidation of a Mortgage Loan,
whether through trustee's sale, foreclosure sale or otherwise, or in connection
with any condemnation or partial release of a Mortgaged Property and any other
proceeds received with respect to an REO Property, less the sum of related
unreimbursed Advances, Servicing Fees and Servicing Advances and all expenses of
liquidation, including property protection expenses and foreclosure and sale
costs, including court and reasonable attorneys fees.

         LOAN GROUP: Any of Loan Group I or Loan Group II. "Loan Group I" refers
to the Group I Mortgage Loans and "Loan Group II" refers to the Group II
Mortgage Loans.

         LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the Mortgage Loan and
the denominator of which is the Appraised Value of the related Mortgaged
Property.

         MAJORITY CLASS X CERTIFICATEHOLDER: The Holder of a 50.01% or greater
Percentage Interest in the Class X Certificates.

         MARKER RATE: With respect to the Offered Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC I Pass-Through Rates for REMIC I Regular Interest
LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1,
REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I
Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular
Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular Interest
LTI-M5 and REMIC I Regular Interest LTI-ZZ, with the per annum rate on REMIC I
Regular Interest LTI-IA1 subject to a cap equal to the excess of (i) the
weighted average Net Mortgage Rate of the Group I Mortgage Loans over (ii) 0.53%
for the purpose of this calculation; with the per annum rate on REMIC I Regular
Interest LTI-IA2 subject to a cap equal to the excess of (i) the weighted
average Net Mortgage Rate of the Group I Mortgage Loans over (ii) 0.30% for the
purpose of this calculation; with the per annum rate on REMIC I Regular Interest
LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3,
REMIC I Regular Interest LTI-MI, REMIC I Regular Interest LTI-M2, REMIC I
Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4 and REMIC I Regular
Interest LTI-M5 subject to a cap equal to the least of (w) One-Month LIBOR plus
the Certificate Margin for the Corresponding Certificate, (x) the applicable Net
Funds Cap for the Corresponding Certificate, (y) the Maximum Interest Rate for
the Corresponding Certificate and (z) the applicable Cap Rate for the
Corresponding Certificate for the purpose of this calculation; and with the per
annum rate on REMIC I Regular Interest LTI-ZZ subject to a cap of zero for the
purpose of this calculation; provided, however, that for this purpose, the
calculation of the Uncertificated REMIC I Pass-Through Rate and the related cap
with respect to each such REMIC I Regular Interest (other than



                                      -19-
<PAGE>

REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2 and REMIC I
Regular Interest LTI-ZZ) shall be multiplied by a fraction, the numerator of
which is the actual number of days in the Accrual Period and the denominator of
which is 30.

         MAXIMUM INTEREST RATE: With respect to any Distribution Date and the
related Accrual Period and the Group II Certificates, an annual rate equal to
the weighted average of the Maximum Mortgage Interest Rates of the Mortgage
Loans in Loan Group II minus the weighted average expense rate of the Mortgage
Loans in Loan Group II. With respect to any Distribution Date and the
Subordinate Certificates, an annual rate equal to the weighted average of the
Maximum Mortgage Interest Rates of the Mortgage Loans minus the weighted average
expense fee rate of the Mortgage Loans.

         MAXIMUM MORTGAGE INTEREST RATE: With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the maximum Mortgage Rate
thereunder.

         MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

         MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.

         MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.

         MINIMUM MORTGAGE INTEREST RATE: With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the minimum Mortgage Rate
thereunder.

         MOM LOAN: Any Mortgage Loan as to which MERS is acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.

         MONTHLY EXCESS CASHFLOW: With respect to any Distribution Date, means
the sum of (a) the Monthly Excess Interest, (b) the Overcollateralization
Release Amount, if any, for such Distribution Date, and (c) the Principal
Remittance Amount remaining following payments of the Principal Payment Amount
to the Senior Certificates and Subordinate Certificates.

         MONTHLY EXCESS INTEREST: With respect to any Distribution Date, the
excess of (x) the Interest Remittance Amount for such Distribution Date over (y)
the sum of Current Interest and Carryforward Interest on the Senior Certificates
and Subordinate Certificates for such Distribution Date.

         MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 5.09.

         MOODY'S: Moody's Investors Service, Inc. or its successor in interest.

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



                                      -20-
<PAGE>

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

         MORTGAGE LOANS: Such of the Mortgage Loans transferred and assigned to
the Trustee pursuant to the provisions hereof, as from time to time are held as
a part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property.

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of February 28, 2005, between the Seller, as seller and the Depositor,
as purchaser.

         MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Servicer to reflect the deletion of Deleted Mortgage Loans
and the addition of Replacement Mortgage Loans pursuant to the provisions of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, the initial Mortgage Loan Schedule being
attached hereto as Exhibit B, setting forth the following information with
respect to each Mortgage Loan:

                  (i)      the loan number;

                  (ii)     the Mortgage Rate in effect as of the Cut-off Date;

                  (iii)    the Servicing Fee Rate;

                  (iv)     the Net Mortgage Rate in effect as of the Cut-off
                           Date;

                  (v)      the maturity date;

                  (vi)     the original principal balance;

                  (vii)    the Cut-off Date Principal Balance;

                  (viii)   the original term;

                  (ix)     the remaining term;

                  (x)      the property type;

                  (xi)     with respect to each MOM Loan, the related MIN;

                  (xii)    the Servicer;

                  (xiii)   a code indicating whether the Mortgage Loan is
                           subject to a Prepayment Charge, the term of such
                           Prepayment Charge and the amount of such Prepayment
                           Charge;

                  (xiv)    the first Adjustment Date;



                                      -21-
<PAGE>

                  (xv)     the Gross Margin;

                  (xvi)    the Maximum Mortgage Interest Rate under the terms of
                           the Mortgage Note;

                  (xvii)   the Minimum Mortgage Interest Rate under the terms of
                           the Mortgage Note;

                  (xviii)  the Periodic Rate Cap;

                  (xix)    the first Adjustment Date immediately following the
                           Cut-off Date;

                  (xx)     the Index; and

                  (xxi)    the related Loan Group.

Such schedule shall also set forth the aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans.

         MORTGAGE NOTE: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.

         MORTGAGE RATE: The annual rate of interest borne by a Mortgage Note
which rate (A) as of any date of determination until the first Adjustment Date
following the Cut-off Date shall be the rate set forth in the Loan Schedule as
the Mortgage Rate in effect immediately following the Cut-off Date and (B) as of
any date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date equal to the sum, rounded to the nearest 0.125% as
provided in the Mortgage Note, of the Index, as most recently available as of a
date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such Mortgage
Loan on any Adjustment Date shall never be more than the lesser of (i) the sum
of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage
Interest Rate, and shall never be less than the greater of (i) the Mortgage Rate
in effect immediately prior to the Adjustment Date less the Periodic Rate Cap,
if any, and (ii) the related Minimum Mortgage Interest Rate. With respect to
each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.

         MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan.

         MORTGAGOR: The obligors on a Mortgage Note.

         NET FUNDS CAP: With respect to any Distribution Date and the Group II
Certificates, (a) a fraction expressed as a percentage, the numerator of which
is the product of (1) the related Optimal Interest Remittance Amount and (2) 12,
and the denominator of which is the Aggregate Loan Group Balance for Loan Group
II for the immediately preceding Distribution Date, multiplied by (b) a
fraction, expressed as a percentage, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the immediately
preceding Accrual


                                      -22-
<PAGE>

Period. For federal income tax purposes, the equivalent of the foregoing shall
be expressed as the weighted average of the Uncertificated REMIC I Pass-Through
Rate on REMIC I Regular Interest LTI-2GRP, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interest. With respect
to any Distribution Date and the Subordinate Certificates, (a) a fraction
expressed as a percentage, the numerator of which is the product of (1) the
related Optimal Interest Remittance Amount and (2) 12, and the denominator of
which is the Aggregate Loan Group Balance of Loan Group I and Loan Group II for
the immediately preceding Distribution Date, weighted, in each case, on the
basis of the Aggregate Loan Group Balance of Loan Group I and Loan Group II for
the immediately preceding Distribution Date, less the Certificate Principal
Balance of the related Senior Certificates, multiplied by (b) a fraction,
expressed as a percentage, the numerator of which is 30 and the denominator of
which is the actual number of days elapsed in the immediately preceding Accrual
Period. For federal income tax purposes, the equivalent of the foregoing shall
be expressed as the weighted average of the Uncertificated REMIC I Pass-Through
Rates on REMIC I Regular Interest LTI-1SUB and REMIC I Regular Interest
LTI-2SUB, in each case subject to a cap and a floor equal to the weighted
average Net Mortgage Rate of the Group I Mortgage Loans and Group II Mortgage
Loans, respectively, weighted in each case on the basis of the Uncertificated
Principal Balance of each such REMIC I Regular Interest.

         NET INTEREST SHORTFALLS means Interest Shortfalls net of payments by
the Servicer in respect of Compensating Interest.

         NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the related Mortgage Rate less the sum of (i) the Servicing
Fee Rate and (ii) the rate at which the fee payable to any provider of
lender-paid mortgage insurance is calculated, if applicable.

         NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a Book-Entry
Certificate.

         NONRECOVERABLE ADVANCE: Any portion of an Advance or Servicing Advance
previously made or proposed to be made by the Servicer pursuant to this
Agreement or the Trustee as Successor Servicer, that, in the good faith judgment
of the Servicer or the Trustee as Successor Servicer, will not or, in the case
of a proposed Advance or Servicing Advance, would not, be ultimately recoverable
by it from the related Mortgagor, related Liquidation Proceeds, Insurance
Proceeds or otherwise.

         OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor or the
Trustee (or any other officer customarily performing functions similar to those
performed by any of the above designated officers and also to whom, with respect
to a particular matter, such matter is referred because of such officer's
knowledge of and familiarity with a particular subject) or (ii), if provided for
in this Agreement, signed by a Authorized Servicer Representative, as the case
may be, and delivered to the Depositor, the Seller and/or the Trustee, as the
case may be, as required by this Agreement.

         ONE-MONTH LIBOR: With respect to any Accrual Period (other than the
first Accrual Period), the rate determined by the Trustee on the related
Interest Determination Date on the



                                      -23-
<PAGE>

basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination 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 One-Month LIBOR or comparable rates
as may be reasonably selected by the Trustee), One-Month LIBOR for the
applicable Accrual Period will be the Reference Bank Rate. If no such quotations
can be obtained by the Trustee and no Reference Bank Rate is available,
One-Month LIBOR will be One-Month LIBOR applicable to the preceding Accrual
Period. The establishment of One-Month LIBOR on each Interest Determination Date
by the Trustee and the Trustee's calculation of the rate of interest applicable
to the Publicly Offered Certificates (other than the Group I Certificates) for
the related Accrual Period shall, in the absence of manifest error, be final and
binding. With respect to the first Accrual Period, One-Month LIBOR shall equal
2.67000% per annum.

         ONE-YEAR CMT: The per annum rate equal to the weekly average yield on
U.S. Treasury securities adjusted to a constant maturity of one year as reported
by the Federal Reserve Board in statistical Release No. H.15(519) as most
recently available as of the date forty-five days, thirty-five days or thirty
days prior to the adjustment date or on the adjustment date, as published in the
place specified in the related mortgage note and as made available as of the
date specified in the related mortgage note.

         ONE-YEAR LIBOR: The per annum rate equal to the average of interbank
offered rates for one-year U.S. dollar-denominated deposits in the London market
based on quotations of major banks as published in The Wall Street Journal and
most recently available as of the time specified in the related Mortgage Note

         OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Seller, the Depositor or the Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 2.05, 7.05 or
11.01, or the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of the Seller, Depositor and the
Servicer, (ii) not have any direct financial interest in the Seller, Depositor
or the Servicer or in any affiliate of either, and (iii) not be connected with
the Seller, Depositor or the Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.

         OPTIMAL INTEREST REMITTANCE AMOUNT: With respect to any Distribution
Date will be equal to the excess of (i) the product of (1) (x) the weighted
average Net Mortgage Rates of the Mortgage Loans as of the first day of the
related Due Period minus, with respect to Loan Group 1, the sum of (A) the
product of (x) 0.53% and (y) the Certificate Principal Balance of the Class
I-A-1 Certificates divided by the aggregate Certificate Principal Balance of the
Group I Certificates and (B) the product of (x) 0.30% and (y) the Certificate
Principal Balance of the Class I-A-2 Certificates divided by the aggregate
Certificate Principal Balance of the Group I Certificates, divided by (y) 12 and
(2) the Aggregate Loan Balance for the immediately preceding Distribution Date,
over (ii) any expenses that reduce the Interest Remittance Amount that did not
arise as a result of a default or delinquency of the Mortgage Loans or were not
taken into account in computing the expense fee rate.



                                      -24-
<PAGE>

         OPTIONAL TERMINATION: The termination of the Trust Fund as a result of
the purchase of all of the Mortgage Loans and any related REO Property pursuant
to the last paragraph of Section 10.01.

         OPTIONAL TERMINATION DATE: The first Distribution Date on which the
Class X Certificateholder (so long as it is not an affiliate of the Seller) may
purchase, at its option, the Mortgage Loans and related REO Properties as
described in Section 10.01.

         OTS: The Office of Thrift Supervision or any successor thereto.

         OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:

         (a) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and

         (b) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.

         OUTSTANDING MORTGAGE LOAN: As of any date of determination, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.

         OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date,
the excess, if any, of (a) the Aggregate Loan Balance for such Distribution Date
over (b) the aggregate Certificate Principal Balance of the Publicly Offered
Certificates on such Distribution Date (after taking into account the payment of
100% of the Principal Remittance Amount on such Distribution Date).

         OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any
Distribution Date, the amount, if any, by which (x) the Targeted
Overcollateralization Amount for such Distribution Date exceeds (y) the
Overcollateralization Amount for such Distribution Date, calculated for this
purpose after giving effect to the reduction on such Distribution Date of the
aggregate Certificate Principal Balance of the Publicly Offered Certificates
resulting from the payment of the Principal Remittance Amount on such
Distribution Date, but prior to allocation of any Applied Loss Amount on such
Distribution Date.

         OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the amount, if any, by which (1) the Overcollateralization Amount
for such date exceeds (2) the Targeted Overcollateralization Amount for such
Distribution Date.

         OWNERSHIP INTEREST: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.



                                      -25-
<PAGE>

         PASS-THROUGH RATE: The Class I-A-1, Class I-A-2, Class II-A-1, Class
II-A-2, Class II-A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class X Pass-Through Rate, as applicable.

         PAYAHEAD: Any Scheduled Payment intended by the related Mortgagor to be
applied in a Due Period subsequent to the Due Period in which such payment was
received.

         PERCENTAGE INTEREST: With respect to any Certificate of a specified
Class, the Percentage Interest set forth on the face thereof or the percentage
obtained by dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of such Class. With respect to any
Residual Certificate, the undivided percentage ownership in such Class evidenced
by such Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and integral multiples
of 5% in excess thereof.

         PERIODIC RATE CAP: With respect the Adjustment Date for an Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note, which is the
maximum amount by which the Mortgage Rate for such Mortgage Loan may increase or
decrease (without regard to the Maximum Mortgage Interest Rate or the Minimum
Mortgage Interest Rate) on such Adjustment Date from the Mortgage Rate in effect
immediately prior to such Adjustment Date.

         PERMITTED INVESTMENTS: At any time, any one or more of the following
obligations and securities:

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

                  (ii) general obligations of or obligations guaranteed by any
         state of the United States or the District of Columbia receiving the
         highest long-term debt rating of each Rating Agency, or such lower
         rating as will not result in the downgrading or withdrawal of the
         ratings then assigned to the Certificates by each Rating Agency, as
         evidenced by a signed writing delivered by each Rating Agency;

                  (iii) [Reserved];

                  (iv) commercial or finance company paper which is then
         receiving the highest commercial or finance company paper rating of
         each Rating Agency, or such lower rating as will not result in the
         downgrading or withdrawal of the ratings then assigned to the
         Certificates by each Rating Agency, as evidenced by a signed writing
         delivered by each Rating Agency;

                  (v) certificates of deposit, demand or time deposits, or
         bankers' acceptances issued by any depository institution or trust
         company incorporated under the laws of the United States or of any
         state thereof and subject to supervision and examination by federal
         and/or state banking authorities (including the Trustee in its
         commercial banking capacity), provided that the commercial paper and/or
         long term unsecured debt obligations of such depository institution or
         trust company are then rated one of the two highest long-term and the
         highest short-term ratings of each such Rating Agency for such



                                      -26-
<PAGE>

         securities, or such lower ratings as will not result in the downgrading
         or withdrawal of the rating then assigned to the Certificates by any
         Rating Agency, as evidenced by a signed writing delivered by each
         Rating Agency;

                  (vi) demand or time deposits or certificates of deposit issued
         by any bank or trust company or savings institution to the extent that
         such deposits are fully insured by the FDIC;

                  (vii) guaranteed reinvestment agreements issued by any bank,
         insurance company or other corporation containing, at the time of the
         issuance of such agreements, such terms and conditions as will not
         result in the downgrading or withdrawal of the rating then assigned to
         the Certificates by any such Rating Agency, as evidenced by a signed
         writing delivered by each Rating Agency;

                  (viii) repurchase obligations with respect to any security
         described in clauses (i) and (ii) above, in either case entered into
         with a depository institution or trust company (acting as principal)
         described in clause (v) above;

                  (ix) securities (other than stripped bonds, stripped coupons
         or instruments sold at a purchase price in excess of 115% of the face
         amount thereof) bearing interest or sold at a discount issued by any
         corporation incorporated under the laws of the United States or any
         state thereof which, at the time of such investment, have one of the
         two highest long term ratings of each Rating Agency, or such lower
         rating as will not result in the downgrading or withdrawal of the
         rating then assigned to the Certificates by any Rating Agency, as
         evidenced by a signed writing delivered by each Rating Agency;

                  (x) units of money market funds registered under the
         Investment Company Act of 1940 including funds managed or advised by
         the Trustee or an affiliate thereof having a rating by S&P of AAAm-G,
         AAA-m, or AA-m, and if rated by Moody's, rated Aaa, Aa1 or Aa2;

                  (xi) short term investment funds sponsored by any trust
         company or banking association incorporated under the laws of the
         United States or any state thereof (including any such fund managed or
         advised by the Trustee or any affiliate thereof) which on the date of
         acquisition has been rated by each Rating Agency in their respective
         highest applicable rating category or such lower rating as will not
         result in the downgrading or withdrawal of the ratings then assigned to
         the Certificates by each Rating Agency, as evidenced by a signed
         writing delivered by each Rating Agency; and

                  (xii) such other investments having a specified stated
         maturity and bearing interest or sold at a discount acceptable to each
         Rating Agency as will not result in the downgrading or withdrawal of
         the rating then assigned to the Certificates by any Rating Agency, as
         evidenced by a signed writing delivered by each Rating Agency, as
         evidenced by a signed writing delivered by each Rating Agency;

provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the


                                      -27-
<PAGE>

interest and principal payments with respect to such instrument provide a yield
to maturity at par greater than 120% of the yield to maturity at par of the
underlying obligations.

         PERMITTED TRANSFEREE: Any person other than (i) the United States, any
State or political subdivision thereof, any possession of the United States or
any agency or instrumentality of any of the foregoing, (ii) a foreign
government, International Organization or any agency or instrumentality of
either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in section 521 of the Code) that is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by section 511 of
the Code on unrelated business taxable income) on any excess inclusions (as
defined in section 860E(c)(1) of the Code) with respect to any Residual
Certificate, (iv) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or resident of the
United States, a corporation, partnership (other than a partnership that has any
direct or indirect foreign partners) or other entity (treated as a corporation
or a partnership for federal income tax purposes), created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia, an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trustor and (vi) any other Person based upon an Opinion of Counsel (which
shall not be an expense of the Trustee) that states that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may cause any REMIC
to fail to qualify as a REMIC at any time that any Certificates are Outstanding.
The terms "United States," "State" and "International Organization" shall have
the meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of Freddie Mac, a majority
of its board of directors is not selected by such government unit.

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

         PREPAYMENT ASSUMPTION: The assumed rate of prepayment, as described in
the Prospectus Supplement relating to each Class of Publicly Offered
Certificates.

         PREPAYMENT CHARGE: With respect to any Principal Prepayment, any
prepayment premium, penalty or charge payable by a Mortgagor in connection with
any Principal Prepayment on a Mortgage Loan pursuant to the terms of the related
Mortgage Note (other than any Servicer Prepayment Charge Payment Amount).



                                      -28-
<PAGE>

         PREPAYMENT CHARGE SCHEDULE: As of any date, the list of Mortgage Loans
providing for a Prepayment Charge included in the Trust Fund on such date,
attached hereto as Exhibit K (including the prepayment charge summary attached
thereto). The Depositor shall deliver or cause the delivery of the Prepayment
Charge Schedule to the Servicer and the Trustee on the Closing Date. The
Prepayment Charge Schedule shall set forth the following information with
respect to each Prepayment Charge:

                  (i)      the Mortgage Loan identifying number;

                  (ii)     a code indicating the type of Prepayment Charge;

                  (iii)    the date on which the first Monthly Payment was due
                           on the related Mortgage Loan;

                  (iv)     the term of the related Prepayment Charge;

                  (v)      the original Stated Principal Balance of the related
                           Mortgage Loan; and

                  (vi)     the Stated Principal Balance of the related Mortgage
                           Loan as of the Cut-off Date.

         PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the related Prepayment Period, (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
3.24 or 10.01 hereof), the amount, if any, by which (i) one month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan immediately prior to such prepayment exceeds (ii) the amount of
interest paid or collected in connection with such Principal Prepayment less the
sum of (a) the related Servicing Fee (b) the Credit Risk Management Fee Rate and
(c) the fee payable to any provider of lender-paid mortgage insurance, if any.

         PREPAYMENT PERIOD: With respect to any Distribution Date, the calendar
month immediately preceding the month in which such Distribution Date occurs.

         PRINCIPAL PAYMENT AMOUNT: With respect to each Distribution Date, the
Principal Remittance Amount for such date minus the Overcollateralization
Release Amount, if any, for such Distribution Date.

         PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 3.24 and 10.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any Due Date in any
month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Servicer in accordance with the terms of the
related Mortgage Note.

         PRINCIPAL REMITTANCE AMOUNT: With respect to any Distribution Date, (i)
the sum, without duplication, of (a) the principal portion of all Scheduled
Payments on the Mortgage Loans due


                                      -29-
<PAGE>

during the related Due Period whether or not received on or prior to the related
Determination Date, (b) the principal portion of all unscheduled collections
(other than Payaheads) including Insurance Proceeds, Condemnation Proceeds,
Subsequent Recoveries and all full and partial Principal Prepayments exclusive
of prepayment charges or penalties collected during the related Prepayment
Period, to the extent applied as recoveries of principal on the Mortgage Loans,
(c) the Stated Principal Balance of each Mortgage Loan that was repurchased by
the Seller during the related Prepayment Period pursuant to Sections 2.02, 2.03
and 3.24, (d) the aggregate of all Substitution Adjustment Amounts received
during the related Prepayment Period for the related Determination Date in
connection with the substitution of Mortgage Loans pursuant to Section 2.03(b),
(e) amounts in respect of principal on the Mortgage Loans paid by the Class X
Certificateholder pursuant to Section 10.01, (f) all Liquidation Proceeds and
Subsequent Recoveries with respect to the Mortgage Loans collected during the
related Prepayment Period (to the extent such Liquidation Proceeds and
Subsequent Recoveries relate to principal), in each case to the extent remitted
by the Servicer to the Distribution Account pursuant to this Agreement and (g)
the principal portion of Payaheads previously received of the Mortgage Loans and
intended for application in the related Due Period minus (ii) all amounts
required to be reimbursed pursuant to Sections 4.02, 4.05, 4.07, 5.10 and 9.05
or as otherwise set forth in this Agreement.

         PRIVATE CERTIFICATE: Each of the Class X, Class P and Class R
Certificates.

         PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated February 24,
2005 relating to the offering of the Publicly Offered Certificates.

         PUBLICLY OFFERED CERTIFICATES: Any Certificates other than the Private
Certificates.

         PUD: A planned unit development.

         PURCHASE PRICE: With respect to any Mortgage Loan required to be
repurchased by the Seller pursuant to Section 2.02, 2.03 or 3.24 hereof and as
confirmed by an Officer's Certificate from the Seller to the Trustee, an amount
equal to the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as of the date of such purchase plus (ii) (ii) 30 days accrued
interest thereon at the applicable Net Mortgage Rate, plus any portion of the
Servicing Fee, Servicing Advances and Advances payable to the Servicer of the
Mortgage Loan plus (iii) any costs and damages of the Trust Fund in connection
with any violation by such Mortgage Loan of any abusive or predatory lending
law, including any expenses incurred by the Trustee with respect to such
Mortgage Loan prior to the purchase thereof.

         RATING AGENCY: Each of S&P and Moody's. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.

         REALIZED LOSS: With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the Stated Principal Balance of such Mortgage Loan as of the commencement of
the calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to


                                      -30-
<PAGE>

which interest was last paid by the Mortgagor through the end of the calendar
month in which such Final Recovery Determination was made, calculated in the
case of each calendar month during such period (A) at an annual rate equal to
the annual rate at which interest was then accruing on such Mortgage Loan and
(B) on a principal amount equal to the Stated Principal Balance of such Mortgage
Loan as of the close of business on the Distribution Date during such calendar
month, minus (iii) the proceeds, if any, received in respect of such Mortgage
Loan during the calendar month in which such Final Recovery Determination was
made, net of amounts that are payable therefrom to the Servicer pursuant to this
Agreement. To the extent the Servicer receives Subsequent Recoveries and respect
to any Mortgage Loan, the amount of the Realized Loss with respect to that
Mortgage Loan will be reduced to the extent that Subsequent Recoveries are
applied to reduce the Certificate Principal Balance of any Class of Certificates
on any Distribution Date.

         With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
Stated Principal Balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, minus (iii) the aggregate of
all unreimbursed Advances and Servicing Advances.

         With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.

         With respect to each Mortgage Loan which has become the subject of a
Debt Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.

         In addition, to the extent the Servicer receives Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the Realized Loss with respect
to that Mortgage Loan will be reduced to the extent such Subsequent Recoveries
are applied to reduce the Certificate Principal Balance of any Class of
Certificates on any Distribution Date.

         RECORD DATE: With respect to the Certificates (other than the Group II
Certificates and Subordinate Certificates) and any Distribution Date, the close
of business on the last Business Day of the month preceding the month in which
such Distribution Date occurs. With respect to the Group II Certificates and
Subordinate Certificates and any Distribution Date, so long as the Group II
Certificates and Subordinate Certificates are Book-Entry Certificates, the
Business Day


                                      -31-
<PAGE>

preceding such Distribution Date, and otherwise, the close of business on the
last Business Day of the month preceding the month in which such Distribution
Date occurs.

         REFERENCE BANKS: Shall mean leading banks selected by the Trustee and
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, (ii) which have been
designated as such by the Trustee and (iii) which are not controlling,
controlled by, or under common control with, the Depositor, the Seller or the
Servicer.

         REFERENCE BANK RATE: With respect to any Accrual Period shall mean the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
0.03125%, of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in an amount approximately equal to the
aggregate Certificate Principal Balance of the Publicly Offered Certificates
(other than the Group I Certificates) for such Accrual Period, 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, rounded
upwards, if necessary, to the nearest whole multiple of 0.03125%, of the rates
quoted by one or more major banks in New York City, selected by the Trustee, as
of 11:00 a.m., New York City time, on such date for loans in United States
dollars to leading European banks for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of the
Publicly Offered Certificates (other than the Group I Certificates) for such
Accrual Period.

         REGULAR CERTIFICATE: Any Certificate other than a Residual Certificate.

         RELIEF ACT: The Servicemembers Civil Relief Act of 2003, as amended
from time to time.

         REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.

         REMIC I: The segregated pool of assets subject hereto, constituting the
primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made, consisting of (i) the Mortgage Loans and
all interest accruing and principal due with respect thereto after the Cut-off
Date to the extent not applied in computing the Cut-off Date Principal Balance
thereof and all related Prepayment Charges; (ii) the related Mortgage Files,
(iii) the Custodial Account (other than any amounts representing any Servicer
Prepayment Charge Payment Amount), the Distribution Account, the Class P
Certificate Account and such assets that are deposited therein from time to
time, together with any and all income, proceeds and payments with respect
thereto; (iv) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (v) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; (vi) the
rights under the Mortgage Loan Purchase Agreement, and (vii) all proceeds of the
foregoing, including proceeds of conversion, voluntary or involuntary, of any of
the foregoing into cash or other liquid property. Notwithstanding the foregoing,
however, REMIC I specifically excludes (i) all payments and other collections of
principal and interest due on the Mortgage Loans on or before the Cut-off Date,
(ii) all Prepayment Charges payable in connection with Principal Prepayments



                                      -32-
<PAGE>

on the Mortgage Loans made before the Cut-off Date, and (iii) the Basis Risk
Shortfall Reserve Fund.

         REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-AA minus the Marker Rate, divided by (b) 12.

         REMIC I MARKER ALLOCATION PERCENTAGE: 0.50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC I Regular
Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest
LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-M1,
REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I
Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and REMIC I Regular
Interest LTI-ZZ.

         REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest
LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2,
REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-M1, REMIC I
Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular
Interest LTI-M4 and REMIC I Regular Interest LTI-M5, in each case as of such
date of determination.

         REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC I Regular Interest
LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1,
REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I
Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular
Interest LTI-M3, REMIC I Regular Interest LTI-M4 and REMIC I Regular Interest
LTI-M5 and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest
LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2,
REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I
Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I Regular
Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ.

         REMIC I REGULAR INTERESTS: REMIC I Regular Interest LTI-AA, REMIC I
Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular
Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest
LTI-IIA3, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2,
REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I
Regular Interest LTI-M5, REMIC I Regular Interest LTI-ZZ, REMIC I Regular
Interest LTI-P, REMIC I Regular Interest LT1-1SUB, REMIC I Regular Interest
LTI-1GRP, REMIC I Regular Interest LT1-2SUB, REMIC I Regular Interest LTI-2GRP
and REMIC I Regular Interest LT1-XX.



                                      -33-
<PAGE>

         REMIC I REGULAR INTEREST LTI-AA: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-AA shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IA1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IA1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IA2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IA2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IIA1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IIA1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IIA2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IIA2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IIA3: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IIA3 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-M1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal,



                                      -34-
<PAGE>

subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

         REMIC I REGULAR INTEREST LTI-M2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-M3: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M3 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-M4: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M4 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-M5: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M5 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-1SUB: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-1SUB shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-1GRP: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-1GRP shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-2SUB: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-2SUB shall accrue
interest at the related Uncertificated REMIC


                                      -35-
<PAGE>

I Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

         REMIC I REGULAR INTEREST LTI-2GRP: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-2GRP shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-P: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-P shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

         REMIC I REGULAR INTEREST LTI-XX: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-XX shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-ZZ: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-ZZ shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-ZZ MAXIMUM INTEREST DEFERRAL AMOUNT: With
respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I Regular Interest
LTI-ZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC I Regular Interest LTI-ZZ minus the REMIC I
Overcollateralization Amount, in each case for such Distribution Date, over (ii)
Uncertificated Accrued Interest on REMIC I Regular Interest LTI-IA1, REMIC I
Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular
Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest
LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC
I Regular Interest LTI-M4 and REMIC I Regular Interest LTI-M5 for such
Distribution Date, with the rate on each such REMIC I Regular Interest subject
to a cap equal to the related Pass-Through Rate.

         REMIC I SUB WAC ALLOCATION PERCENTAGE: 0.50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-1GRP, REMIC I Regular
Interest LTI-2SUB, REMIC I Regular Interest LTI-2GRP and REMIC I Regular
Interest LTI-XX.



                                      -36-
<PAGE>

         REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each REMIC I Regular Interest ending with the designation
"SUB,", equal to the ratio between, with respect to each such REMIC I Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the Group
I Mortgage Loans or Group II Mortgage Loans, as applicable over (y) the current
Certificate Principal Balance of related Senior Certificates.

         REMIC I TARGETED OVERCOLLATERALIZATION AMOUNT: 1% of the Targeted
Overcollateralization Amount.

         REMIC II: The segregated pool of assets consisting of all of the REMIC
I Regular Interests conveyed in trust to the Trustee, for the benefit of the
REMIC II Certificateholders pursuant to Section 2.07, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.

         REMIC II CERTIFICATE: Any Regular Certificate.

         REMIC OPINION: Shall mean an Opinion of Counsel to the effect that the
proposed action will not have an adverse affect on any REMIC created hereunder.

         REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.

         REMIC REGULAR INTEREST: Any REMIC I Regular Interest or a Regular
Certificate.

         REMITTANCE DATE: Shall mean the 18th day of the month and if such day
is not a Business Day, the immediately succeeding Business Day.

         REO PROPERTY: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.

         REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a Request for Release, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) have an adjustable Mortgage Rate not less than or more than 1% per annum
higher than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same
or higher credit quality characteristics than that of the Deleted Mortgage Loan;
(iv) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (v) have a remaining term to maturity no greater than (and not more than
one year less than) that of the Deleted Mortgage Loan; (vi) not permit
conversion of the Mortgage Rate from a fixed rate to a variable rate; (vii) be
secured by a first lien on the related Mortgaged Property; (viii) constitute the
same occupancy type as the Deleted Mortgage Loan or be owner occupied; (ix) have
a Maximum Mortgage Interest Rate not less than the Maximum Mortgage Interest
Rate on the Deleted Loan; (x) have a Minimum Mortgage Interest Rate not less
than the Minimum Mortgage Interest Rate of the Deleted Loan;


                                      -37-
<PAGE>

(xi) have a Gross Margin equal to the Gross Margin of the Deleted Loan; (xii)
have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Deleted Loan; and (xiii) comply with each representation
and warranty set forth in the Mortgage Loan Purchase Agreement.

         REQUEST FOR RELEASE: The Request for Release to be submitted by the
Seller or the Servicer to the Custodian substantially in the form of Exhibit H.
Each Request for Release furnished to the Custodian by the Seller or the
Servicer shall be in duplicate and shall be executed by an officer of such
Person or a Authorized Servicer Representative (or, if furnished electronically
to the Custodian, shall be deemed to have been sent and executed by an officer
of such Person or a Authorized Servicer Representative) of the Servicer.

         REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.

         RESIDUAL CERTIFICATES: The Class R Certificates.

         RESPONSIBLE OFFICER: With respect to the Trustee, any Vice President,
any Assistant Vice President, the Secretary, any Assistant Secretary, any Trust
Officer, any other officer customarily performing functions similar to those
performed by any of the above designated officers or other officers of the
Trustee specified by the Trustee having direct responsibility over this
Agreement and customarily performing functions similar to those performed by any
one of the designated officers, as to whom, with respect to a particular matter,
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.

         ROLLING THREE MONTH DELINQUENCY RATE: With respect to any Distribution
Date and the Mortgage Loans will be the fraction, expressed as a percentage,
equal to the average of the Delinquency Rates for each of the three (or one and
two, in the case of the first and second Distribution Dates) immediately
preceding months.

         S&P: Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
or its successor in interest.

         SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.

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

         SELLER: Nomura Credit & Capital, Inc., a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.

         SENIOR CERTIFICATES: The Class I-A-1, Class I-A-2, Class II-A-1, Class
II-A-2 and Class II-A-3 Certificates.

         SENIOR ENHANCEMENT PERCENTAGE: With respect to any Distribution Date
will be the fraction, expressed as a percentage, the numerator of which is the
sum of the aggregate Certificate Principal Balance of the Subordinate
Certificates and the Overcollateralization Amount, in each case after giving
effect to payments on such Distribution Date (assuming no


                                      -38-
<PAGE>

Trigger Event is in effect), and the denominator of which is the Aggregate Loan
Balance for such Distribution Date.

         SENIOR PRINCIPAL PAYMENT AMOUNT: With respect to any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect
with respect to such Distribution Date, the amount, if any, by which (x) the
Certificate Principal Balances of the Senior Certificates, in each case,
immediately prior to such Distribution Date exceed (y) the lesser of (A) the
product of (i) approximately 78.30% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan
Balance as of the Cut-off Date.

         SERVICER: GMAC Mortgage Corporation or any successor thereto appointed
hereunder in connection with the servicing and administration of the Mortgage
Loans.

         SERVICER'S ASSIGNEE: As defined in Section 5.01(b)(ii).

         SERVICER DEFAULT: As defined in Section 8.01.

         SERVICER PREPAYMENT CHARGE PAYMENT AMOUNT: The amount payable by the
Servicer in respect of any waived Prepayment Charges pursuant to Section 3.01.

         SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Servicer of its servicing obligations hereunder, including,
but not limited to, the cost of (i) the preservation, restoration, inspection,
valuation and protection of a Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, and including any expenses
incurred in relation to any such proceedings that result from the Mortgage Loan
being registered in the MERS(R) System, (iii) the management and liquidation of
any REO Property (including, without limitation, realtor's commissions), (iv)
compliance with any obligations under Section 3.07 hereof to cause insurance to
be maintained and (v) payment of taxes.

         SERVICING FEE: As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as of the last day of the related Due
Period or, in the event of any payment of interest that accompanies a Principal
Prepayment in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the Servicing Fee Rate on the
same Stated Principal Balance of such Mortgage Loan used to calculate the
payment of interest on such Mortgage Loan.

         SERVICING FEE RATE: 0.25% per annum.

         SIX-MONTH LIBOR: The per annum rate equal to the average of interbank
offered rates for Six-Month U.S. dollar-denominated deposits in the London
market based on quotations of major banks as published in The Wall Street
Journal and most recently available as of the time specified in the related
Mortgage Note.

         STARTUP DAY: The Startup Day for each REMIC formed hereunder shall be
the Closing Date.



                                      -39-
<PAGE>

         STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related
REO Property and any Distribution Date, the Cut-off Date Principal Balance
thereof minus the sum of (i) the principal portion of the Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Servicer as recoveries of principal in accordance with
Section 3.09 of this Agreement with respect to such Mortgage Loan, that were
received by the Servicer as of the close of business on the last day of the
Prepayment Period related to such Distribution Date and (iii) any Realized
Losses on such Mortgage Loan incurred during the related Prepayment Period. The
Stated Principal Balance of a Liquidated Loan equals zero.

         STEPDOWN DATE: The earlier to occur of (i) the first Distribution Date
following the Distribution Date in which the Certificate Principal Balances of
the Senior Certificates have been reduced to zero and (ii) the later to occur of
(x) the Distribution Date in March 2008 and (y) the first Distribution Date on
which the Senior Enhancement Percentage (calculated for this purpose only after
taking into account distributions of principal on the Mortgage Loans, but prior
to any distributions to the holders of the Publicly Offered Certificates on such
Distribution Date) is greater than or equal to approximately 21.70%.

         SUBORDINATE CERTIFICATES: The Class M-1, Class M-2, Class M-3, Class
M-4 and Class M-5 Certificates.

         SUBSEQUENT RECOVERIES: With respect to each Mortgage Loan, the amount
recovered by the Servicer (net of reimbursable expenses) with respect to a
defaulted Mortgage Loan with respect to which a Realized Loss was incurred,
after the liquidation or disposition of such Mortgage Loan.

         SUBSERVICING AGREEMENT: Any agreement entered into between the Servicer
and a subservicer with respect to the subservicing of any Mortgage Loan subject
to this Agreement by such subservicer.

         SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03(d).

         SUCCESSOR SERVICER: The Trustee or any successor to the Servicer
appointed pursuant to Section 8.02 after the occurrence of a Servicer Default or
upon the resignation of the Servicer pursuant to this Agreement.

         TARGETED OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution
Date prior to the Stepdown Date, approximately 0.65% of the Aggregate Loan
Balance as of the Cut-off Date; with respect to any Distribution Date on or
after the Stepdown Date and with respect to which a Trigger Event is not in
effect, the greater of (a) 1.30% of the Aggregate Loan Balance for such
Distribution Date, or (b) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date; with respect to any Distribution Date on or after the Stepdown Date with
respect to which a Trigger Event is in effect, the Targeted
Overcollateralization Amount for the last Distribution Date on which a Trigger
Event was not in effect. Notwithstanding the foregoing, on and after any
Distribution Date following the reduction of the aggregate Certificate Principal
Balance of the


                                      -40-
<PAGE>

Group I Certificates, the Group II Certificates and the Subordinate Certificates
to zero, the Targeted Overcollateralization Amount shall be zero.

         TAX MATTERS PERSON: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. The holder of the greatest Percentage
Interest in a Class of Residual Certificates shall be the Tax Matters Person for
the related REMIC. The Trustee, or any successor thereto or assignee thereof
shall serve as tax administrator hereunder and as agent for the related Tax
Matters Person.

         TERMINATION PRICE: The price, calculated as set forth in Section 10.01,
to be paid in connection with the purchase of the Mortgage Loans pursuant to
Section 10.01.

         TRANSFER AFFIDAVIT: As defined in Section 6.02(c).

         TRANSFER: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.

         TRIGGER EVENT: With respect to any Distribution Date, a Trigger Event
is in effect if either (i) the Rolling Three Month Delinquency Rate as of the
last day of the related Due Period equals or exceeds 28.00% of the Senior
Enhancement Percentage for such Distribution Date or (ii) the cumulative
Realized Losses as a percentage of the original Aggregate Loan Balance on the
Closing Date for such Distribution Date is greater than the percentage set forth
in the following table:

         RANGE OF DISTRIBUTION DATES          Cumulative Loss Percentage
         ---------------------------          --------------------------
         March 2008 - February 2009                      1.10%
         March 2009 - February 2010                      1.55%
         March 2010 - February 2011                      2.05%
         March 2011 and thereafter                       2.40%

         *The cumulative loss percentages set forth above are applicable to the
first Distribution Date in the corresponding range of Distribution Dates. The
cumulative loss percentage for each succeeding Distribution Date in a range
increases incrementally by 1/12 of the positive difference between the
percentage applicable to the first Distribution Date in that range and the
percentage applicable to the first Distribution Date in the succeeding range.

         TRUST FUND: Collectively, the assets of REMIC I, REMIC II, and the
Basis Risk Shortfall Reserve Fund.

         TRUSTEE: JPMorgan Chase Bank, N.A., a national banking association, not
in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as successor
trustee hereunder.



                                      -41-
<PAGE>

         UNCERTIFICATED ACCRUED INTEREST: With respect to each Uncertificated
REMIC Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass-Through Rate on the Uncertificated
Principal Balance of such REMIC Regular Interest. In each case, Uncertificated
Accrued Interest will be reduced by any Prepayment Interest Shortfalls and
shortfalls resulting from application of the Relief Act (allocated to such REMIC
Regular Interests as set forth in Sections 1.02 and 5.07).

         UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest, the principal amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 5.07 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 5.07. The
Uncertificated Principal Balance of each REMIC Regular Interest shall never be
less than zero.

         UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC I
Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC I Regular
Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest
LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-M1,
REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I
Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5, REMIC I Regular
Interest LTI-ZZ, REMIC I Regular Interest LT1-1SUB, REMIC I Regular Interest
LT1-2SUB and REMIC I Regular Interest LT1-XX, the weighted average Net Mortgage
Rate of the Mortgage Loans. With respect to REMIC I Regular Interest LTI-1GRP,
the weighted average Net Mortgage Rate of the Group I Mortgage Loans. With
respect to REMIC I Regular Interest LTI-2GRP, the weighted average Net Mortgage
Rate of the Group II Mortgage Loans. REMIC I Regular Interest LTI-P will not
accure interest.

         VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions
hereunder. Voting Rights shall be allocated (i) 98% to the Certificates (other
than the Class X, Class P and the Residual Certificates) and (ii) 1% to each of
the Class X Certificates and Class P Certificates. Voting rights will be
allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests. The Residual Certificates will not be allocated
any voting rights.

         Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.

         For purposes of calculating the amount of the Interest Remittance
Amount for any Distribution Date, (1) the aggregate amount of any Net Interest
Shortfalls in respect of the Mortgage Loans for any Distribution Date shall
reduce the Interest Remittance Amount on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Certificate Principal Balance of each class of Publicly
Offered Certificates and (2) the aggregate amount of any Realized Losses
allocated to the Class I-A-2, Class II-A-3 and Subordinate Certificates and
Basis Risk Shortfalls allocated to the Publicly Offered Certificates for any
Distribution Date shall be allocated to the Class X



                                      -42-
<PAGE>

Certificates based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the Certificate Principal Balance
thereof on any Distribution Date.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Regular Interests for any Distribution Date:

         The REMIC I Marker Allocation Percentage of the aggregate amount of any
Net Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC I Regular Interest LTI-AA,
REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I
Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular
Interest LTI-IIA3, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest
LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC
I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ, PRO RATA based
on, and to the extent of, one month's interest at the then applicable respective
Uncertificated REMIC I Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC I Regular Interest; and

         The REMIC I Sub WAC Allocation Percentage of the aggregate amount of
any Net Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated to Uncertificated Accrued Interest payable
to REMIC I Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-1GRP, REMIC I
Regular Interest LTI-2SUB, REMIC I Regular Interest LTI-2GRP and REMIC I Regular
Interest LTI-XX, PRO RATA based on, and to the extent of, one month's interest
at the then applicable respective Uncertificated REMIC I Pass-Through Rate on
the respective Uncertificated Principal Balance of each such REMIC I Regular
Interest.



                                      -43-
<PAGE>



                                   ARTICLE II

                            CONVEYANCE OF TRUST FUND
                         REPRESENTATIONS AND WARRANTIES

         Section 2.01 CONVEYANCE OF TRUST FUND.

         The Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to the Depositor, without recourse, all the right, title and interest of
the Seller in and to the assets in the Trust Fund.

         The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein.

         The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the use and benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund.

         In connection with such sale, the Depositor has delivered to, and
deposited with, the Trustee or the Custodian, as its agent, the following
documents or instruments with respect to each Mortgage Loan so assigned: (i) the
original Mortgage Note, including any riders thereto, endorsed without recourse
to the order of "JPMorgan Chase Bank, N.A., as Trustee for certificateholders of
Nomura Asset Acceptance Corporation, Mortgage Pass-Through Certificates, Series
2005-AR1," and showing to the extent available to the Seller an unbroken chain
of endorsements from the original payee thereof to the Person endorsing it to
the Trustee, (ii) the original Mortgage and, if the related Mortgage Loan is a
MOM Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original
is not available, a copy), with evidence of such recording indicated thereon (or
if clause (x) in the proviso below applies, shall be in recordable form), (iii)
unless the Mortgage Loan is a MOM Loan, the assignment (either an original or a
copy, which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the Trustee of the
Mortgage with respect to each Mortgage Loan in the name of "JPMorgan Chase Bank,
N.A., as Trustee for certificateholders of Nomura Asset Acceptance Corporation,
Mortgage Pass-Through Certificates, Series 2005-AR1," which shall have been
recorded (or if clause (x) in the proviso below applies, shall be in recordable
form), (iv) an original or a copy of all intervening assignments of the
Mortgage, if any, to the extent available to the Seller, with evidence of
recording thereon, (v) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance, if
available, or a copy thereof, or, in the event that such original title
insurance policy is unavailable, a photocopy thereof, or in lieu thereof, a
current lien search on the related Mortgaged Property and (vi) originals or
copies of all available assumption, modification or substitution agreements, if
any; provided, however, that in lieu of the foregoing, the Seller may deliver
the following documents, under the circumstances set forth below: (x) if any
Mortgage, assignment thereof to the Trustee or intervening assignments thereof
have been delivered or are being delivered to recording offices for recording
and have not been returned in time to permit



                                      -44-
<PAGE>

their delivery as specified above, the Depositor may deliver a true copy thereof
with a certification by the Seller or the title company issuing the commitment
for title insurance, on the face of such copy, substantially as follows:
"Certified to be a true and correct copy of the original, which has been
transmitted for recording"; and (y) in lieu of the Mortgage Notes relating to
the Mortgage Loans identified in the list set forth in Exhibit J, the Depositor
may deliver a lost note affidavit and indemnity and a copy of the original note,
if available; and provided, further, that in the case of Mortgage Loans which
have been prepaid in full after the Cut-Off Date and prior to the Closing Date,
the Depositor, in lieu of delivering the above documents, may deliver to the
Trustee a certification of a Authorized Servicer Representative to such effect
and in such case shall deposit all amounts paid in respect of such Mortgage
Loans, in the Distribution Account on the Closing Date. In the case of the
documents referred to in clause (x) related above, the Depositor shall deliver
such documents to the Trustee promptly after they are received. The Seller shall
cause, at its expense, the Mortgage and intervening assignments, if any, and to
the extent required in accordance with the foregoing, the assignment of the
Mortgage to the Trustee to be submitted for recording promptly after the Closing
Date; provided that the Seller need not cause to be recorded any assignment (a)
in any jurisdiction under the laws of which, as evidenced by an Opinion of
Counsel delivered by the Seller to the Trustee and the Rating Agencies, the
recordation of such assignment is not necessary to protect the Trustee's
interest in the related Mortgage Loan or (b) if MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage as mortgagee of
record solely as nominee for Seller and its successors and assigns. In the event
that the Seller or the Depositor gives written notice to the Trustee that a
court has recharacterized the sale of the Mortgage Loans as a financing, the
Seller shall submit or cause to be submitted for recording as specified above
or, should the Seller fail to perform such obligations, the Trustee shall cause
each such previously unrecorded assignment to be submitted for recording as
specified above at the expense of the Trust pursuant to Section 9.05. In the
event a Mortgage File is released to the Servicer as a result of such Person
having completed a Request for Release, the Trustee shall, if not so completed,
complete the assignment of the related Mortgage in the manner specified in
clause (iii) above.

         In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Seller further agrees that it will cause, at the
Seller's own expense, within 30 days after the Closing Date, the MERS(R) System
to indicate that such Mortgage Loans have been assigned by the Seller to the
Depositor and by the Depositor to the Trustee in accordance with this Agreement
for the benefit of the related Certificateholders by including (or deleting, in
the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files (a) the code in the field which identifies the
specific Trustee and (b) the code in the field "Pool Field" which identifies the
series of the Certificates issued in connection with such Mortgage Loans. The
Seller further agrees that it will not, and will not permit any Servicer to
alter the codes referenced in this paragraph with respect to any Mortgage Loan
during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.

         Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.

         (a) Based on the Initial Certification received by it from the
Custodian, the Trustee acknowledges receipt of, subject to the further review
and exceptions reported by the Custodian pursuant to the procedures described
below, the documents (or certified copies thereof) delivered


                                      -45-
<PAGE>

to the Trustee or the Custodian on its behalf pursuant to Section 2.01 and
declares that it holds and will continue to hold directly or through a custodian
those documents and any amendments, replacements or supplements thereto and all
other assets of the Trust Fund delivered to it in trust for the use and benefit
of all present and future Holders of the Certificates. On the Closing Date, the
Custodian on the Trustee's behalf will deliver an Initial Certification in the
form annexed hereto as Exhibit C-1, confirming whether or not it has received
the Mortgage File for each Mortgage Loan, but without review of such Mortgage
File, except to the extent necessary to confirm whether such Mortgage File
contains the original Mortgage Note or a lost note affidavit and indemnity in
lieu thereof. No later than 90 days after the Closing Date, the Custodian on the
Trustee's behalf shall, for the benefit of the Certificateholders, review each
Mortgage File delivered to it and execute and deliver to the Seller and the
Trustee an Interim Certification substantially in the form annexed hereto as
Exhibit C-2. In conducting such review, the Custodian on the Trustee's behalf
will ascertain whether all required documents have been executed and received
and whether those documents relate, determined on the basis of the Mortgagor
name, original principal balance and loan number, to the Mortgage Loans
identified in Exhibit B to this Agreement, as supplemented (provided, however,
that with respect to those documents described in subclauses (iv) and (vi) of
Section 2.01, such obligations shall extend only to documents actually delivered
pursuant to such subclauses). In performing any such review, the Custodian may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Custodian finds any document constituting part of the Mortgage File not to have
been executed or received, or to be unrelated to the Mortgage Loans identified
in Exhibit B, determined on the basis of the Mortgagor's name, the original
principal balance and the Mortgage Loan number, or to appear to be defective on
its face, the Custodian shall include such information in the exception report
attached to the Interim Certification. The Seller shall correct or cure any such
defect or, if prior to the end of the second anniversary of the Closing Date,
the Seller may substitute for the related Mortgage Loan a Replacement Mortgage
Loan, which substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2.03 or shall deliver to the Trustee an Opinion
of Counsel to the effect that such defect does not materially or adversely
affect the interests of the Certificateholders in such Mortgage Loan within 60
days from the date of notice from the Trustee of the defect and if the Seller
fails to correct or cure the defect or deliver such opinion within such period,
the Seller will, subject to Section 2.03, within 90 days from the notification
of the Trustee purchase such Mortgage Loan at the Purchase Price; provided,
however, that if such defect relates solely to the inability of the Seller to
deliver the Mortgage, assignment thereof to the Trustee, or intervening
assignments thereof with evidence of recording thereon because such documents
have been submitted for recording and have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan if
the Seller delivers such documents promptly upon receipt, but in no event later
than 360 days after the Closing Date.

         (b) No later than 180 days after the Closing Date, the Custodian on the
Trustee's behalf will review, for the benefit of the Certificateholders, the
Mortgage Files and will execute and deliver or cause to be executed and
delivered to the Seller and the Trustee, a Final Certification substantially in
the form annexed hereto as Exhibit C-3. In conducting such review, the Custodian
on the Trustee's behalf will ascertain whether each document required to be
recorded has been returned from the recording office with evidence of recording
thereon and the Custodian on the Trustee's behalf has received either an
original or a copy thereof, as required



                                      -46-
<PAGE>

in Section 2.01 (provided, however, that with respect to those documents
described in subclauses (iv) and (vi) of Section 2.01, such obligations shall
extend only to documents actually delivered pursuant to such subclauses). If the
Custodian finds any document with respect to a Mortgage Loan has not been
received, or to be unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified in
Exhibit B or to appear defective on its face, the Custodian shall note such
defect in the exception report attached to the Final Certification and the
Trustee shall promptly notify the Seller. The Seller shall correct or cure any
such defect or, if prior to the end of the second anniversary of the Closing
Date, the Seller may substitute for the related Mortgage Loan a Replacement
Mortgage Loan, which substitution shall be accomplished in the manner and
subject to the conditions set forth in Section 2.03 or shall deliver to the
Trustee an Opinion of Counsel to the effect that such defect does not materially
or adversely affect the interests of Certificateholders in such Mortgage Loan
within 60 days from the date of notice from the Trustee of the defect and if the
Seller is unable within such period to correct or cure such defect, or to
substitute the related Mortgage Loan with a Replacement Mortgage Loan or to
deliver such opinion, the Seller shall, subject to Section 2.03, within 90 days
from the notification of the Trustee, purchase such Mortgage Loan at the
Purchase Price; provided, however, that if such defect relates solely to the
inability of the Seller to deliver the Mortgage, assignment thereof to the
Trustee or intervening assignments thereof with evidence of recording thereon,
because such documents have not been returned by the applicable jurisdiction,
the Seller shall not be required to purchase such Mortgage Loan, if the Seller
delivers such documents promptly upon receipt, but in no event later than 360
days after the Closing Date.

         (c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with subsections 2.02(a) or (b) above or Section 2.03, the Seller
shall remit the applicable Purchase Price to the Trustee for deposit in the
Distribution Account and shall provide written notice to the Trustee detailing
the components of the Purchase Price, signed by an authorized officer. Upon
deposit of the Purchase Price in the Distribution Account and upon receipt of a
Request for Release with respect to such Mortgage Loan, the Trustee will release
to the Seller the related Mortgage File and the Trustee shall execute and
deliver all instruments of transfer or assignment, without recourse, furnished
to it by the Seller, as are necessary to vest in the Seller title to and rights
under the Mortgage Loan. Such purchase shall be deemed to have occurred on the
date on which the deposit into the Distribution Account was made. The Trustee
shall promptly notify the Rating Agencies of such repurchase. The obligation of
the Seller to cure, repurchase or substitute for any Mortgage Loan as to which a
defect in a constituent document exists shall be the sole remedies respecting
such defect available to the Certificateholders or to the Trustee on their
behalf. The Seller shall promptly reimburse the Trustee for any expenses
incurred by the Trustee in respect of enforcing the remedies for such breach.

         (d) The Seller shall deliver to the Trustee, and Trustee agrees to
accept the Mortgage Note and other documents constituting the Mortgage File with
respect to any Replacement Mortgage Loan, which the Custodian will review as
provided in subsections 2.02(a) and 2.02(b), provided, that the Closing Date
referred to therein shall instead be the date of delivery of the Mortgage File
with respect to each Replacement Mortgage Loan.



                                      -47-
<PAGE>

         Section 2.03  REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER
                       AND THE SELLER.

         (a) The Servicer hereby represents and warrants to, and covenants with,
the Seller, the Depositor and the Trustee as follows, as of the Closing Date:

                  (i) It is duly organized and is validly existing and in good
         standing under the laws of the Commonwealth of Pennsylvania and is duly
         authorized and qualified to transact any and all business contemplated
         by this Agreement to be conducted by it in any state in which a
         Mortgaged Property is located or is otherwise not required under
         applicable law to effect such qualification and, in any event, is in
         compliance with the doing business laws of any such state, to the
         extent necessary to ensure its ability to service the Mortgage Loans in
         accordance with the terms of this Agreement and to perform any of its
         other obligations under this Agreement in accordance with the terms
         hereof.

                  (ii) It has the full corporate power and authority to service
         each Mortgage Loan, and to execute, deliver and perform, and to enter
         into and consummate the transactions contemplated by this Agreement and
         has duly authorized by all necessary corporate action on its part the
         execution, delivery and performance of this Agreement; and this
         Agreement, assuming the due authorization, execution and delivery
         hereof by the other parties hereto, constitutes its legal, valid and
         binding obligation, enforceable against it in accordance with its
         terms, except that (a) the enforceability hereof may be limited by
         bankruptcy, insolvency, moratorium, receivership and other similar laws
         relating to creditors' rights generally and (b) the remedy of specific
         performance and injunctive and other forms of equitable relief may be
         subject to equitable defenses and to the discretion of the court before
         which any proceeding therefor may be brought and further subject to
         public policy with respect to indemnity and contribution under
         applicable securities law.

                  (iii) The execution and delivery of this Agreement by it, the
         servicing of the Mortgage Loans by it under this Agreement, the
         consummation of any other of the transactions contemplated by this
         Agreement, and the fulfillment of or compliance with the terms hereof
         are in its ordinary course of business and will not (A) result in a
         material breach of any term or provision of its charter or by-laws or
         (B) materially conflict with, result in a material breach, violation or
         acceleration of, or result in a material default under, the terms of
         any other material agreement or instrument to which it is a party or by
         which it may be bound, or (C) constitute a material violation of any
         statute, order or regulation applicable to it of any court, regulatory
         body, administrative agency or governmental body having jurisdiction
         over it; and it is not in breach or violation of any material indenture
         or other material agreement or instrument, or in violation of any
         statute, order or regulation of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over it
         which breach or violation may materially impair its ability to perform
         or meet any of its obligations under this Agreement.

                  (iv) It is an approved servicer of conventional mortgage loans
         for Fannie Mae or Freddie Mac and is a mortgagee approved by the
         Secretary of Housing and Urban Development pursuant to sections 203 and
         211 of the National Housing Act.



                                      -48-
<PAGE>

                  (v) No litigation is pending or, to the best of its knowledge,
         threatened in writing, against it that would materially and adversely
         affect the execution, delivery or enforceability of this Agreement or
         its ability to service the Mortgage Loans or to perform any of its
         other obligations under this Agreement in accordance with the terms
         hereof.

                  (vi) No consent, approval, authorization or order of any court
         or governmental agency or body is required for its execution, delivery
         and performance of, or compliance with, this Agreement or the
         consummation of the transactions contemplated hereby, or if any such
         consent, approval, authorization or order is required, it has obtained
         the same.

                  (vii) The Servicer has accurately and fully reported, and will
         continue to accurately and fully report its borrower credit files to
         each of the credit repositories in a timely manner materially in
         accordance with the Fair Credit Reporting Act and its implementing
         legislation.

                  (viii) The Servicer is a member of MERS in good standing, and
         will comply in all material respects with the rules and procedures of
         MERS in connection with the servicing of the Mortgage Loans that are
         registered with MERS.

                  (ix) The Servicer will not waive any Prepayment Charge with
         respect to a Mortgage Loan unless it is waived in accordance with the
         standard set forth in Section 3.01.

If the covenant of the Servicer set forth in Section 2.03(a)(ix) above is
breached by the Servicer, the Servicer will pay the amount of such waived
Prepayment Charge, for the benefit of the Holders of the Class P Certificates by
depositing such amount into the Custodial Account within 90 days of the earlier
of discovery by the Servicer or receipt of notice by the Servicer of such
breach. Notwithstanding the foregoing, or anything to the contrary contained in
this Agreement, the Servicer shall have no liability for a waiver of any
Prepayment Charge in the event that the Servicer's determination to make such a
waiver was made by the Servicer in reliance on information properly received by
the Servicer from any Person in accordance with the terms of this Agreement.

         (b) The Seller hereby represents and warrants to and covenants with,
the Depositor, the Servicer and the Trustee as follows, as of the Closing Date:

                  (i) The Seller is duly organized, validly existing and in good
         standing under the laws of the State of Delaware and is duly authorized
         and qualified to transact any and all business contemplated by this
         Agreement to be conducted by the Seller in any state in which a
         Mortgaged Property is located or is otherwise not required under
         applicable law to effect such qualification and, in any event, is in
         compliance with the doing business laws of any such state, to the
         extent necessary to ensure its ability to enforce each Mortgage Loan,
         to sell the Mortgage Loans in accordance with the terms of this
         Agreement and to perform any of its other obligations under this
         Agreement in accordance with the terms hereof.



                                      -49-
<PAGE>

                  (ii) The Seller has the full corporate power and authority to
         sell each Mortgage Loan, and to execute, deliver and perform, and to
         enter into and consummate the transactions contemplated by this
         Agreement and has duly authorized by all necessary corporate action on
         the part of the Seller the execution, delivery and performance of this
         Agreement; and this Agreement, assuming the due authorization,
         execution and delivery hereof by the other parties hereto, constitutes
         a legal, valid and binding obligation of the Seller, enforceable
         against the Seller in accordance with its terms, except that (a) the
         enforceability hereof may be limited by bankruptcy, insolvency,
         moratorium, receivership and other similar laws relating to creditors'
         rights generally and (b) the remedy of specific performance and
         injunctive and other forms of equitable relief may be subject to
         equitable defenses and to the discretion of the court before which any
         proceeding therefor may be brought and further subject to public policy
         with respect to indemnity and contribution under applicable securities
         law.

                  (iii) The execution and delivery of this Agreement by the
         Seller, the sale of the Mortgage Loans by the Seller under this
         Agreement, the consummation of any other of the transactions
         contemplated by this Agreement, and the fulfillment of or compliance
         with the terms hereof are in the ordinary course of business of the
         Seller and will not (A) result in a material breach of any term or
         provision of the charter or by-laws of the Seller or (B) materially
         conflict with, result in a material breach, violation or acceleration
         of, or result in a material default under, the terms of any other
         material agreement or instrument to which the Seller is a party or by
         which it may be bound, or (C) constitute a material violation of any
         statute, order or regulation applicable to the Seller of any court,
         regulatory body, administrative agency or governmental body having
         jurisdiction over the Seller; and the Seller is not in breach or
         violation of any material indenture or other material agreement or
         instrument, or in violation of any statute, order or regulation of any
         court, regulatory body, administrative agency or governmental body
         having jurisdiction over it which breach or violation may materially
         impair the Seller's ability to perform or meet any of its obligations
         under this Agreement.

                  (iv) The Seller is an approved seller of conventional mortgage
         loans for Fannie Mae or Freddie Mac and is a mortgagee approved by the
         Secretary of Housing and Urban Development pursuant to sections 203 and
         211 of the National Housing Act.

                  (v) No litigation is pending or, to the best of the Seller's
         knowledge, threatened, against the Seller that would materially and
         adversely affect the execution, delivery or enforceability of this
         Agreement or the ability of the Seller to sell the Mortgage Loans or to
         perform any of its other obligations under this Agreement in accordance
         with the terms hereof.

                  (vi) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Seller of, or compliance by the Seller with,
         this Agreement or the consummation of the transactions contemplated
         hereby, or if any such consent, approval, authorization or order is
         required, the Seller has obtained the same.

                                      -50-
<PAGE>

                  (vii) The representations and warranties set forth in Section
         8 of the Mortgage Loan Purchase Agreement are true and correct as of
         the Closing Date.

                  (viii) No Mortgage Loan is subject to the Home Ownership and
         Equity Protection Act of 1994 or any comparable law and no Mortgage
         Loan is classified and/or defined as a "high cost", "covered", "high
         risk home" or "predatory" loan under any other state, federal or local
         law or regulation or ordinance (or a similarly classified loan using
         different terminology under a law imposing heightened regulatory
         scrutiny or additional legal liability for residential mortgage loans
         having high interest rates, points and/or fees).

                  (ix) No loan is a High Cost Loan or Covered Loan, as
         applicable (as such terms are defined in Appendix E of the Standard &
         Poor's Glossary For File Format For LEVELS(R) Version 5.6 Revised
         (attached hereto as Exhibit N.) and no Mortgage Loan originated on or
         after October 1, 2002 through March 6, 2003 is governed by the Georgia
         Fair Lending Act.

                  (x) Any and all requirements of any federal, state or local
         law including, without limitation, usury, truth in lending, real estate
         settlement procedures, consumer credit protection, equal credit
         opportunity, fair housing, predatory, abusive lending or disclosure
         laws applicable to the origination and servicing of the Mortgage Loans
         have been complied with in all material respects.

         (c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(b)(viii), (ix) and (x) and
Section 8 of the Mortgage Loan Purchase Agreement that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, the party
discovering such breach shall give prompt written notice thereof to the other
parties. The Seller hereby covenants with respect to the representations and
warranties set forth in Section 2.03(b)(viii), (ix) and (x) and Section 8 of the
Mortgage Loan Purchase Agreement, that within ninety (90) days of the discovery
of a breach of any representation or warranty set forth therein that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, it shall cure such breach in all material respects and, if such breach is
not so cured, (i) prior to the second anniversary of the Closing Date, remove
such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute in its place a Replacement Mortgage Loan, in the manner and subject
to the conditions set forth in this Section; or (ii) repurchase the affected
Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price in the
manner set forth below; provided that any such substitution pursuant to (i)
above or repurchase pursuant to (ii) above shall not be effected prior to the
delivery to the Trustee of an Opinion of Counsel if required by Section 2.05 and
any such substitution pursuant to (i) above shall not be effected prior to the
additional delivery to the Trustee of a Request for Release. The Seller shall
promptly reimburse the Trustee for any expenses reasonably incurred by the
Trustee in respect of enforcing the remedies for such breach. To enable the
Servicer to amend the Mortgage Loan Schedule, the Seller shall, unless it cures
such breach in a timely fashion pursuant to this Section 2.03, promptly notify
the Trustee whether it intends either to repurchase, or to substitute for, the
Mortgage Loan affected by such breach. With respect to the representations and
warranties in Section 8 of the Mortgage Loan Purchase Agreement that are made to
the best of the Seller's knowledge, if it is discovered by any of the Depositor,
the Seller


                                      -51-
<PAGE>

or the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation or warranty, the Seller shall
nevertheless be required to cure, substitute for or repurchase the affected
Mortgage Loan in accordance with the foregoing.

         With respect to any Replacement Mortgage Loan or Loans, the Seller
shall deliver to the Trustee for the benefit of the related Certificateholders
such documents and agreements as are required by Section 2.01. No substitution
will be made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Replacement Mortgage Loans in the Due
Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
Seller. For the month of substitution, distributions to Certificateholders will
include the Scheduled Payment due on any Deleted Mortgage Loan for the related
Due Period and thereafter the Seller shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan. The Servicer shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the
removal of such Deleted Mortgage Loan and the substitution of the Replacement
Mortgage Loan or Loans and shall deliver the amended Mortgage Loan Schedule to
the Trustee. Upon such substitution, the Replacement Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the Seller
shall be deemed to have made with respect to such Replacement Mortgage Loan or
Loans, as of the date of substitution, the representations and warranties set
forth in Section 8 of the Mortgage Loan Purchase Agreement with respect to such
Mortgage Loan. Upon any such substitution and the deposit into the Distribution
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph and receipt by the Trustee
of a Request for Release for such Mortgage Loan, the Trustee shall release to
the Seller the Mortgage File relating to such Deleted Mortgage Loan and held for
the benefit of the related Certificateholders and shall execute and deliver at
the Seller's direction such instruments of transfer or assignment as have been
prepared by the Seller, in each case without recourse, as shall be necessary to
vest in the Seller, or its respective designee, title to the Trustee's interest
in any Deleted Mortgage Loan substituted for pursuant to this Section 2.03. The
Trustee shall not have any further responsibility with regard to such Mortgage
File.

         For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for a Deleted Mortgage Loan, the Trustee will determine the
amount (if any) by which the aggregate principal balance of all the Replacement
Mortgage Loans as of the date of substitution is less than the Stated Principal
Balance (after application of the principal portion of the Scheduled Payment due
in the month of substitution) of such Deleted Mortgage Loan. An amount equal to
the aggregate of such deficiencies, described in the preceding sentence for any
Distribution Date (such amount, the "Substitution Adjustment Amount") shall be
remitted to the Servicer for deposit in the Custodial Account, by the Seller
delivering such Replacement Mortgage Loan on or before the Determination Date
for the Distribution Date relating to the Prepayment Period during which the
related Mortgage Loan was required to be purchased or replaced hereunder.

         In the event that the Seller shall be required to repurchase a Mortgage
Loan, the Purchase Price therefor shall be remitted to the Servicer for deposit
in the Custodial Account, on or before


                                      -52-
<PAGE>

the Determination Date immediately following the date on which the Seller was
required to repurchase such Mortgage Loan. The Purchase Price shall be remitted
by the Servicer to the Trustee on the Remittance Date occurring in the month
immediately following the month in which the Purchase Price was deposited in the
Custodial Account. In addition, upon such deposit of the Purchase Price, the
delivery of an Officer's Certificate by the Servicer to the Trustee certifying
that the Purchase Price has been deposited in the Custodial Account, the
delivery of an Opinion of Counsel if required by Section 2.05 and the receipt of
a Request for Release, the Trustee shall release the related Mortgage File held
for the benefit of the related Certificateholders to the Seller, and the Trustee
shall execute and deliver at such Person's direction the related instruments of
transfer or assignment prepared by the Seller, in each case without recourse, as
shall be necessary to transfer title from the Trustee for the benefit of the
Certificateholders and transfer the Trustee's interest to the Seller to any
Mortgage Loan purchased pursuant to this Section 2.03. It is understood and
agreed that the obligation under this Agreement of the Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedies against the Seller respecting such
breach available to Certificateholders, the Depositor or the Trustee.

         (d) The representations and warranties set forth in Section 2.03 shall
survive delivery of the respective Mortgage Loans and Mortgage Files to the
Trustee or the Custodian for the benefit of the Certificateholders.

         Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

         The Depositor hereby represents and warrants to, and covenants, with
the Servicer, the Seller and the Trustee as follows, as of the date hereof and
as of the Closing Date:

                  (i) The Depositor is duly organized and is validly existing as
         a corporation in good standing under the laws of the State of Delaware
         and has full power and authority (corporate and other) necessary to own
         or hold its properties and to conduct its business as now conducted by
         it and to enter into and perform its obligations under this Agreement.

                  (ii) The Depositor has the full corporate power and authority
         to execute, deliver and perform, and to enter into and consummate the
         transactions contemplated by, this Agreement and has duly authorized,
         by all necessary corporate action on its part, the execution, delivery
         and performance of this Agreement; and this Agreement, assuming the due
         authorization, execution and delivery hereof by the other parties
         hereto, constitutes a legal, valid and binding obligation of the
         Depositor, enforceable against the Depositor in accordance with its
         terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
         moratorium receivership and other similar laws relating to creditors'
         rights generally and (ii) the remedy of specific performance and
         injunctive and other forms of equitable relief may be subject to
         equitable defenses and to the discretion of the court before which any
         proceeding therefor may be brought and further subject to public policy
         with respect to indemnity and contribution under applicable securities
         law.

                  (iii) The execution and delivery of this Agreement by the
         Depositor, the consummation of the transactions contemplated by this
         Agreement, and the fulfillment of


                                      -53-
<PAGE>

         or compliance with the terms hereof are in the ordinary course of
         business of the Depositor and will not (A) result in a material breach
         of any term or provision of the charter or by-laws of the Depositor or
         (B) materially conflict with, result in a material breach, violation or
         acceleration of, or result in a material default under, the terms of
         any other material agreement or instrument to which the Depositor is a
         party or by which it may be bound or (C) constitute a material
         violation of any statute, order or regulation applicable to the
         Depositor of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over the Depositor; and the
         Depositor is not in breach or violation of any material indenture or
         other material agreement or instrument, or in violation of any statute,
         order or regulation of any court, regulatory body, administrative
         agency or governmental body having jurisdiction over it which breach or
         violation may materially impair the Depositor's ability to perform or
         meet any of its obligations under this Agreement.

                  (iv) No litigation is pending, or, to the best of the
         Depositor's knowledge, threatened, against the Depositor that would
         materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of the Depositor to
         perform its obligations under this Agreement in accordance with the
         terms hereof.

                  (v) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Depositor of, or compliance by the Depositor
         with, this Agreement or the consummation of the transactions
         contemplated hereby, or if any such consent, approval, authorization or
         order is required, the Depositor has obtained the same.

         The Depositor hereby represents and warrants to the Trustee as of the
Closing Date, following the transfer of the Mortgage Loans to it by the Seller,
the Depositor had good title to the Mortgage Loans and the related Mortgage
Notes were subject to no offsets, claims, defenses or counterclaims.

         It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee or the Custodian for the benefit of the Certificateholders. Upon
discovery by the Depositor, the Servicer or the Trustee of a breach of such
representations and warranties, the party discovering such breach shall give
prompt written notice to the others and to each Rating Agency.

         Section 2.05  DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
                       SUBSTITUTIONS AND REPURCHASES.

         (a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Seller delivers to the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of REMIC I or REMIC II or contributions after the Closing Date, as defined in
sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause any
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding. Any Mortgage Loan as to which repurchase or


                                      -54-
<PAGE>

substitution was delayed pursuant to this paragraph shall be repurchased or the
substitution therefor shall occur (subject to compliance with Sections 2.02 or
2.03) upon the earlier of (a) the occurrence of a default or imminent default
with respect to such Mortgage Loan and (b) receipt by the Trustee of an Opinion
of Counsel to the effect that such repurchase or substitution, as applicable,
will not result in the events described in clause (i) or clause (ii) of the
preceding sentence.

         (b) Upon discovery by the Depositor or the Seller that any Mortgage
Loan does not constitute a "qualified mortgage" within the meaning of section
860G(a)(3) of the Code, the party discovering such fact shall promptly (and in
any event within 5 Business Days of discovery) give written notice thereof to
the other parties and the Trustee. In connection therewith, the Seller, at the
its option, shall either (i) substitute, if the conditions in Section 2.03(c)
with respect to substitutions are satisfied, a Replacement Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90
days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Section 2.03. The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty contained in Section
2.03.

         Section 2.06  ISSUANCE OF THE REMIC I REGULAR INTERESTS AND THE CLASS R
                       CERTIFICATES.

         The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to the Custodian on its behalf of the related Mortgage Files,
subject to the provisions of Section 2.01 and Section 2.02, together with the
assignment to it of all other assets included in REMIC I, the receipt of which
is hereby acknowledged. The interests evidenced by the Class R-I Interest,
together with the REMIC I Regular Interests, constitute the entire beneficial
ownership interest in REMIC I. The rights of the Holders of the Class R-I
Interest and REMIC I (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I Interest
and the REMIC I Regular Interests, respectively, and all ownership interests
evidenced or constituted by the Class R-I Interest and the REMIC I Regular
Interests, shall be as set forth in this Agreement.

         Section 2.07 CONVEYANCE OF THE REMIC I REGULAR INTERESTS .

         The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee,
without recourse all the right, title and interest of the Depositor in and to
the REMIC I Regular Interests for the benefit of the Class R-II Interest and
REMIC II (as holder of the REMIC I Regular Interests). The Trustee acknowledges
receipt of the REMIC I Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of all present and
future Holders of the Class R-II Interest and REMIC II (as holder of the REMIC I
Regular Interests). The rights of the Holder of the Class R-II Interest and
REMIC II (as holder of the REMIC I Regular Interests) to receive distributions
from the proceeds of REMIC II in respect of the Class R-II Interest and Regular
Certificates, respectively, and all ownership interests evidenced or constituted
by the Class R-II Interest and the Regular Certificates, shall be as set forth
in this Agreement. The Class R-II Interest and the Regular Certificates shall
constitute the entire beneficial ownership interest in REMIC II.



                                      -55-
<PAGE>

         Section 2.08 ISSUANCE OF RESIDUAL CERTIFICATES.

         The Trustee acknowledges the assignment to it of the REMIC I Regular
Interests and, concurrently therewith and in exchange therefor, pursuant to the
written request of the Depositor executed by an officer of the Depositor, the
Trustee has executed, authenticated and delivered to or upon the order of the
Depositor, the Class R Certificates in authorized denominations.

         Section 2.09 ESTABLISHMENT OF TRUST.

         The Depositor does hereby establish, pursuant to the further provisions
of this Agreement and the laws of the State of New York, an express trust to be
known, for convenience, as "Nomura Asset Acceptance Corporation, Alternative
Loan Trust, Series 2005-AR1" and does hereby appoint JPMorgan Chase Bank, N.A.,
as Trustee in accordance with the provisions of this Agreement.



                                      -56-
<PAGE>

                                  ARTICLE III

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

         Section 3.01 THE SERVICER TO ACT AS SERVICER.

         The Servicer shall service and administer the Mortgage Loans on behalf
of the Trust and in the best interest of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the Mortgage Loans and to the
extent consistent with such terms and in accordance with and exercising the same
care in performing those practices that the Servicer customarily employs and
exercises in servicing and administering mortgage loans for its own account
(including, compliance with all applicable federal, state and local laws).

         To the extent consistent with the foregoing, the Servicer shall seek
the timely and complete recovery of principal and interest on the Mortgage Notes
related to the Mortgage Loans and shall waive a Prepayment Charge only under the
following circumstances: (i) such waiver is standard and customary in servicing
similar mortgage loans and (ii) either (A) such waiver is related to a default
or reasonably foreseeable default and would, in the reasonable judgment of the
Servicer, maximize recovery of total proceeds taking into account the value of
such Prepayment Charge and the related Mortgage Loan and, if such waiver is made
in connection with a refinancing of the related Mortgage Loan, such refinancing
is related to a default or a reasonably foreseeable default or (B) such waiver
is made in connection with a refinancing of the related Mortgage Loan unrelated
to a default or a reasonably foreseeable default where (x) the related Mortgagor
has stated to the Servicer an intention to refinance the related Mortgage Loan
and (y) the Servicer has concluded in its reasonable judgment that the waiver of
such Prepayment Charge would induce such Mortgagor to refinance with the
Servicer or (iii) the Servicer reasonably believes such Prepayment Charge is
unenforceable in accordance with applicable law or the collection of such
related Prepayment Charge would otherwise violate applicable law. If a
Prepayment Charge is waived as permitted by meeting both of the standards
described in clauses (i) and (ii)(B) above, then the Servicer is required to pay
the amount of such waived Prepayment Charge (the "Servicer Prepayment Charge
Payment Amount"), for the benefit of the Holders of the Class P Certificates, by
depositing such amount into the Custodial Account within 90 days of notice or
discovery of such waiver meeting the standard set forth in both clauses (i) and
(ii)(B) above; provided, however, that the Servicer shall not waive more than 5%
of the Prepayment Charges (by number of Prepayment Charges) set forth on the
Prepayment Charge Schedule in accordance with clauses (i) and (ii)(B) above.
Notwithstanding any other provisions of this Agreement, any payments made by the
Servicer in respect of any waived Prepayment Charges pursuant to clauses (i) and
(ii)(B) above and the preceding sentence shall be deemed to be paid outside of
the Trust Fund.

         Subject only to the above-described applicable servicing standards (the
"Accepted Servicing Practices") and the terms of this Agreement and of the
respective Mortgage Loans, the Servicer shall have full power and authority,
acting alone and/or through subservicers as provided in Section 3.03, to do or
cause to be done any and all things that it may deem necessary or desirable in
connection with such servicing and administration, including but not limited to,
the power and authority, subject to the terms hereof (i) to execute and deliver,
on behalf of the


                                      -57-
<PAGE>

Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any related Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance Proceeds and
other Liquidation Proceeds, and (iv) subject to Section 3.09, to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan.

         Without limiting the generality of the foregoing, the Servicer, in its
own name or in the name of the Trust, the Depositor or the Trustee, is hereby
authorized and empowered by the Trust, the Depositor and the Trustee, when the
Servicer believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with respect
to the Mortgage Loans, and with respect to the related Mortgaged Properties held
for the benefit of the Certificateholders. The Servicer shall prepare and
deliver to the Depositor and/or the Trustee such documents requiring execution
and delivery by any or all of them as are necessary or appropriate to enable the
Servicer to service and administer the Mortgage Loans. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Servicer. In addition, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer any special or
limited powers of attorney agreeable to the Trustee and its counsel for each
county in which a Mortgaged Property is located and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder, provided such limited powers of attorney or other documents
shall be prepared by the Servicer and submitted to the Trustee for review prior
to execution.

         In accordance with the standards of the first paragraph of this Section
3.01, the Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties relating to the Mortgage Loans in order to preserve the lien on the
Mortgaged Property, which advances shall be reimbursable in the first instance
from related collections from the Mortgagors pursuant to Section 4.04, and
further as provided in Section 4.02. All costs incurred by the Servicer, if any,
in effecting the payments of such taxes and assessments on the related Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.

         Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.

         (a) Except as otherwise provided in this Section 3.02, when any
Mortgaged Property has been or is about to be conveyed by the Mortgagor, the
Servicer shall to the extent that it has knowledge of such conveyance, enforce
any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the Servicer
shall not be required to exercise such rights with respect to a Mortgage Loan if
the Person to whom the related Mortgaged Property has been conveyed or is
proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the


                                      -58-
<PAGE>

mortgagee under such Mortgage Note or Mortgage is not otherwise so required
under such Mortgage Note or Mortgage as a condition to such transfer. In the
event that the Servicer is prohibited by law from enforcing any such due-on-sale
clause, or if coverage under any Required Insurance Policy would be adversely
affected, or if nonenforcement is otherwise permitted hereunder, the Servicer is
authorized, subject to Section 3.02(b), to take or enter into an assumption and
modification agreement from or with the person to whom such property has been or
is about to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon, provided that the related Mortgage Loan shall continue
to be covered (if so covered before the Servicer enters such agreement) by the
applicable Required Insurance Policies. The Servicer, subject to Section
3.02(b), is also authorized with the prior approval of the insurers under any
Required Insurance Policies to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be
deemed to be in default under this Section 3.02(a) by reason of any transfer or
assumption that the Servicer reasonably believes it is restricted by law from
preventing.

         (b) Subject to the Servicer's duty to enforce any due-on-sale clause to
the extent set forth in Section 3.02(a), in any case in which a related
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the related Mortgage Loan, the Servicer shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Index, Gross Margin, Periodic Rate Cap, Adjustment Date, Maximum
Mortgage Interest Rate or Minimum Mortgage Interest Rate and any other term
affecting the amount or timing of payment on the related Mortgage Loan) may be
changed. In addition, the substitute Mortgagor and the Mortgaged Property must
be acceptable to the Servicer in accordance with the servicing standard set
forth in Section 3.01. The Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation.

         Section 3.03 SUBSERVICERS.

         The Servicer shall perform all of its servicing responsibilities
hereunder or may cause a subservicer to perform any such servicing
responsibilities on its behalf, but the use by the


                                      -59-
<PAGE>

Servicer of a subservicer shall not release the Servicer from any of its
obligations hereunder with respect to the related Mortgage Loans. The Servicer
shall pay all fees of each of its subservicers from its own funds, and a
subservicer's fee shall not exceed the Servicing Fee payable to the Servicer
hereunder.

         At the cost and expense of the Servicer, without any right of
reimbursement from the Custodial Account, the Servicer shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange for any
servicing responsibilities to be performed by a successor subservicer; provided,
however, that nothing contained herein shall be deemed to prevent or prohibit
the Servicer, at its option, from electing to service the related Mortgage Loans
itself. In the event that the Servicer's responsibilities and duties under this
Agreement are terminated pursuant to Section 8.03, the Servicer shall at its own
cost and expense terminate the rights and responsibilities of each subservicer
with respect to the Mortgage Loans effective as of the date of the Servicer's
termination. The Servicer shall pay all fees, expenses or penalties necessary in
order to terminate the rights and responsibilities of each subservicer from the
Servicer's own funds without reimbursement from the Trust Fund.

         Notwithstanding the foregoing, the Servicer shall not be relieved of
its obligations hereunder with respect to the Mortgage Loans and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into an agreement with a subservicer for indemnification of
the Servicer by the subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.

         Any subservicing agreement and any other transactions or services
relating to the Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and the Servicer alone, and the Trustee shall not have
any obligations, duties or liabilities with respect to such subservicer
including any obligation, duty or liability of the Trustee to pay such
subservicer's fees and expenses or any differential in the amount of the
servicing fee paid hereunder and the amount necessary to induce any successor
servicer to act as successor servicer under this Agreement and the transactions
provided for in this Agreement. For purposes of remittances to the Trustee
pursuant to this Agreement, the Servicer shall be deemed to have received a
payment on a Mortgage Loan when a subservicer has received such payment.

         Section 3.04  DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE
                       SERVICER TO BE HELD FOR TRUSTEE.

         Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee as required by this Agreement all documents and
instruments in respect of a related Mortgage Loan coming into the possession of
the Servicer from time to time and shall account fully to the Trustee for any
funds received by the Servicer or that otherwise are collected by the Servicer
as Liquidation Proceeds or Insurance Proceeds in respect of any such Mortgage
Loan. All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including but
not limited to, any funds on deposit in the Custodial Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions of
this


                                      -60-
<PAGE>

Agreement. The Servicer also agrees that it shall not create, incur or subject
any Mortgage File or any funds that are deposited in the Custodial Account, the
Distribution Account or in any Escrow Account, or any funds that otherwise are
or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to the Servicer under this Agreement.

         Section 3.05 MAINTENANCE OF HAZARD INSURANCE.

         (a) The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance with extended coverage on the Mortgaged Property in an amount
which is at least equal to the lesser of (i) the Stated Principal Balance of
such Mortgage Loan and (ii) the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to be maintained
hazard insurance with extended coverage on each REO Property in an amount which
is at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such REO Property and (ii) the Stated Principal
Balance of the related Mortgage Loan at the time it became an REO Property. The
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under any such hazard policies. Any
amounts collected by the Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or amounts to be released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing loans held for its own
account, subject to the terms and conditions of the related Mortgage and
Mortgage Note and in accordance with the servicing standard set forth in Section
3.01) shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.02. Any cost incurred by the Servicer in maintaining any
such insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the Stated Principal Balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the Servicer shall cause to be maintained a flood insurance
policy in respect thereof. Such flood insurance shall be in an amount equal to
the lesser of (i) the Stated Principal Balance of the related Mortgage Loan and
(ii) the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program).

         In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of B:VI or better in
Best's Key Rating Guide (or such other rating that is comparable to such rating)
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two


                                      -61-
<PAGE>

sentences of this Section 3.05, it being understood and agreed that such policy
may contain a deductible clause, in which case the Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property or
REO Property a policy complying with the first two sentences of this Section
3.05, and there shall have been one or more losses which would have been covered
by such policy, deposit to the Custodial Account from its own funds the amount
not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.

         (b) The Servicer shall keep in force during the term of this Agreement
a policy or policies of insurance covering errors and omissions for failure in
the performance of the Servicer's obligations under this Agreement, which policy
or policies shall be in such form and amount that would meet the requirements of
Fannie Mae or Freddie Mac if it were the purchaser of the related Mortgage
Loans, unless the Servicer has obtained a waiver of such requirements from
Fannie Mae or Freddie Mac. The Servicer shall provide the Trustee, upon request,
with copies of such insurance policies and fidelity bond. The Servicer shall
also maintain a fidelity bond in the form and amount that would meet the
requirements of Fannie Mae or Freddie Mac, unless the Servicer has obtained a
waiver of such requirements from Fannie Mae or Freddie Mac. The Servicer shall
be deemed to have complied with this provision if an Affiliate of the Servicer
has such errors and omissions and fidelity bond coverage and, by the terms of
such insurance policy or fidelity bond, the coverage afforded thereunder extends
to the Servicer. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable without thirty days' prior written notice to the
Trustee. The Servicer shall also cause its subservicers to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.

         Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.

         The Servicer shall prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such Insurance
Policies. Any proceeds disbursed to the Servicer in respect of such Insurance
Policies shall, within two Business Days of its receipt, be deposited in the
Custodial Account upon receipt, except that any amounts realized that are to be
applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable Insurance Policy need not be so deposited
(or remitted).

         Section 3.07 MAINTENANCE OF INSURANCE POLICIES.

         The Servicer shall not take any action that would result in noncoverage
under any applicable Insurance Policy of any loss which, but for the actions of
the Servicer would have been covered thereunder. The Servicer shall use its best
efforts to keep in force and effect (to the extent that the related Mortgage
Loan requires the Mortgagor to maintain such insurance), any applicable
Insurance Policy. The Servicer shall not cancel or refuse to renew any Insurance



                                      -62-
<PAGE>

Policy that is in effect at the date of the initial issuance of the Mortgage
Note and is required to be kept in force hereunder.

         Section 3.08 RESERVED.

         Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION
                      OF EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES;
                      REPURCHASES OF CERTAIN MORTGAGE LOANS.

         (a) The Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided that
the Servicer shall not be required to expend its own funds in connection with
any foreclosure or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 4.02). If
the Servicer reasonably believes that Liquidation Proceeds with respect to any
such Mortgage Loan would not be increased as a result of such foreclosure or
other action, such Mortgage Loan will be charged-off and will become a
Liquidated Loan. The Servicer will give notice of any such charge-off to the
Trustee. The Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided that such costs and expenses
shall be Servicing Advances and that it shall be entitled to reimbursement
thereof from the proceeds of liquidation of the related Mortgaged Property, as
contemplated in Section 4.02. If the Servicer has knowledge that a Mortgaged
Property that the Servicer is contemplating acquiring in foreclosure or by
deed-in-lieu of foreclosure is located within a one-mile radius of any site with
environmental or hazardous waste risks known to the Servicer, the Servicer
shall, prior to acquiring the Mortgaged Property, consider such risks and only
take action in accordance with its established environmental review procedures.

         With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders). The Trustee's
name shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The Servicer shall ensure that the
title to such REO Property references this Agreement and the Trustee's capacity
hereunder. Pursuant to its efforts to sell such REO Property, the Servicer shall
either itself or through an agent selected by the Servicer protect and conserve
such REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent the
same, or any part thereof, as the Servicer deems to be in the best interest of
the Servicer and the Certificateholders for the period prior to the sale of such
REO Property. The Servicer shall prepare for and deliver to the Trustee a
statement with respect to each REO Property that has been rented showing the
aggregate rental income received and all expenses incurred in


                                      -63-
<PAGE>

connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Custodial Account no later than
the close of business on each Determination Date. The Servicer shall perform the
tax reporting and withholding related to foreclosures, abandonments and
cancellation of indebtedness income as specified by Sections 6050H, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.

         In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
three years after its acquisition by the Trust Fund or, at the expense of the
Trust Fund, request from the Internal Revenue Service more than 60 days prior to
the day on which such three-year period would otherwise expire, an extension of
the three-year grace period. The Trustee shall be supplied with an Opinion of
Counsel (such opinion not to be an expense of the Trustee or the Trust Fund) to
the effect that the holding by the Trust Fund of such Mortgaged Property
subsequent to such three-year period will not result in the imposition of taxes
on "prohibited transactions" of any REMIC as defined in section 860F of the Code
or cause any REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel). Notwithstanding any other provision of this Agreement, no Mortgaged
Property acquired by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise used for the production of income by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject any REMIC to the
imposition of any federal, state or local income taxes on the income earned from
such Mortgaged Property under section 860G(c) of the Code or otherwise, unless
the Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.

         The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in the Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Custodial Account. To the extent the income received
during a Prepayment Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.

         The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Servicer as provided above, shall be deposited in the
Custodial Account on the next


                                      -64-
<PAGE>

succeeding Determination Date following receipt thereof for distribution on the
related Distribution Date, except that any Excess Liquidation Proceeds shall be
retained by the Servicer as additional servicing compensation.

         The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, shall be applied in the following order of priority: first, to
reimburse the Servicer for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 4.02 or this Section 3.09; second, to
reimburse the Servicer for any unreimbursed Advances, pursuant to Section 4.02
or this Section 3.09; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the Mortgage Loan.

         (b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Liquidation Proceeds and Realized Losses,
if any, with respect to any Mortgage Loan for the related Prepayment Period.

         (c) The Servicer has no intent to foreclose on any Mortgage Loan based
on the delinquency characteristics as of the Closing Date; provided, however,
that the foregoing does not prevent the Servicer from initiating foreclosure
proceedings on any date hereafter if the facts and circumstances of such
Mortgage Loans including delinquency characteristics in the Servicer's
discretion so warrant such action.

         Section 3.10 SERVICING COMPENSATION.

         As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Custodial Account out of each payment of
interest on each Mortgage Loan included in the Trust Fund an amount equal to the
Servicing Fee. In addition, the Servicer shall be entitled to recover unpaid
Servicing Fees out of Liquidation Proceeds, Insurance Proceeds or condemnation
proceeds to the extent permitted by Section 4.02.

         Additional servicing compensation with respect to Mortgage Loans in the
form of any Excess Liquidation Proceeds, assumption fees, late payment charges,
insufficient funds charges and ancillary income to the extent such fees or
charges are received by the Servicer, all income and gain net of any losses
realized from Permitted Investments with respect to funds in or credited to the
Custodial Account shall be retained by the Servicer to the extent not required
to be deposited in the Custodial Account pursuant to Section 4.02. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.05 and maintenance of the other forms of
insurance coverage required by Section 3.07) and shall not be entitled to
reimbursement therefor except as specifically provided in Section 4.02.

         Section 3.11 REO PROPERTY.

         (a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Servicer shall sell any REO Property


                                      -65-
<PAGE>

as expeditiously as possible and in accordance with the provisions of this
Agreement. Pursuant to its efforts to sell such REO Property, the Servicer shall
protect and conserve such REO Property in the manner and to the extent required
herein, in accordance with the REMIC Provisions.

         (b) The Servicer shall deposit all funds collected and received in
connection with the operation of any REO Property into the Custodial Account.

         (c) The Servicer, upon the final disposition of any REO Property, shall
be entitled to reimbursement for any related unreimbursed Advances, unreimbursed
Servicing Advances or Servicing Fees from Liquidation Proceeds received in
connection with the final disposition of such REO Property; provided, that any
such unreimbursed Advances or Servicing Fees as well as any unpaid Servicing
Fees may be reimbursed or paid, as the case may be, prior to final disposition,
out of any net rental income or other net amounts derived from such REO
Property.

         Section 3.12 LIQUIDATION REPORTS.

         Upon the foreclosure of any Mortgaged Property or the acquisition
thereof by the Trust Fund pursuant to a deed-in-lieu of foreclosure, the
Servicer shall submit a liquidation report to the Trustee containing such
information as shall be mutually acceptable to the Servicer and the Trustee with
respect to such Mortgaged Property.

         Section 3.13 ANNUAL CERTIFICATE AS TO COMPLIANCE.

         (a) The Servicer shall deliver to the Depositor and the Trustee not
later than March 15th of each year commencing in 2006 (or, in each case, if such
day is not a Business Day, the immediately preceding Business Day), a
certificate of a Authorized Servicer Representative stating, as to each
signatory thereof, that (i) a review of the activities of the Servicer during
the preceding calendar year and of performance under this Agreement has been
made under such officers' supervision, and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officers and the nature and status thereof except for such
defaults as such officer in its good faith judgment believes to be immaterial.

         (b) (i) The Servicer shall deliver to the Depositor and the Trustee, on
or before March 15th of each year commencing in 2006, a certification containing
the information set forth in Exhibit L. Such certification shall be signed by
the senior officer in charge of servicing of the Servicer. In addition, the
Servicer shall provide such other information with respect to the related
Mortgage Loans and the servicing and administration thereof within the control
of the Servicer which shall be required to enable the Depositor and the Trustee
to comply with the reporting requirements of the Securities and Exchange Act of
1934, as amended (the "Exchange Act").

                  (ii) The Servicer shall indemnify and hold harmless the
         Depositor, the Trustee and their respective officers, directors, agents
         and affiliates from and against any losses, damages, penalties, fines,
         forfeitures, reasonable legal fees and related costs, judgments and
         other costs and expenses to the extent arising out of or based upon a
         breach by the Servicer or any of its officers, directors, agents or
         affiliates of its obligations under this



                                      -66-
<PAGE>

         Section 3.13(b), or a breach in any of the representations in the
         certification delivered pursuant to clause (b)(i) above, or the
         Servicer's gross negligence, bad faith or willful misconduct in
         connection therewith. If the indemnification provided for herein is
         unavailable to the Depositor and the Trustee as a result of a court of
         law or other administrative or regulatory body with authority holding
         such indemnification void on the basis of public policy or similar
         reason, then the Servicer agrees that it shall contribute to the amount
         paid or payable by the Depositor and the Trustee as a result of the
         losses, claims, damages or liabilities of the Depositor or the Trustee
         in such proportion as is appropriate to reflect the relative fault of
         the Trustee or the Depositor on the one hand and the Servicer on the
         other in connection with a breach of the Servicer's obligations under
         this Section 3.13(b) or the Servicer's gross negligence, bad faith or
         willful misconduct in connection therewith or a breach of any of the
         representations in the certification delivered pursuant to clause
         (b)(i) above with respect to the matters covered by this Section
         3.13(b)(ii).

         Section 3.14 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' SERVICING
                      REPORT.

         Not later than March 15th of each year, commencing in 2006, the
Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Servicer a report
stating that (i) it has obtained a letter of representation regarding certain
matters from the management of the Servicer which includes an assertion that the
Servicer has complied with certain minimum residential mortgage loan servicing
standards, identified in the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America, with respect
to the servicing of residential mortgage loans during the most recently
completed fiscal or calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
subservicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those subservicers. Promptly upon receipt of such report, the Servicer shall
furnish a copy of such report to the Depositor, the Trustee and each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided that such
statement is delivered by the Servicer to the Trustee.

         Section 3.15 BOOKS AND RECORDS.

         The Servicer shall be responsible for maintaining, and shall maintain,
a complete set of books and records for the related Mortgage Loans which shall
be appropriately identified in the Servicer's computer system to clearly reflect
the ownership of the related Mortgage Loans by the Trust. In particular, the
Servicer shall maintain in its possession, available for inspection by the
Trustee and shall deliver to the Trustee upon reasonable prior request and
during normal business hours, evidence of compliance with all federal, state and
local laws, rules and regulations. To the extent that original documents are not
required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Servicer may be in the form of



                                      -67-
<PAGE>

microfilm or microfiche or such other reliable means of recreating original
documents, including, but not limited to, optical imagery techniques so long as
the Servicer complies with the requirements of Accepted Servicing Practices.

         The Servicer shall maintain with respect to each related Mortgage Loan
and shall upon reasonable prior request and during normal business hours make
available for inspection by the Trustee the related servicing file during the
time such Mortgage Loan is subject to this Agreement and thereafter in
accordance with applicable law.

         Section 3.16 THE TRUSTEE.

         The Trustee shall furnish the Servicer with any powers of attorney and
other documents in form as mutually agreed upon and necessary or appropriate to
enable the Servicer to service and administer the Mortgage Loans and REO
Properties.

         The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.

         The Trustee shall execute and deliver as directed in writing by the
Servicer any court pleadings, requests for trustee's sale or other documents
necessary or desirable to (i) the foreclosure or trustee's sale with respect to
a Mortgaged Property; (ii) any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note or Security Instrument; (iii) obtain a
deficiency judgment against the Mortgagor; or (iv) enforce any other rights or
remedies provided by the Mortgage Note or Security Instrument or otherwise
available at law or equity.

         Section 3.17 REMIC-RELATED COVENANTS.

         For as long as each REMIC shall exist, the Trustee shall act in
accordance herewith to assure continuing treatment of such REMIC as a REMIC, and
the Trustee shall comply with any directions of the Seller or the Servicer to
assure such continuing treatment. In particular, the Trustee shall not (a)
knowingly sell or permit the sale of all or any portion of the Mortgage Loans or
of any investment of deposits in an Account unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has
received a REMIC Opinion prepared at the expense of the Trust Fund; and (b)
other than with respect to a substitution pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a REMIC
Opinion.



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<PAGE>

         Section 3.18 REIMBURSEMENT OF COSTS AND EXPENSES.

         (a) To the extent that the costs and expenses of the Trustee related to
any termination of the Servicer, appointment of a Successor Servicer or the
transfer and assumption of servicing by the Trustee with respect to this
Agreement (including, without limitation, (i) all legal costs and expenses and
all due diligence costs and expenses associated with an evaluation of the
potential termination of the Servicer as a result of an event of default by such
Person and (ii) all costs and expenses associated with the complete transfer of
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Successor Servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor service to service the
related Mortgage Loans in accordance with this Agreement) are not fully and
timely reimbursed by the Servicer, the Trustee shall be entitled to
reimbursement of such costs and expenses from the Distribution Account.

         (b) If the Trustee acts as a Successor Servicer to the Servicer, it
will not assume liability for the representations and warranties of the Servicer
contained herein.

         Section 3.19 RELEASE OF MORTGAGE FILES.

         (a) Upon becoming aware of the payment in full of any Mortgage Loan, or
the receipt by the Servicer of a notification that payment in full has been
escrowed in a manner customary for such purposes for payment to the related
Certificateholders on the next Distribution Date, the Servicer will promptly
furnish to the Trustee and the Custodian, on behalf of the Trustee, two copies
of a certification substantially in the form of Exhibit H hereto signed by a
Authorized Servicer Representative or in a mutually agreeable electronic format
which will, in lieu of a signature on its face, originate from a Authorized
Servicer Representative (which certification shall include a statement to the
effect that all amounts received in connection with such payment that are
required to be deposited in the Custodial Account pursuant to Article V have
been or will be so deposited) and shall request that the Custodian, on behalf of
the Trustee, deliver to the Servicer the related Mortgage File. Within five (5)
Business Days of receipt of such certification and request, the Custodian, on
behalf of the Trustee, shall release the related Mortgage File to the Servicer
and the Trustee and Custodian shall have no further responsibility with regard
to such Mortgage File. Upon any such payment in full, the Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the related Mortgage Loan, an instrument of satisfaction
(or assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Custodial Account.

         (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with this Agreement, the
Trustee shall execute such documents as shall be prepared and furnished to the
Trustee by the Servicer (in form reasonably acceptable to the Trustee) and as
are necessary to the prosecution of any such proceedings. The Custodian, on
behalf of the Trustee, shall, upon the written request of the Servicer, and
delivery


                                      -69-
<PAGE>

to the Custodian, on behalf of the Trustee, of two copies of a request for
release signed by a Authorized Servicer Representative substantially in the form
of Exhibit H (or in a mutually agreeable electronic format which will, in lieu
of a signature on its face, originate from a Authorized Servicer
Representative), release the related Mortgage File held in its possession or
control to the Servicer. Such request for release shall obligate the Servicer to
return the Mortgage File to the Custodian on behalf of the Trustee, when the
need therefor by such Person no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Authorized
Servicer Representative similar to that hereinabove specified, the Mortgage File
shall be released by the Custodian, on behalf of the Trustee, to the Servicer.

         Section 3.20  DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE
                       SERVICER TO BE HELD FOR TRUSTEE.

(a) The Servicer (to the extent required by this Agreement) shall transmit to
the Trustee or to Custodian such documents and instruments coming into the
possession of such Person from time to time as are required by the terms hereof
to be delivered to the Trustee or the Custodian. Any funds received by the
Servicer in respect of any Mortgage Loan or which otherwise are collected by the
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be held for the benefit of the Trustee and the related
Certificateholders subject to the right of the Servicer to retain its Servicing
Fee and other amounts as provided in this Agreement.

         Section 3.21  POSSESSION OF CERTAIN INSURANCE POLICIES AND DOCUMENTS.

         The Servicer shall retain possession and custody of the originals (to
the extent available) of any Insurance Policies, or certificate of insurance if
applicable, and any certificates of renewal as to the foregoing as may be issued
from time to time as contemplated by this Agreement. Until all amounts
distributable in respect of the Certificates have been distributed in full, the
Trustee (or the Custodian, as directed by the Trustee) shall retain possession
and custody of each Mortgage File in accordance with and subject to the terms
and conditions of this Agreement.

         Section 3.22  ANNUAL CERTIFICATE AS TO COMPLIANCE.

         (a) The Depositor shall prepare and file or caused to be prepared and
filed the initial Form 8-K. Within 15 days after each Distribution Date, the
Trustee shall, in accordance with industry standards, file with the Commission
via the Electronic Data Gathering and Retrieval System ("EDGAR"), a Form 8-K
with a copy of the statement to be furnished by the Trustee to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30, 2006, the Trustee shall, in accordance with industry standards, file
a Form 15 Suspension Notice with respect to the Trust Fund. Prior to March 30,
2006 and annually thereafter, if required, the Trustee shall, subject to
subsection (d) below, file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. Such Form 10K shall be signed by the
Depositor and shall include, to the extent available, as exhibits (i) the
Servicer's annual statement of compliance described under Section 3.13 hereof,
(ii) the Servicer's accountants report described under Section 3.14 and (iii)
the Form 10-K certification signed by the Depositor. If items (i), (ii) and
(iii) in the preceding sentence are not timely delivered, the Trustee shall file
an amended Form 10-K including such documents as exhibits reasonably promptly
after they are


                                      -70-
<PAGE>

delivered to the Trustee. The Depositor hereby grants to the Trustee a limited
power of attorney to execute and file each Form 8-K and the Form 15 on behalf of
the Depositor. Such power of attorney shall continue until either the earlier of
(i) receipt by the Trustee from the Depositor of written termination of such
power of attorney and (ii) the termination of the Trust Fund. The Depositor
agrees to promptly furnish to the Trustee, from time to time upon request, such
further information, reports and financial statements within its control related
to this Agreement and the Mortgage Loans as the Trustee reasonably deems
appropriate to prepare and file a Form 8-K and the Form 15 with the Commission.
The Trustee will reasonably cooperate with the Depositor in connection with any
additional filings with respect to the Trust Fund as the Depositor deems
necessary under the Exchange Act. Copies of all reports filed by the Trustee
under the Exchange Act shall be sent to the Depositor.

         (b) In connection with the filing of any 10-K hereunder, the Trustee
shall sign a certification (in the form attached hereto as Exhibit M) on behalf
of the Depositor regarding certain aspects of the Form 10-K certification signed
by the Depositor, provided, however, that the Trustee shall not be required to
undertake an analysis of any accountant's report attached as an exhibit to the
Form 10-K.

         (c) (i) The Trustee shall indemnify and hold harmless the Depositor and
its officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Trustee's obligations under this Section 3.22 or the Trustee's
negligence, bad faith or willful misconduct in connection therewith.

                  (ii) The Depositor shall indemnify and hold harmless the
         Trustee and its officers, directors and Affiliates from and against any
         losses, damages, penalties, fines, forfeitures, reasonable and
         necessary legal fees and related costs, judgments and other costs and
         expenses arising out of or based upon a breach of the obligations of
         the Depositor under this Section 3.22 or the Depositor's negligence,
         bad faith or willful misconduct in connection therewith.

                  (iii) If the indemnification provided for herein is
         unavailable or insufficient to hold harmless the Depositor or the
         Trustee, as applicable, then the other party, in connection with a
         breach of its respective obligations under this Section 3.22 or its
         respective negligence, bad faith or willful misconduct in connection
         therewith, agrees that it shall contribute to the amount paid or
         payable by the other party as a result of the losses, claims, damages
         or liabilities of the other party in such proportion as is appropriate
         to reflect the relative fault and the relative benefit of the Depositor
         on the one hand and the Trustee on the other.

         (d) Nothing shall be construed from the foregoing subsections (a), (b)
and (c) to require the Trustee or any officer, director or Affiliate thereof to
sign any Form 10-K or any certification contained therein. Furthermore, the
inability of the Trustee to file a Form 10-K as a result of the lack of required
information as set forth in Section 3.22(a) or required signatures on such Form
10-K or any certification contained therein shall not be regarded as a breach by
the Trustee of any obligation under this Agreement.



                                      -71-
<PAGE>

         (e) Notwithstanding the provisions of Section 11.01, this Section 3.22
may be amended without the consent of the Certificateholders.

         Section 3.23 UCC.

         The Seller agrees to execute and file continuation statements for any
Uniform Commercial Code financing statements which were filed in connection with
the Trust. The Seller shall file any financing statements or amendments and
continuation statements thereto required by any change in the Uniform Commercial
Code.

         Section 3.24 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.

         With respect to any Mortgage Loan which is delinquent in payment by 91
days or more or is an REO Property, the Seller shall have the right to purchase
such Mortgage Loan or REO Property from the Trust at a price equal to the
Purchase Price.

         If at any time the Seller remits to the Trustee a payment for deposit
in the Distribution Account covering the amount of the Purchase Price for such a
Mortgage Loan, then the Trustee shall execute the assignment of such Mortgage
Loan at the request of the Seller without recourse to the Seller which shall
succeed to all the Trustee's right, title and interest in and to such Mortgage
Loan, and all security and documents relative thereto. Such assignment shall be
an assignment outright and not for security. The Seller will thereupon own such
Mortgage, and all such security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto. The Seller shall be
responsible for any transfer costs incurred with respect to a Mortgage Loan
purchased pursuant to this Section 3.24.


                                      -72-
<PAGE>


                                   ARTICLE IV

                                    ACCOUNTS

         Section 4.01 COLLECTION OF MORTGAGE LOAN PAYMENTS; CUSTODIAL ACCOUNT.

         (a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the related Mortgage Loans to the extent such procedures shall
be consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge and (ii) extend the due dates
for payments due on a Mortgage Note for a Mortgage Loan for a period not greater
than 180 days; provided, however no such extension shall be materially adverse
to the Certificateholders. In the event of any such arrangement, the Servicer
shall make Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, and shall be entitled to
reimbursement therefor in accordance with Section 5.01. The Servicer shall not
be required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law. In addition, if (x) a Mortgage Loan is in default or default is
imminent or (y) the Servicer delivers to the Trustee a REMIC Opinion, the
Servicer may, (A) amend the related Mortgage Note to reduce the Mortgage Rate
applicable thereto and (B) amend any Mortgage Note for a Mortgage Loan to extend
to the maturity thereof.

         (b) The Servicer shall establish and maintain a segregated Custodial
Account (which shall at all times be an Eligible Account) with a depository
institution in the name of the Servicer for the benefit of the Trustee on behalf
of the Certificateholders and designated "JPMorgan Chase Bank, N.A., as trustee
for registered holders of Nomura Asset Acceptance Corporation, Mortgage
Pass-Through Certificates, Series 2005-AR1". On behalf of the Trust Fund, the
Servicer shall deposit or cause to be deposited in the clearing account in which
it customarily deposits payments and collection on Mortgage Loans in connection
with its mortgage loan servicing activities on a daily basis and in no event
more than one Business Day after the Servicer's receipt thereof, and shall
thereafter deposit in the Custodial Account, in no event more than two Business
Days after the Servicer's receipt thereof, except as otherwise specifically
provided herein, the following payments and collections remitted by subservicers
or received by it in respect of the Mortgage Loans subsequent to the Cut-off
Date (other than in respect of principal and interest due on the related
Mortgage Loans on or before the Cut-off Date) and the following amounts required
to be deposited hereunder:

                  (i) all payments on account of principal, including Principal
         Prepayments and Subsequent Recoveries, on the Mortgage Loans;

                  (ii) all payments on account of interest on the Mortgage Loans
         net of the related Servicing Fee permitted under Section 3.10;



                                      -73-
<PAGE>

                  (iii) all Liquidation Proceeds, Insurance Proceeds and
         condemnation proceeds with respect to the Mortgage Loans, other than
         proceeds to be applied to the restoration or repair of the related
         Mortgaged Properties or released to the Mortgagor in accordance with
         the Servicer's normal servicing procedures;

                  (iv) any amount required to be deposited by the Servicer
         pursuant to Section 4.01(c) in connection with any losses on Permitted
         Investments;

                  (v) any amounts required to be deposited by the Servicer
         pursuant to Section 3.05;

                  (vi) any amounts paid by an Advance Financing Person in
         respect of Advances or Servicing Advances;

                  (vii) any Prepayment Charges collected by the Servicer in
         connection with the Principal Prepayment of any of the Mortgage Loans
         and any Servicer Prepayment Charge Payment Amounts;

                  (viii) the Purchase Price with respect to any Mortgage Loans
         purchased by the Seller pursuant to Section 2.02 or 2.03, any amounts
         which are to be treated pursuant to Section 2.04 of this Agreement as
         the payment of such a Purchase Price; and

                  (ix) any other amounts required to be deposited hereunder.

         The foregoing requirements for deposit by the Servicer into the
Custodial Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be deposited by the
Servicer. In the event that the Servicer shall deposit any amount not required
to be deposited and not otherwise subject to withdrawal pursuant to Section
4.02, it may at any time withdraw or direct the institution maintaining the
Custodial Account, to withdraw such amount from the Custodial Account, any
provision herein to the contrary notwithstanding. Such withdrawal or direction
may be accomplished by delivering written notice thereof to the institution
maintaining the Custodial Account, that describes the amounts deposited in error
in the Custodial Account. The Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited in
the Custodial Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 4.02.

         (c) The institution that maintains the Custodial Account or other
authorized entity shall invest the funds in the Custodial Account, in the manner
directed by the Servicer, in Permitted Investments which shall mature not later
than the next succeeding Remittance Date and shall not be sold or disposed of
prior to its maturity. All such Permitted Investments shall be made in the name
of the Trustee, for the benefit of the Certificateholders. All income and gain
net of any losses realized from any such investment shall be for the benefit of
the Servicer as servicing compensation and shall be remitted to it monthly as
provided herein. The amount of any losses incurred in the Custodial Account in
respect of any such investments shall be deposited by the Servicer into the
Custodial Account immediately as realized, out of its own funds.



                                      -74-
<PAGE>

         (d) The Servicer shall give at least thirty (30) days advance notice to
the Trustee, the Seller, each Rating Agency and the Depositor of any proposed
change of location of the Custodial Account prior to any change thereof.

         Section 4.02 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.

         (a) The Servicer may from time to time make withdrawals from the
Custodial Account for the following purposes:

                  (i) to pay itself (to the extent not previously paid to or
         withheld by the Servicer), as servicing compensation in accordance with
         Section 3.10, that portion of any payment of interest that equals the
         Servicing Fee for the period with respect to which such interest
         payment was made, and, as additional servicing compensation, those
         other amounts set forth in Section 3.10;

                  (ii) to reimburse the Servicer or an Advance Financing Person
         for (A) any unreimbursed Advances to the extent of amounts received
         which represent late recoveries of payments of principal and/or
         interest (net of the related Servicing Fees), Liquidation Proceeds and
         Insurance Proceeds on the Mortgage Loans with respect to which such
         Advances were made in accordance with the provisions of Section 5.01;
         and (B) any unreimbursed Advances with respect to the final liquidation
         of a Mortgage Loan that are Nonrecoverable Advances, but only to the
         extent that late recoveries of payments of principal and/or interest,
         Liquidation Proceeds and Insurance Proceeds received with respect to
         such Mortgage Loan are insufficient to reimburse the Servicer or an
         Advance Financing Person for such unreimbursed Advances or (C) subject
         to Section 4.02(b), any unreimbursed Advances to the extent of Amounts
         Held For Future Distribution funds held in the Custodial Account that
         were not included in the Available Distribution Amount for the
         preceding Distribution Date;

                  (iii) to reimburse the Servicer or an Advance Financing Person
         for any Nonrecoverable Advances;

                  (iv) to reimburse the Servicer from Insurance Proceeds for
         Insured Expenses covered by the related Insurance Policy;

                  (v) to pay the Servicer any unpaid Servicing Fees and to
         reimburse it or any Advance Financing Person for any unreimbursed
         Servicing Advances, provided, however, that the Servicer's or such
         Advance Financing Person's right to reimbursement for Servicing
         Advances pursuant to this subclause (v) with respect to any Mortgage
         Loan shall be limited to amounts received on particular Mortgage
         Loan(s) (including, for this purpose, late recoveries of payments of
         principal and/or interest, Liquidation Proceeds, Insurance Proceeds,
         condemnation proceeds and purchase and repurchase proceeds) that
         represent late recoveries of the payments for which such Servicing
         Advances were made;

                  (vi) to pay to the Seller or the Depositor with respect to
         each Mortgage Loan or property acquired in respect thereof that has
         been purchased pursuant to Section 2.02, 2.03 or 3.24, all amounts
         received thereon and not taken into account in determining the related
         Stated Principal Balance of such repurchased Mortgage Loan;



                                      -75-
<PAGE>

                  (vii) to pay any expenses recoverable by the Servicer pursuant
         to Section 7.04;

                  (viii) to withdraw any amount deposited in the Custodial
         Account and not required to be deposited therein; and

                  (ix) to clear and terminate the Custodial Account upon
         termination of this Agreement pursuant to Section 10.01 hereof.

         In addition, no later than 3:00 p.m. Eastern time on the Remittance
Date, the Servicer shall withdraw from the Custodial Account and remit to the
Trustee (a) all amounts deposited in the Custodial Account as of the close of
business on the last day of the related Due Period (net of charges against or
withdrawals from the Custodial Account pursuant to this Section 4.02), plus (b)
all Advances, if any, which the Servicer is obligated to make pursuant to
Section 5.01, minus (c) any amounts attributable to Principal Prepayments,
Liquidation Proceeds, Insurance Proceeds or condemnation proceeds received after
the applicable Prepayment Period, which amounts shall be remitted on the
following Remittance Date, together with any Compensating Interest required to
be deposited in the Custodial Account in connection with such Principal
Prepayment in accordance with Section 5.02, and minus (d) any amounts
attributable to Scheduled Payments collected but due on a Due Date or Due Dates
subsequent to the first day of the month in which such Remittance Date occurs,
which amounts shall be remitted on the Remittance Date next succeeding the Due
Date related to such Scheduled Payment.

         The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Custodial Account pursuant to subclauses (i), (ii), (iv), (v) and (vi)
above. Prior to making any withdrawal from a Custodial Account pursuant to
subclause (iii), the Servicer shall deliver to the Trustee an Officer's
Certificate of a Authorized Servicer Representative indicating the amount of any
previous Advance or Servicing Advance determined by the Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage Loan(s), and their
respective portions of such Nonrecoverable Advance.

         (b) Notwithstanding the foregoing, any Amounts Held For Future
Distribution withdrawn by the Servicer as permitted in Section 4.02(a)(ii) in
reimbursement of Advances previously made by the Servicer shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the Custodial Account, no later than the close of business on any future
Remittance Date on which the funds on deposit in the Custodial Account shall be
less than the amount required to be remitted to the Trust on such Remittance
Date; provided, however that if the rating of the Servicer (including any
Successor Servicer) is less than "BBB", the Servicer shall be required to
replace such funds by deposit to the Distribution Account, no later than the
close of business on the Remittance Date immediately following the Due Period or
Prepayment Period for which such amounts relate.

         Section 4.03 REPORTS TO TRUSTEE.

         On or before the tenth calendar day of each month, the Servicer shall
furnish to the Trustee electronically in a format reasonably acceptable to the
Trustee loan accounting reports in the investor's assigned loan number order to
document the payment activity on each Mortgage Loan on an individual mortgage
loan basis. With respect to each month, such loan accounting


                                      -76-
<PAGE>

reports shall contain the following, or other items reasonably requested by the
Trustee and which it needs in connection with the performance of its duties
under Sections 5.06 and 5.09:

                  (i) With respect to each Scheduled Payment (on both an actual
         and scheduled basis with respect to mortgage loan balances and on an
         actual basis with respect to paid-through dates), the amount of such
         remittance allocable to principal (including a separate breakdown of
         any Principal Prepayment, including the amount of any Prepayment
         Interest Shortfall);

                  (ii) with respect to each Monthly Payment, the amount of such
         remittance allocable to scheduled interest;

                  (iii) the amount of any Prepayment Charges collected by the
         Servicer;

                  (iv) the amount of servicing compensation received by the
         Servicer during the prior calendar month;

                  (v) the Aggregate Loan Group Balance of the Mortgage Loans in
         each Loan Group and the Aggregate Loan Balance;

                  (vi) the aggregate amount of Advances made by the Servicer
         pursuant to Section 5.01;

                  (vii) the aggregate of any expenses reimbursed to the Servicer
         during the prior calendar month pursuant to Section 4.02; and

                  (viii) the number and aggregate outstanding principal balances
         of Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days,
         (3) 90 days or more; (b) as to which foreclosure has commenced; and (c)
         as to which REO Property has been acquired.

         Section 4.04 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW
ACCOUNTS.

         To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit, promptly upon receipt, and retain therein all collections from the
Mortgagors (or advances by the Servicer) for the payment of taxes, assessments,
hazard insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Servicer to compel a Mortgagor to establish an
Escrow Account in violation of applicable law.

         Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Servicer out of related collections for any payments made with respect to
each Mortgage Loan pursuant to Section 3.01 (with respect to taxes and
assessments and insurance premiums) and Section 3.05 (with respect to hazard
insurance), to refund to any Mortgagors any sums as may be determined to be
overages, to pay interest, if required by law or the terms of the related
Mortgage or Mortgage Note, to such Mortgagors on balances in the Escrow Account,
to remove amounts deposited in error or to clear


                                      -77-
<PAGE>

and terminate the Escrow Account at the termination of this Agreement in
accordance with Section 10.01 thereof. The Escrow Account shall not be a part of
the Trust Fund.

         Section 4.05 ADJUSTMENTS TO MORTGAGE RATE AND SCHEDULED PAYMENT.

         On each applicable Adjustment Date, the Mortgage Rate with respect to
each Mortgage Loan shall be adjusted, in compliance with the requirements of the
related Mortgage and Mortgage Note, to equal the sum of the Index plus the Gross
Margin (rounded in accordance with the related Mortgage Note) subject to the
applicable Periodic Rate Cap, Maximum Mortgage Interest Rate and Minimum
Mortgage Interest Rate, as set forth in the Mortgage Note. The Servicer shall
execute and deliver the notices required by each Mortgage and Mortgage Note,
applicable laws and regulations regarding interest rate adjustments. The
Servicer shall also provide timely notification to the Trustee of all applicable
data and information regarding such interest rate adjustments and the Servicer's
methods of implementing such interest rate adjustments. Upon the discovery by
the Servicer or the Trustee that the Servicer has failed to adjust a Mortgage
Rate or a Scheduled Payment pursuant to the terms of the related Mortgage Note
and Mortgage, the Servicer shall immediately deposit in the Custodial Account
from its own funds the amount of any interest loss caused thereby without
reimbursement therefor.

         Section 4.06 DISTRIBUTION ACCOUNT.

         (a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Distribution Account as
a segregated non-interest bearing trust account or accounts. The Trustee will
deposit in the Distribution Account as identified by the Trustee and as received
by the Trustee, the following amounts:

                  (i) All payments and recoveries in respect of principal on the
         Mortgage Loans, including, without limitation, Principal Prepayments,
         Subsequent Recoveries, Liquidation Proceeds, Insurance Proceeds,
         condemnation proceeds and all payments and recoveries in respect of
         interest on the Mortgage Loans withdrawn by the Servicer from the
         Custodial Account and remitted by the Servicer to the Trustee;

                  (ii) Any Advance and any Compensating Interest Payments;

                  (iii) Any Prepayment Charges collected by the Servicer in
         connection with the Principal Prepayment of any of the Mortgage Loans
         (including any Servicer Prepayment Charge Payment Amounts);

                  (iv) Any Insurance Proceeds or Liquidation Proceeds received
         by or on behalf of the Trustee or which were not deposited in the
         Custodial Account;

                  (v) The Purchase Price with respect to any Mortgage Loans
         purchased by the Depositor pursuant to Section 3.24, and all proceeds
         of any Mortgage Loans or property acquired with respect thereto
         repurchased by the Class X Certificateholder or its designee pursuant
         to Section 10.01;

                  (vi) Any amounts required to be deposited with respect to
         losses on investments of deposits in an Account; and


                                      -78-
<PAGE>

                  (vii) Any other amounts received by or on behalf of the
         Trustee and required to be deposited in the Distribution Account
         pursuant to this Agreement.

         (b) All amounts deposited to the Distribution Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Distribution Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges or assumption,
tax service, statement account or payoff, substitution, satisfaction, release
and other like fees and charges, need not be credited by the Servicer to the
Distribution Account.

         (c) The amount at any time credited to the Distribution Account shall
be held uninvested.

         (d) All amounts received by the Trustee shall be deposited immediately
upon receipt in the Distribution Account.

         Section 4.07 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
                      ACCOUNT.

         (a) The Trustee will, from time to time make or cause to be made such
withdrawals or transfers from the Distribution Account pursuant to this
Agreement for the following purposes:

                  (i) to pay the Trustee any expenses recoverable by the Trustee
         pursuant to this Agreement.

                  (ii) to reimburse the Trustee as Successor Servicer or the
         Servicer for any Advance or Servicing Advance of its own funds, the
         right of the Trustee as Successor Servicer or the Servicer to
         reimbursement pursuant to this subclause (ii) being limited to amounts
         received on a particular Mortgage Loan (including, for this purpose,
         the Purchase Price therefor, Insurance Proceeds, Liquidation Proceeds
         and condemnation proceeds) which represent late payments or recoveries
         of the principal of or interest on such Mortgage Loan respecting which
         such Advance or Servicing Advance was made;

                  (iii) to reimburse the Trustee or the Servicer from Insurance
         Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan
         for amounts expended by the Trustee as Successor Servicer or the
         Servicer in good faith in connection with the restoration of the
         related Mortgaged Property which was damaged by an uninsured cause or
         in connection with the liquidation of such Mortgage Loan;

                  (iv) to reimburse the Trustee as Successor Servicer or the
         Servicer from Insurance Proceeds relating to a particular Mortgage Loan
         for insured expenses incurred with respect to such Mortgage Loan and to
         reimburse the Trustee as Successor Servicer or the Servicer from
         Liquidation Proceeds from a particular Mortgage Loan for Liquidation
         Expenses incurred with respect to such Mortgage Loan;

                  (v) to reimburse the Trustee as Successor Servicer or the
         Servicer for advances of funds pursuant to



                                      -79-
<PAGE>

         this Agreement, and the right to reimbursement pursuant to this
         subclause being limited to amounts received on the related Mortgage
         Loan (including, for this purpose, the Purchase Price therefor,
         Insurance Proceeds, Liquidation Proceeds and condemnation proceeds)
         which represent late recoveries of the payments for which such advances
         were made;

                  (vi) to reimburse the Trustee as Successor Servicer or the
         Servicer for any Advance or advance, after a Realized Loss has been
         allocated with respect to the related Mortgage Loan if the Advance or
         advance has not been reimbursed pursuant to clauses (ii) and (v);

                  (vii) to pay the Credit Risk Management Fee to the Credit Risk
         Manager; provided, however, that upon the termination of the Credit
         Risk Manager pursuant to Section 4.08(b) hereof, the amount of the
         Credit Risk Management Fee (or any portion thereof) previously payable
         to the Credit Risk Manager as described herein shall be paid to the
         Seller;

                  (viii) to reimburse the Trustee for expenses, costs and
         liabilities incurred by and reimbursable to it pursuant to this
         Agreement (including the expenses of the Trustee in connection with a
         tax audit in connection with the performance of its obligations
         pursuant to Section 9.12);

                  (ix) to pay to the Trust Fund, as additional servicing
         compensation, any Excess Liquidation Proceeds to the extent not
         retained by the Servicer;

                  (x) to reimburse or pay the Servicer any such amounts as are
         due thereto under this Agreement and have not been retained by or paid
         to the Servicer, to the extent provided herein or therein;

                  (xi) to reimburse the Trustee for expenses incurred in the
         transfer of servicing responsibilities of the terminated Servicer after
         the occurrence and continuance of a Servicer Default to the extent not
         paid by the terminated Servicer;

                  (xii) after the occurrence of an event of default under the
         Advance Facility, to reimburse any Advance Financing Person for any
         Advances or Servicing Advances made by such Advance Financing Person
         pursuant to Section 5.01(b) and not reimbursed to such Advance
         Financing Person pursuant to Section 4.02;

                  (xiii) to reimburse the Custodian for expenses, costs and
         liabilities incurred or reimbursable to it pursuant to this Agreement;

                  (xiv) to remove amounts deposited in error; and

                  (xv) to clear and terminate the Distribution Account pursuant
         to Section 10.01.

         (b) The Trustee shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (ii) through
(v), inclusive, and (vii) or with respect to any such



                                      -80-
<PAGE>

amounts which would have been covered by such subclauses had the amounts not
been retained by the Trustee without being deposited in the Distribution Account
under Section 4.07.

         (c) On each Distribution Date, the Trustee shall distribute funds on
deposit in the Distribution Account to the holders of the Certificates in
accordance with Section 5.06.

         Section 4.08 DUTIES OF THE CREDIT RISK MANAGER; TERMINATION.

         (a) The Depositor appoints The Murrayhill Company as Credit Risk
Manager. For and on behalf of the Depositor, the Credit Risk Manager will
provide reports and recommendations concerning the Mortgage Loans that are past
due, as to which there has been commencement of foreclosure, as to which there
has been forbearance in exercise of remedies which are in default, as to which a
Mortgagor is the subject of bankruptcy, receivership, or an arrangement of
creditors, or as to which have become REO Properties. Such reports and
recommendations will be based upon information provided to the Credit Risk
Manager pursuant to the Credit Risk Management Agreement and the Credit Risk
Manager shall look solely to the Servicer for all information and data
(including loss and delinquency information and data) and loan level information
and data relating to the servicing of the Mortgage Loans. If the Credit Risk
Manager is no longer able to perform its duties hereunder, the Credit Risk
Manager may be terminated by the Depositor at the direction of
Certificateholders evidencing not less than 66 2/3% of the Voting Rights. The
Depositor may, at its option, cause the appointment of a successor Credit Risk
Manager. Upon any termination of the Credit Risk Manager or the appointment of a
successor Credit Risk Manager, the Depositor shall give written notice thereof
to the Servicer, the Trustee, each Rating Agency and the Credit Risk Manager.
Notwithstanding the foregoing, the termination of the Credit Risk Manager
pursuant to this Section 4.08(a) shall not become effective until the
appointment of a successor Credit Risk Manager.

         (b) Within six months of the Closing Date, the Seller may, at its
option, terminate the Credit Risk Manager if, in its reasonable judgment, (i)
the value of the servicing rights with respect to the Mortgage Loans is
adversely affected as a result of the presence of the Credit Risk Manager or
(ii) the presence of the Credit Risk Manager impairs the ability of the Seller
to transfer the servicing rights with respect to the Mortgage Loans as permitted
by this Agreement. Upon the termination of the Credit Risk Manager, the Seller
may, at its option, cause the Depositor to appoint a successor Credit Risk
Manager. Notice of such termination shall be provided by the Seller to the
Rating Agencies, the Trustee, the Depositor, the Servicer and the Credit Risk
Manager. Upon the appointment of a successor Credit Risk Manager, the Depositor
shall provide written notice thereof to each Rating Agency, the Trustee, the
Servicer and the Credit Risk Manager.

         If the Credit Risk Manager is terminated pursuant to this Section
4.08(b), the Credit Risk Manager shall only be entitled to a fee equal to
0.0050% with respect to each Mortgage Loan for the one year period following
such termination. After the expiration of such one year period, the Credit Risk
Manager shall not be entitled to the Credit Risk Management Fee or any portion
thereof with respect to any Mortgage Loan. The excess of the Credit Risk
Management Fee with respect to each Mortgage Loan over the amount payable to the
Credit Risk Manager as described in this paragraph shall be paid to the Seller
pursuant to Section 4.07(a)(vii).

                                      -81-
<PAGE>

         Section 4.09 LIMITATION UPON LIABILITY OF THE CREDIT RISK MANAGER.

         Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability to
the Trustee, the Certificateholders or the Depositor for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, in reliance upon information provided by the Servicer under the
Credit Risk Management Agreement or of errors in judgment; provided, however,
that this provision shall not protect the Credit Risk Manager or any such person
against liability that would otherwise be imposed by reason of willful
malfeasance, bad faith or gross negligence in its performance of its duties
under this Agreement or the Credit Risk Management Agreement. The Credit Risk
Manager and any director, officer, employee or agent of the Credit Risk Manager
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder, and may
rely in good faith upon the accuracy of information furnished by the Servicer
pursuant to the Credit Risk Management Agreement in the performance of its
duties thereunder and hereunder.



                                      -82-
<PAGE>


                                   ARTICLE V

                           ADVANCES AND DISTRIBUTIONS

         Section 5.01 ADVANCES; ADVANCE FACILITY.

         (a) The Servicer shall make an Advance with respect to any Mortgage
Loan and deposit such Advance in the Distribution Account no later than 3:00
p.m. Eastern time on the Remittance Date in immediately available funds. The
Servicer shall be obligated to make any such Advance only to the extent that
such advance would not be a Nonrecoverable Advance. If the Servicer shall have
determined that it has made a Nonrecoverable Advance or that a proposed Advance
or a lesser portion of such Advance would constitute a Nonrecoverable Advance,
the Servicer shall deliver (i) to the Trustee for the benefit of the
Certificateholders funds constituting the remaining portion of such Advance, if
applicable, and (ii) to the Depositor, each Rating Agency and the Trustee an
Officer's Certificate setting forth the basis for such determination.

         In lieu of making all or a portion of such Advance from its own funds,
the Servicer may (i) cause to be made an appropriate entry in its records
relating to the Custodial Account that any Amounts Held for Future Distribution
has been used by the Servicer in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Custodial Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Servicer by deposit in the Distribution Account, no later than the close of
business on any future Remittance Date on which the funds on deposit in the
Custodial Account shall be less than the amount required to be remitted to the
Trust on such Remittance Date; provided, however that if the rating of the
Servicer (including any Successor Servicer) is less than "BBB", the Servicer
shall be required to replace such funds by deposit to the Distribution Account,
no later than the close of business on the Remittance Date immediately following
the Due Period or Prepayment Period for which such amounts relate.

         The Servicer shall be entitled to be reimbursed from the Custodial
Account for all Advances of its own funds made pursuant to this Section as
provided in Section 4.02. The obligation to make Advances with respect to any
Mortgage Loan shall continue until such Mortgage Loan is paid in full or the
related Mortgaged Property or related REO Property has been liquidated or until
the purchase or repurchase thereof (or substitution therefor) from the Trust
Fund pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 5.01.

         Subject to and in accordance with the provisions of Article VIII
hereof, in the event that the Servicer fails to make such Advance, then the
Trustee, as a Successor Servicer, shall be obligated to make such Advance only
to the extent such Advance, if made, would not constitute a Nonrecoverable
Advance, subject to the provisions of Sections 5.01 and 8.02.

         (b) (i) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility"), the documentation
for which complies with Section 5.01(b)(v) below, under which (1) the Servicer
assigns or pledges its rights under this Agreement to be reimbursed for any or
all Advances and/or Servicing Advances to (i) a Person,


                                      -83-
<PAGE>

which may be a special-purpose bankruptcy-remote entity (an "SPV"), (ii) a
Person, which may simultaneously assign or pledge such rights to an SPV or (iii)
a lender (a "Lender"), which, in the case of any Person or SPV of the type
described in either of the preceding clauses (i) or (ii), may directly or
through other assignees and/or pledgees, assign or pledge such rights to a
Person, which may include a trustee acting on behalf of holders of debt
instruments (any such Person or any such Lender, an "Advance Financing Person"),
and/or (2) an Advance Financing Person agrees to fund all the Advances and/or
Servicing Advances required to be made by the Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party
shall be required before the Servicer may enter into an Advance Facility nor
shall the Trustee or the Certificateholders be a third party beneficiary of any
obligation of an Advance Financing Person to the Servicer. Notwithstanding the
existence of any Advance Facility under which an Advance Financing Person agrees
to fund Advances and/or Servicing Advances, (A) the Servicer (i) shall remain
obligated pursuant to this Agreement to make Advances and/or Servicing Advances
pursuant to and as required by this Agreement and (ii) shall not be relieved of
such obligations by virtue of such Advance Facility and (B) neither the Advance
Financing Person nor any Servicer's Assignee (as hereinafter defined) shall have
any right to proceed against or otherwise contact any Mortgagor for the purpose
of collecting any payment that may be due with respect to any related Mortgage
Loan or enforcing any covenant of such Mortgagor under the related Mortgage Loan
documents.

                  (ii) If the Servicer enters into an Advance Facility, the
Servicer and the related Advance Financing Person shall deliver to the Trustee
at the address set forth in Section 11.05 hereof no later than the Servicer
Remittance Date immediately following the effective date of such Advance
Facility a written notice (an "Advance Facility Notice"), stating (a) the
identity of the Advance Financing Person and (b) the identity of the Person (the
"Servicer's Assignee") that will, subject to Section 5.01(b)(iii) hereof, have
the right to make withdrawals from the Custodial Account pursuant to Section
4.02 hereof to reimburse previously unreimbursed Advances and/or Servicing
Advances ("Advance Reimbursement Amounts"). Advance Reimbursement Amounts (i)
shall consist solely of amounts in respect of Advances and/or Servicing Advances
for which the Servicer would be permitted to reimburse itself in accordance with
Section 4.02 hereof, assuming the Servicer had made the related Advance(s)
and/or Servicing Advance(s) and (ii) shall not consist of amounts payable to a
successor Servicer in accordance with Section 4.02 hereof to the extent
permitted under Section 5.01(b)(v) below.

                  (iii) Notwithstanding the existence of an Advance Facility,
the Servicer, on behalf of the Advance Financing Person and the Servicer's
Assignee, shall be entitled to receive reimbursements of Advances and/or
Servicing Advances in accordance with Section 4.02 hereof, which entitlement may
be terminated by the Advance Financing Person pursuant to a written notice to
the Trustee in the manner set forth in Section 11.05 hereof. Upon receipt of
such written notice, the Servicer shall no longer be entitled to receive
reimbursement for any Advance Reimbursement Amounts and the Servicer's Assignee
shall immediately have the right to receive from the Custodial Account all
Advance Reimbursement Amounts. Notwithstanding the foregoing, and for the
avoidance of doubt, (i) the Servicer and/or the Servicer's Assignee shall only
be entitled to reimbursement of Advance Reimbursement Amounts hereunder from
withdrawals from the Custodial Account pursuant to Section 4.02 of this
Agreement and shall not otherwise be entitled to make withdrawals or receive
amounts that shall be deposited in the Distribution Account pursuant to Section
4.06 hereof, and (ii) none of the Trustee or the



                                      -84-
<PAGE>

Certificateholders shall have any right to, or otherwise be entitled to, receive
any Advance Reimbursement Amounts to which the Servicer or Servicer's Assignee,
as applicable, shall be entitled pursuant to Section 4.02 hereof. An Advance
Facility may be terminated by the joint written direction of the Servicer and
the related Advance Financing Person. Written notice of such termination shall
be delivered to the Trustee in the manner set forth in Section 11.05 hereof.
None of the Depositor or the Trustee shall, as a result of the existence of any
Advance Facility, have any additional duty or liability with respect to the
calculation or payment of any Advance Reimbursement Amount, nor, as a result of
the existence of any Advance Facility, shall the Depositor or the Trustee have
any additional responsibility to track or monitor the administration of the
Advance Facility or the payment of Advance Reimbursement Amounts to Servicer's
Assignee. The Servicer shall indemnify the Depositor, the Trustee, any successor
Servicer and the Trust Fund for any claim, loss, liability or damage resulting
from any claim by the related Advancing Financing Person, except to the extent
that such claim, loss, liability or damage resulted from or arose out of
negligence, recklessness or willful misconduct on the part of the Depositor, the
Trustee or any successor Servicer, as the case may be, or failure by the
successor Servicer or the Trustee, as the case may be, to remit funds as
required by this Agreement or the commission of an act or omission to act by the
successor Servicer or the Trustee, as the case may be, and the passage of any
applicable cure or grace period, such that an Event of Default under this
Agreement occurs or such entity is subject to termination for cause under this
Agreement. The Servicer shall maintain and provide to any successor Servicer
and, upon request, the Trustee a detailed accounting on a loan-by-loan basis as
to amounts advanced by, pledged or assigned to, and reimbursed to any Advancing
Financing Person. The successor Servicer shall be entitled to rely on any such
information provided by the Servicer, and the successor Servicer shall not be
liable for any errors in such information.

                  (iv) An Advance Financing Person who receives an assignment or
pledge of rights to receive Advance Reimbursement Amounts and/or whose
obligations are limited to the funding of Advances and/or Servicing Advances
pursuant to an Advance Facility shall not be required to meet the criteria for
qualification as the Servicer.

                  (v) As between the Servicer and its Advance Financing Person,
on the one hand, and a successor Servicer and its Advance Financing Person, if
any, on the other hand, Advance Reimbursement Amounts on a loan-by-loan basis
with respect to each Mortgage Loan as to which an Advance and/or Servicing
Advance shall have been made and be outstanding shall be allocated on a
"first-in, first out" basis. In the event the Servicer's Assignee shall have
received some or all of an Advance Reimbursement Amount related to Advances
and/or Servicing Advances that were made by a Person other than the Servicer or
its related Advance Financing Person in error, then the Servicer's Assignee
shall be required to remit any portion of such Advance Reimbursement Amount to
each Person entitled to such portion of such Advance Reimbursement Amount.
Without limiting the generality of the foregoing, the Servicer shall remain
entitled to be reimbursed by the Advance Financing Person for all Advances
and/or Servicing Advances funded by the Servicer to the extent the related
Advance Reimbursement Amounts have not been assigned or pledged to such Advance
Financing Person or Servicer's Assignee.

                  (vi) For purposes of any Officer's Certificate of the Servicer
delivered pursuant to Section 5.01(a), any Nonrecoverable Advance referred to
therein may have been



                                      -85-
<PAGE>

made by the Servicer. In making its determination that any Advance or Servicing
Advance theretofore made has become a Nonrecoverable Advance, the Servicer shall
apply the same criteria in making such determination regardless of whether such
Advance or Servicing Advance shall have been made by the Servicer.

                  (vii) Any amendment to this Section 5.01(b) or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 5.01(b),
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Depositor and the Servicer without the consent
of any Certificateholder, provided such amendment complies with Section 11.01
hereof. All reasonable costs and expenses (including attorneys' fees) of each
party hereto of any such amendment shall be borne solely by the Servicer. The
parties hereto hereby acknowledge and agree that: (a) the Advances and/or
Servicing Advances financed by and/or pledged to an Advance Financing Person
under any Advance Facility are obligations owed to the Servicer payable only
from the cash flows and proceeds received under this Agreement for reimbursement
of Advances and/or Servicing Advances only to the extent provided herein, and
the Trustee and the Trust are not, as a result of the existence of any Advance
Facility, obligated or liable to repay any Advances and/or Servicing Advances
financed by the Advance Financing Person; (b) the Servicer will be responsible
for remitting to the Advance Financing Person the applicable amounts collected
by it as reimbursement for Advances and/or Servicing Advances funded by the
Advance Financing Person, subject to the provisions of this Agreement; and (c)
the Trustee shall not have any responsibility to track or monitor the
administration of the financing arrangement between the Servicer and any Advance
Financing Person.

         Section 5.02 COMPENSATING INTEREST PAYMENTS.

         In the event that there is a Prepayment Interest Shortfall arising from
a voluntary Principal Prepayment in part or in full by the Mortgagor with
respect to any Mortgage Loan, the Servicer shall, to the extent of the Servicing
Fee for such Distribution Date, deposit into the Distribution Account, as a
reduction of and to the extent of, the Servicing Fee for such Distribution Date,
no later than the close of business on the Remittance Date immediately preceding
such Distribution Date, an amount equal to the Prepayment Interest Shortfall;
and in case of such deposit, the Servicer shall not be entitled to any recovery
or reimbursement from the Depositor, the Trustee, the Seller, the Trust Fund or
the related Certificateholders.

         Section 5.03 REMIC DISTRIBUTIONS.

         On each Distribution Date the Trustee, shall be deemed to allocate
distributions to the REMIC I Regular Interests in accordance with Section 5.11
hereof.

         Section 5.04 RESERVED.

         Section 5.05 RESERVED.



                                      -86-
<PAGE>

         Section 5.06 DISTRIBUTIONS ON THE CERTIFICATES.

         On each Distribution Date, the Trustee shall withdraw funds on deposit
in the Distribution Account and make distributions to the Certificates as
directed in accordance with the related Remittance Report for such Distribution
Date, in the following order of priority:

                  (i) On each Distribution Date, the Interest Remittance Amount
         for such Distribution Date will be paid in the following order of
         priority:

                           (1) from the Interest Remittance Amount for Loan
                  Group I and Loan Group II, to the Senior Certificates, pro
                  rata based on amounts due, Current Interest and any
                  Carryforward Interest for each such Class and such
                  Distribution Date, applied in accordance with the last
                  paragraph of this clause (i);

                           (2) first, from the Interest Remittance Amount for
                  Loan Group II and then from the Interest Remittance Amount for
                  Loan Group I, to the Class M-1 Certificates, Current Interest
                  and Carryforward Interest for such Class and Distribution
                  Date;

                           (3) first, from the Interest Remittance Amount for
                  Loan Group II and then from the Interest Remittance Amount for
                  Loan Group I, to the Class M-2 Certificates, Current Interest
                  and Carryforward Interest for such Class and Distribution
                  Date;

                           (4) first, from the Interest Remittance Amount for
                  Loan Group II and then from the Interest Remittance Amount for
                  Loan Group I, to the Class M-3 Certificates, Current Interest
                  and Carryforward Interest for such Class and Distribution
                  Date;

                           (5) first, from the Interest Remittance Amount for
                  Loan Group II and then from the Interest Remittance Amount for
                  Loan Group I, to the Class M-4 Certificates, Current Interest
                  and Carryforward Interest for such Class and Distribution
                  Date;

                           (6) first, from the Interest Remittance Amount for
                  Loan Group II and then from the Interest Remittance Amount for
                  Loan Group I, to the Class M-5 Certificates, Current Interest
                  and Carryforward Interest for such Class and Distribution
                  Date; and

                           (7) for application as part of Monthly Excess
                  Cashflow for such Distribution Date, any Monthly Excess
                  Interest for such Distribution Date.

                  The Interest Remittance Amount for Loan Group I and Loan Group
         II distributed pursuant to clause (i)(1) above will be applied to the
         Senior Certificates as follows: (a) the Interest Remittance Amount for
         Loan Group I will be distributed in the following order of priority:
         (x) first, concurrently to the Class I-A-1 Certificates and Class I-A-2
         Certificates, Current Interest and any Carryforward Interest for each
         such Class for such Distribution Date on a pro rata basis based on the
         entitlement of each such Class; and


                                      -87-
<PAGE>

         then (y) concurrently, to the Class II-A-1, Class II-A-2 and Class
         II-A-3 Certificates, Current Interest and Carryforward Interest for
         each such Class for such Distribution Date, on a pro rata basis based
         on the entitlement of each such Class, after taking into account the
         distribution of the Interest Remittance Amount for Loan Group II on
         such Distribution Date; and (b) the Interest Remittance Amount for Loan
         Group II will be distributed in the following order of priority: (x)
         first, to the Class II-A-1, Class II-A-2 and Class II-A-3 Certificates,
         Current Interest and any Carryforward Interest for such Class for such
         Distribution Date, on a pro rata basis, based on the entitlement of
         each such Class; and then (y) concurrently, to the Class I-A-1
         Certificates and Class I-A-2 Certificates, Current Interest and
         Carryforward Interest for each such Class for such Distribution Date,
         on a pro rata basis based on the entitlement of each such Class, after
         taking into account the distribution of the Interest Remittance Amount
         for Loan Group I on such distribution date.

                  (ii) The Principal Payment Amount will be paid on each
         Distribution Date as follows:

                           I. On each Distribution Date (a) prior to the
                  Stepdown Date or (b) with respect to which a Trigger Event is
                  in effect, the Principal Payment Amount will be paid in the
                  following order of priority:

                  (i)      (a) from the Principal Payment Amount derived from
                           the Group I Mortgage Loans, concurrently, to the
                           Class I-A-1 Certificates and Class I-A-2
                           Certificates, on a pro rata basis, based on their
                           respective Certificate Principal Balances, until the
                           Certificate Principal Balance of each such Class has
                           been reduced to zero;

                           (b) from the Principal Payment Amount derived from
                           the Group II Mortgage Loans, concurrently, to the
                           Class II-A-1, Class II-A-2 and Class II-A-3
                           Certificates, on a pro rata basis, based on their
                           respective Certificate Principal Balances, until the
                           Certificate Principal Balance of each such Class has
                           been reduced to zero;

                  (ii)     (a) from the Principal Payment Amount derived from
                           the Group I Mortgage Loans remaining after the
                           Certificate Principal Balances of the Class I-A-1
                           Certificates and Class I-A-2 Certificates have been
                           reduced to zero, concurrently, to the Class II-A-1,
                           Class II-A-2 and Class II-A-3 Certificates, on a pro
                           rata basis, based on their respective Certificate
                           Principal Balances remaining after payments pursuant
                           to clause I(i) above, until the Certificate Principal
                           Balance of each such Class has been reduced to zero;

                           (b) from the Principal Payment Amount derived from
                           the Group II Mortgage Loans remaining after the
                           Certificate Principal Balances of the Class II-A-1,
                           Class II-A-2 and Class II-A-3 Certificates have been
                           reduced to zero, concurrently, to the Class I-A-1
                           Certificates and Class I-A-2, Certificates, on a pro
                           rata basis, based on their respective Certificate


                                      -88-
<PAGE>

                           Principal Balances remaining after payments pursuant
                           to clause I(i) above, until the Certificate Principal
                           Balance of each such Class has been reduced to zero;

                  (iii)    to the Class M-1 Certificates, until its Certificate
                           Principal Balance is reduced to zero;

                  (iv)     to the Class M-2 Certificates, until its Certificate
                           Principal Balance is reduced to zero;

                  (v)      to the Class M-3 Certificates, until its Certificate
                           Principal Balance is reduced to zero;

                  (vi)     to the Class M-4 Certificates, until its Certificate
                           Principal Balance is reduced to zero;

                  (vii)    to the Class M-5 Certificates, until its Certificate
                           Principal Balance is reduced to zero; and

                  (viii)   for application as part of Monthly Excess Cashflow
                           for such Distribution Date pursuant to subclause
                           (iii) below, any such Principal Payment Amount
                           remaining after application pursuant to clauses I(i)
                           through (vii) above.

                           II. On each Distribution Date (a) on or after the
                  Stepdown Date and (b) with respect to which a Trigger Event is
                  not in effect, the Principal Payment Amount will be paid in
                  the following order of priority:

                  (i)      (a) from the Group I Allocation Amount, concurrently,
                           to the Class I-A-1 Certificates and Class I-A-2
                           Certificates, on a pro rata basis, based on their
                           respective Certificate Principal Balances, until the
                           Certificate Principal Balance of each such Class has
                           been reduced to zero;

                           (b) from the Group II Allocation Amount,
                           concurrently, to the Class II-A-1, Class II-A-2 and
                           Class II-A-3 Certificates, on a pro rata basis, based
                           on their respective Certificate Principal Balances
                           until the Certificate Principal Balance of each such
                           Class has been reduced to zero;

                  (ii)     (a) from the Group I Allocation Amount remaining
                           after the Certificate Principal Balances of the Class
                           I-A-1 Certificates and Class I-A-2 Certificates have
                           been reduced to zero, concurrently, to the Class
                           II-A-1, Class II-A-2 and Class II-A-3 Certificates,
                           on a pro rata basis, based on their respective
                           Certificate Principal Balances remaining after
                           payments pursuant to clause II(i) above, until the
                           Certificate Principal Balance of each such Class has
                           been reduced to zero;

                           (b) from the Group II Allocation Amount remaining
                           after the Certificate Principal Balances of the Class
                           II-A-1, Class II-A-2 and Class II-A-3


                                      -89-
<PAGE>

                           Certificates have been reduced to zero, concurrently,
                           to the Class I-A-1 Certificates and Class I-A-2
                           Certificates, on a pro rata basis, based on their
                           respective Certificate Principal Balances remaining
                           after payments pursuant to clause II(i) above, until
                           the Certificate Principal Balance of each such Class
                           has been reduced to zero;

                  (iii)    to the Class M-1 Certificates, the Class M-1
                           Principal Payment Amount for such Distribution Date,
                           until its Certificate Principal Balance is reduced to
                           zero;

                  (iv)     to the Class M-2 Certificates, the Class M-2
                           Principal Payment Amount for such Distribution Date,
                           until its Certificate Principal Balance is reduced to
                           zero;

                  (v)      to the Class M-3 Certificates, the Class M-3
                           Principal Payment Amount for such Distribution Date,
                           until its Certificate Principal Balance is reduced to
                           zero;

                  (vi)     to the Class M-4 Certificates, the Class M-4
                           Principal Payment Amount for such Distribution Date,
                           until its Certificate Principal Balance is reduced to
                           zero;

                  (vii)    to the Class M-5 Certificates, the Class M-5
                           Principal Payment Amount for such Distribution Date,
                           until its Certificate Principal Balance is reduced to
                           zero; and

                  (viii)   for application as part of Monthly Excess Cashflow
                           for such Distribution Date pursuant to clause (iii)
                           below, any such Principal Payment Amount remaining
                           after application pursuant to clauses II(i) through
                           (vii) above.

                  (iii) On each Distribution Date, the Monthly Excess Cashflow
         will be distributed in the following order of priority:

                  (1)(A) until the aggregate Certificate Principal Balance of
         the Publicly Offered Certificates equals the Aggregate Loan Balance for
         such Distribution Date minus the Targeted Overcollateralization Amount
         for such date, on each Distribution Date (a) prior to the Stepdown Date
         or (b) with respect to which a Trigger Event is in effect, to the
         extent of Monthly Excess Interest for such Distribution Date, to the
         Publicly Offered Certificates, in the following order of priority:

         (a)      (i) the Group I Excess Interest Amount in the following order
                  of priority: (x) first, concurrently, to the Class I-A-1
                  Certificates and Class I-A-2 Certificates, on a pro rata basis
                  based on their respective Certificate Principal Balances until
                  the Certificate Principal Balance of each such Class has been
                  reduced to zero; and then (y) concurrently, to the Class
                  II-A-1, Class II-A-2 and Class II-A-3 Certificates, on a pro
                  rata basis based on their respective Certificate Principal
                  Balances after taking into account the distribution of the
                  Group II Excess Interest


                                      -90-
<PAGE>

                  Amount until the Certificate Principal Balance of each such
                  class has been reduced to zero;

                  (ii) the Group II Excess Interest Amount in the following
                  order of priority: (x) first, concurrently, to the Class
                  II-A-1, Class II-A-2 and Class II-A-3 Certificates, on a pro
                  rata basis based on their respective Certificate Principal
                  Balances until the Certificate Principal Balance of each such
                  Class has been reduced to zero; and then (y) concurrently, to
                  the Class I-A-1 Certificates and Class I-A-2 Certificates, on
                  a pro rata basis based on their respective Certificate
                  Principal Balances after taking into account the distribution
                  of the Group I Excess Interest Amount until the Certificate
                  Principal Balance of each such class has been reduced to zero;

         (b)      to the Class M-1 Certificates, until its Certificate Principal
                  Balance is reduced to zero;

         (c)      to the Class M-2 Certificates, until its Certificate Principal
                  Balance is reduced to zero;

         (d)      to the Class M-3 Certificates, until its Certificate Principal
                  Balance is reduced to zero;

         (e)      to the Class M-4 Certificates, until its Certificate Principal
                  Balance is reduced to zero; and

         (f)      to the Class M-5 Certificates, until its Certificate Principal
                  Balance is reduced to zero;

                  (B) on each Distribution Date on or after the Stepdown Date
         and with respect to which a Trigger Event is not in effect, to fund any
         principal distributions required to be made on such Distribution Date
         set forth in Section 5.06(ii)II after giving effect to the distribution
         of the Principal Payment Amount for such date, in accordance with the
         priorities set forth therein;

                  (2) concurrently, to the Class I-A-2 Certificates and Class
         II-A-3 Certificates, any Deferred Amount for such Class, on a pro rata
         basis, based on the amount due with respect to each such Class;

                  (3) to the Class M-1 Certificates, any Deferred Amount for
         such Class;

                  (4) to the Class M-2 Certificates, any Deferred Amount for
         such Class;

                  (5) to the Class M-3 Certificates, any Deferred Amount for
         such Class;

                  (6) to the Class M-4 Certificates, any Deferred Amount for
         such Class;

                  (7) to the Class M-5 Certificates, any Deferred Amount for
         such Class;

                  (8) to the Basis Risk Shortfall Reserve Fund and then from the
         Basis Risk Shortfall Reserve Fund to the Class II-A-1, Class II-A-2 and
         Class II-A-3 Certificates,


                                      -91-
<PAGE>

         concurrently, any Basis Risk Shortfall for each such Class, on a pro
         rata basis based on the entitlement of each such Class; provided,
         however that any payments in respect of Basis Risk Shortfalls payable
         to the Class II-A-2 Certificates pursuant to this clause shall be
         determined after taking into account payments made from the Cap
         Provider under the Cap Contract;

                  (9) to the Basis Risk Shortfall Reserve Fund and then from the
         Basis Risk Shortfall Reserve Fund to the Class M-1 Certificates, any
         Basis Risk Shortfall for such Class;

                  (10) to the Basis Risk Shortfall Reserve Fund and then from
         the Basis Risk Shortfall Reserve Fund to the Class M-2 Certificates,
         any Basis Risk Shortfall for such Class;

                  (11) to the Basis Risk Shortfall Reserve Fund and then from
         the Basis Risk Shortfall Reserve Fund to the Class M-3 Certificates,
         any Basis Risk Shortfall for such Class;

                  (12) to the Basis Risk Shortfall Reserve Fund and then from
         the Basis Risk Shortfall Reserve Fund to the Class M-4 Certificates,
         any Basis Risk Shortfall for such Class;

                  (13) to the Basis Risk Shortfall Reserve Fund and then from
         the Basis Risk Shortfall Reserve Fund to the Class M-5 Certificates,
         any Basis Risk Shortfall for such Class;

                  (14) to the Class X Certificates, the Class X Distribution
         Amount; and

                  (15) to the Class R Certificates, any remaining amount. It is
         not anticipated that any amounts will be distributed to the Class R
         Certificates under this clause (15).

         Distributions pursuant to clauses (7) through (13) above on any
Distribution Date will be made after giving effect to any withdrawals from the
Basis Risk Shortfall Reserve Fund on such date to pay Basis Risk Shortfalls. On
each Distribution Date, the Trustee, after making the required distributions of
interest and principal to the Certificates as described in clauses (i) and (ii)
above and after the distribution of the Monthly Excess Cashflow as described in
clause (iii) above, will withdraw from the Basis Risk Shortfall Reserve Fund the
amounts on deposit therein and distribute such amounts to the Publicly Offered
Certificates (other than the Group I Certificates) in respect of any Basis Risk
Shortfalls in the following manner and order of priority: first, concurrently to
the Senior Certificates (other than the Group I Certificates) on a pro rata
basis, based on the entitlement of each such Class, the amount of any Basis Risk
Shortfalls allocated to such Class for such Distribution Date; second, to the
Class M-1 Certificates, the amount of any Basis Risk Shortfall allocated to such
Class for such Distribution Date for such Class; third, to the Class M-2
Certificates, the amount of any Basis Risk Shortfall allocated to such Class for
such Distribution Date for such Class; fourth, to the Class M-3 Certificates,
the amount of any Basis Risk Shortfalls allocated to such Class for such
Distribution Date for such Class; fifth, to the Class M-4 Certificates, the
amount of any Basis Risk Shortfalls


                                      -92-
<PAGE>

allocated to such Class for such Distribution Date, and sixth, to the Class M-5
Certificates, the amount of any Basis Risk Shortfalls allocated to such Class
for such Distribution Date.

                  (iv) Subject to Section 10.02 hereof respecting the final
         distribution on a Class of Publicly Offered Certificates, on each
         Distribution Date the Trustee shall make distributions to each Holder
         of a Publicly Offered Certificate of record on the preceding Record
         Date either by wire transfer in immediately available funds to the
         account of such holder at a bank or other entity having appropriate
         facilities therefor, if (i) such Holder has so notified the Trustee at
         least 5 Business Days prior to the related Record Date and (ii) such
         Holder shall hold Regular Certificates with aggregate principal
         denominations of not less than $1,000,000 or evidencing a Percentage
         Interest aggregating 10% or more with respect to such Class or, if not,
         by check mailed by first class mail to such Certificateholder at the
         address of such holder appearing in the Certificate Register.
         Notwithstanding the foregoing, but subject to Section 10.02 hereof
         respecting the final distribution, distributions with respect to
         Publicly Offered Certificates registered in the name of a Depository
         shall be made to such Depository in immediately available funds.

         Section 5.07 ALLOCATION OF REALIZED LOSSES .

         (a) On or prior to each Determination Date, the Trustee shall determine
the amount of any Realized Loss in respect of each Mortgage Loan that occurred
during the immediately preceding calendar month.

         (b) The interest portion of Realized Losses on the Mortgage Loans shall
be allocated to the Certificates as described in Section 1.02 hereof.

         (c) The principal portion of all Realized Losses on the Mortgage Loans
shall be allocated on each Distribution Date as follows: first, to Net Monthly
Excess Cashflow; second, to the Class X Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; third, to the Class M-5
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; fourth, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fifth, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; sixth,
to the Class M-2 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; seventh, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and eighth, with
respect to Realized Losses on the Group I Mortgage Loans only, to the Class
I-A-2 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero and with respect to Realized Losses on the Group II Mortgage
Loans only, to the Class II-A-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero. All such Realized Losses to be
allocated to the Certificate Principal Balances of the Class I-A-2 Certificates,
Class II-A-3 Certificates and all Classes of Subordinate Certificates on any
Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class I-A-2 Certificates, Class II-A-3 Certificate or
any Class of Subordinate Certificates shall be to the Certificate Principal
Balance of such Class immediately prior to the relevant Distribution Date,
before reduction thereof by any Realized Losses, in each case to be allocated to
such Class of Certificates, on such Distribution Date.



                                      -93-
<PAGE>

         Any allocation of the principal portion of Realized Losses to a Class
I-A-2 Certificate, Class II-A-3 Certificate or Subordinate Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated; any allocation of Realized Losses to a Class
X Certificate shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 5.06(iii)(14). No allocations of any Realized Losses
shall be made to the Certificate Principal Balances of the Class I-A-1, Class
II-A-1, Class II-A-2 or Class P Certificates.

         All such Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.

         (d) Notwithstanding anything to the contrary contained herein, if on
any Distribution Date the Trustee discovers, based solely on the reports
delivered by the Servicer under this Agreement that any Subsequent Recoveries
have been collected by the Servicer with respect to the Mortgage Loans, the
amount of such Subsequent Recoveries will be applied to increase the Certificate
Principal Balance of (i) the Class I-A-3 Certificates with respect to Subsequent
Recoveries relating to the Group I Mortgage Loans, (ii) the Class II-A-3
Certificates with respect to Subsequent Recoveries relating to the Group II
Mortgage Loans and (iii) the Class of Subordinate Certificates with the highest
payment priority to which Realized Losses on the Mortgage Loans have been
allocated, but not by more than the amount of Realized Losses previously
allocated to the Class I-A-2 Certificates, Class II-A-3 Certificates or that
Class of Subordinate Certificates pursuant to this Section 5.07. After the
Certificate Principal Balances of the Class I-A-2 Certificates and Class II-A-2
Certificates have been increased up to the amount of Realized Losses allocated
thereto pursuant to this Section 5.07 to the extent that such Applied Loss
Amounts have not been paid to such certificates as a Deferred Amount, any
additional Subsequent Recoveries with respect to the Mortgage Loans will be
applied to increase the Certificate Principal Balance of the Subordinate
Certificates, beginning with the Class of Subordinate Certificates with the next
highest payment priority, up to the amount of such Realized Losses previously
allocated to such Class of Certificates pursuant to this Section 5.07 but only
to the extent that any such Applied Loss Amount has not been paid to any Class
of Certificates as a Deferred Amount. Holders of such Certificates will not be
entitled to any payment in respect of current interest on the amount of such
increases for any Accrual Period preceding the Distribution Date on which such
increase occurs. Any such increases shall be applied to the Certificate
Principal Balance of each Class I-A-2 Certificate, Class II-A-3 Certificate or
each Subordinate Certificate of such Class in accordance with its respective
Percentage Interest.

         (e) The REMIC I Marker Allocation Percentage of all Realized Losses on
the Mortgage Loans shall be allocated on each Distribution Date to the following
REMIC I Regular Interests in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC I Regular Interest LTI-AA
and REMIC I Regular Interest LTI-ZZ up to an aggregate amount equal to the REMIC
I Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I
Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LTI-M5 has been reduced to zero; third, to the Uncertificated Principal
Balances of the REMIC I


                                      -94-
<PAGE>

Regular Interest LTI-AA and REMIC I Regular Interest LTI-ZZ up to an aggregate
amount equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%,
respectively; fourth, to the Uncertificated Principal Balances of REMIC I
Regular Interest LTI-AA, REMIC I Regular Interest LTI-M4 and REMIC I Regular
Interest LTI-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC I Regular Interest LTI-M4 has been reduced to zero;
fifth, to the Uncertificated Principal Balances of REMIC I Regular Interest
LTI-AA, REMIC I Regular Interest LTI-M3 and REMIC I Regular Interest LTI-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC I Regular Interest LTI-M3 has been reduced to zero; sixth, to the
Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I
Regular Interest LTI-M2 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LTI-M2 has been reduced to zero; seventh, to the Uncertificated
Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest
LTI-M1 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC I Regular Interest LTI-M1 has been
reduced to zero; eighth, with respect to Realized Losses on the Group I Mortgage
Loans only, to the Uncertificated Principal Balances of REMIC I Regular Interest
LTI-AA, REMIC I Regular Interest LTI-IA2 and REMIC I Regular Interest LTI-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC I Regular Interest LTI-IA2 has been reduced to zero; and ninth, with
respect to Realized Losses on the Group II Mortgage Loans only, to the
Uncertificated Principal Balances of REMIC I Regular Interest LTI-AA, REMIC I
Regular Interest LTI-IIA3 and REMIC I Regular Interest LTI-ZZ, 98%, 1% and 1%,
respectively, until the Certificate Principal Balance of REMIC I Regular
Interest LTI-IIA3 has been reduced to zero.

         The REMIC I Sub WAC Allocation Percentage of all Realized Losses on the
Mortgage Loans shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Principal Balance of
each REMIC I Regular Interest ending with the designation "GRP" equal to 0.01%
of the aggregate Stated Principal Balance of the Mortgage Loans in the related
Loan Group; second, to each REMIC I Regular Interest ending with the designation
"SUB," so that the Uncertificated Balance of each such REMIC I Regular Interest
is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the current Certificate
Principal Balance of the Senior Certificate in the related Loan Group (except
that if any such excess is a larger number than in the preceding distribution
period, the least amount of Realized Losses shall be applied to such REMIC I
Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining Realized Losses shall be allocated to
REMIC I Regular Interest LTI-XX.

         Section 5.08 PREPAYMENT CHARGES.

         On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
and deposited in the Distribution Account will be withdrawn from the
Distribution Account and distributed by the Trustee in accordance with the
Remittance Report to the Class P Certificates and shall not be available for
distribution to the holders of any other Class of Certificates. The payment of
such Prepayment Charges shall not reduce the Certificate Principal Balance of
the Class P Certificates.



                                      -95-
<PAGE>

         Section 5.09 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.

         (a) Not later than each Distribution Date, the Trustee shall prepare
and make available to each Holder of Certificates, the Depositor and the Credit
Risk Manager via its website a statement setting forth for the Certificates with
respect to the related Mortgage Loans and related Certificates:

                  (i) the amount of the related distribution to Holders of each
         Class allocable to principal, separately identifying (A) the aggregate
         amount of any Principal Prepayments included therein, (B) the aggregate
         of all scheduled payments of principal included therein, (C) the
         Monthly Excess Interest with respect to the Certificates (if any) and
         (D) the amount of Prepayment Charges distributed to the Class P
         Certificates;

                  (ii) the amount of such distribution to Holders of each Class
         allocable to interest;

                  (iii) the Certificate Principal Balance of each Class of
         Certificates, if applicable, after giving effect (i) to all
         distributions allocable to principal on such Distribution Date and (ii)
         the allocation of any Realized Losses for such Distribution Date;

                  (iv) the aggregate of the Stated Principal Balances of all of
         the Mortgage Loans in each Loan Group and the aggregate Stated
         Principal Balance of the Mortgage Loans, in each case for the following
         Distribution Date;

                  (v) the amount of the Servicing Fees paid to or retained by
         the Servicer for the related Due Period;

                  (vi) the Pass-Through Rate for each Class of Certificates with
         respect to the current Accrual Period;

                  (vii) the cumulative amount of Realized Losses to date and, in
         addition, if the Certificate Principal Balance of any Class of
         Certificates has been reduced to zero, the cumulative amount of any
         Realized Losses that have not been allocated to any Class of
         Certificates;

                  (viii) the number and aggregate principal amounts of Mortgage
         Loans in each Loan Group and the Mortgage Loans in the aggregate, (A)
         Delinquent (exclusive of Mortgage Loans in foreclosure and bankruptcy)
         (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, (B) in
         foreclosure and delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3)
         91 or more days and (C) in bankruptcy and delinquent (1) 31 to 60 days,
         (2) 61 to 90 days and (3) 91 or more days, in each case as of the close
         of business on the last day of the calendar month preceding such
         Distribution Date;

                  (ix) with respect to any Mortgage Loan that was liquidated
         during the preceding calendar month, the loan number and Stated
         Principal Balance of, and Realized Loss on, such Mortgage Loan as of
         the close of business on the Determination Date preceding such
         Distribution Date;



                                      -96-
<PAGE>

                  (x) the total number and principal balance of any real estate
         owned or REO Properties in each Loan Group and the Mortgage Loans in
         the aggregate as of the close of business on the Determination Date
         preceding such Distribution Date;

                  (xi) the three month rolling average of the percent equivalent
         of a fraction, the numerator of which is the Aggregate Loan Group
         Balance of the Mortgage Loans in a Loan Group that are 60 days or more
         delinquent or are in bankruptcy or foreclosure or are REO Properties,
         and the denominator of which is the Aggregate Loan Group Balance of all
         of the Mortgage Loans in such Loan Group as of the last day of such
         Distribution Date;

                  (xii) the Realized Losses during the related Prepayment Period
         and the cumulative Realized Losses through the end of the preceding
         month;

                  (xiii) the amount of any Basis Risk Shortfalls;

                  (xiv) amounts payable in respect of the Cap Contract; and

                  (xv) the amount of the Credit Risk Management Fees paid to the
         Credit Risk Manager and the Seller for such Distribution Date.

         The Trustee may make the foregoing monthly statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders via its internet website. The
Trustee's internet website shall initially be located at "www.jpmorgan.com/sfr".
Assistance in using the website can be obtained by calling the Trustee's
customer service desk at (877) 722-1095. Parties that are unable to use the
above distribution options are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Trustee may change the way monthly statements are distributed in order to make
such distributions more convenient or more accessible to the above parties.

         (b) The Trustee's responsibility for making the above information
available to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the Depositor and the Servicer. The
Trustee will make available a copy of each statement provided pursuant to this
Section 5.09 to each Rating Agency.

         (c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished upon request to each Person who at
any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 5.09 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.

         (d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Residual Certificates the applicable Form 1066 and
each applicable Form 1066Q and shall respond promptly to written requests made
not more frequently than quarterly by any Holder of a Residual Certificate with
respect to the following matters:



                                      -97-
<PAGE>

                  (i) The original projected principal and interest cash flows
         on the Closing Date on each Class of regular and residual interests
         created hereunder and on the Mortgage Loans, based on the Prepayment
         Assumption;

                  (ii) The projected remaining principal and interest cash flows
         as of the end of any calendar quarter with respect to each Class of
         regular and residual interests created hereunder and the Mortgage
         Loans, based on the Prepayment Assumption;

                  (iii) The applicable Prepayment Assumption and any interest
         rate assumptions used in determining the projected principal and
         interest cash flows described above;

                  (iv) The original issue discount (or, in the case of the
         Mortgage Loans, market discount) or premium accrued or amortized
         through the end of such calendar quarter with respect to each Class of
         regular or residual interests created hereunder and to the Mortgage
         Loans, together with each constant yield to maturity used in computing
         the same;

                  (v) The treatment of losses realized with respect to the
         Mortgage Loans or the regular interests created hereunder, including
         the timing and amount of any cancellation of indebtedness income of a
         REMIC with respect to such regular interests or bad debt deductions
         claimed with respect to the Mortgage Loans;

                  (vi) The amount and timing of any non-interest expenses of a
         REMIC; and

                  (vii) Any taxes (including penalties and interest) imposed on
         the REMIC, including, without limitation, taxes on "prohibited
         transactions," "contributions" or "net income from foreclosure
         property" or state or local income or franchise taxes.

         The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 9.12.

         Section 5.10 RESERVED.

         Section 5.11 REMIC I ALLOCATIONS.

         (a) On each Distribution Date, the following amounts, in the following
order of priority and in accordance with the Remittance Report, shall be
distributed by REMIC I to REMIC II on account of the REMIC I Regular Interests
or withdrawn from the Distribution Account and distributed to the Holders of the
Class R-I Interest, as the case may be:

                  (i) first, to the Holders of REMIC I Regular Interest LTI-AA,
REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I
Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular
Interest LTI-IIA3, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest
LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC
I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ, pro rata, in an
amount equal to (A) the Uncertificated Accrued Interest for each such REMIC I
Regular Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates. Amounts payable as


                                      -98-
<PAGE>

Uncertificated Accrued Interest in respect of REMIC I Regular Interest LTI-ZZ
shall be reduced and deferred when the REMIC I Overcollateralization Amount is
less than the REMIC I Targeted Overcollateralization Amount, by the lesser of
(x) the amount of such difference and (y) the REMIC I Regular Interest LTI-ZZ
Maximum Interest Deferral Amount and such amount will be payable to the Holders
of REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I
Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular
Interest LTI-IIA3, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest
LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4 and
REMIC I Regular Interest LTI-M5 in the same proportion as the
Overcollateralization Deficiency is allocated to the Corresponding Certificates
and the Uncertificated Principal Balance of REMIC I Regular Interest LTI-ZZ
shall be increased by such amount;

                  (ii) second, to the Holders of REMIC I Regular Interests, in
an amount equal to the remainder of the REMIC I Marker Allocation Percentage of
the Interest Remittance Amount and the Principal Payment Amount for such
Distribution Date after the distributions made pursuant to clause (i) above,
allocated as follows:

                  (A) 98.00% of such remainder (other than amounts payable under
         clause (C) below) to the Holders of REMIC I Regular Interest LTI-AA and
         REMIC I Regular Interest LTI-P, until the Uncertificated Principal
         Balance of such REMIC I Regular Interest is reduced to zero, provided,
         however, that the Uncertificated Principal Balance of REMIC I Regular
         Interest LTI-P shall not be reduced until the Distribution Date in
         February 2010 or any Distribution Date thereafter, at which point such
         amount shall be distributed to REMIC I Regular Interest LTI-P, until
         $100 has been distributed pursuant to this clause;

                           (B) 2.00% of such remainder, first, to the Holders
         REMIC I Regular InterestLTI-IA1, REMIC I Regular Interest LTI-IA2,
         REMIC I Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2,
         REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-M1,
         REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC
         I Regular Interest LTI-M4 and REMIC I Regular Interest LTI-M5, 1% in
         the same proportion as principal payments are allocated to the
         Corresponding Certificates, until the Uncertificated Principal Balances
         of such REMIC I Regular Interests are reduced to zero and second, to
         the Holders of REMIC I Regular Interest LTI-ZZ (other than amounts
         payable under the proviso below), until the Uncertificated Principal
         Balance of such REMIC I Regular Interest is reduced to zero; and

                           (C) any remaining amount to the Holders of the Class
         R Certificates (in respect of the Class R-I Interest).

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC I Regular Interest LTI-AA and REMIC I Regular Interest
LTI-P, in that order and (ii) REMIC I Regular Interest LTI-ZZ, respectively;
provided that REMIC I Regular Interest LTI-P shall not be reduced until the
Distribution Date in February 2010, at which point such amount shall be
distributed to REMIC I Regular Interest LTI-P, until $100 has been distributed
pursuant to this clause.



                                      -99-
<PAGE>

                  (iii) third, to the Holders of REMIC I Regular Interest
LTI-1SUB, REMIC I Regular Interest LTI-1GRP, REMIC I Regular Interest LTI-2SUB,
REMIC I Regular Interest LTI-2GRP and REMIC I Regular Interest LTI-XX, pro rata,
in an amount equal to (A) the Uncertificated Accrued Interest for each such
REMIC I Regular Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates; and

                  (iv) fourth, to the Holders of REMIC I Regular Interests, in
an amount equal to the remainder of the REMIC I Sub WAC Allocation Percentage of
the Interest Remittance Amount and the Principal Payment Amount for such
Distribution Date after the distributions made pursuant to clause (iii) above,
such that distributions of principal shall be deemed to be made to the REMIC I
Regular Interests first, so as to keep the Uncertificated Principal Balance of
each REMIC I Regular Interest ending with the designation "GRP" equal to 0.01%
of the aggregate Stated Principal Balance of the Mortgage Loans in the related
Loan Group; second, to each REMIC I Regular Interest ending with the designation
"SUB," so that the Uncertificated Principal Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group over (y) the current
Certificate Principal Balance of the Senior Certificates in the related Loan
Group (except that if any such excess is a larger number than in the preceding
distribution period, the least amount of principal shall be distributed to such
REMIC I Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and third, any remaining principal to REMIC I Regular Interest
LTI-XX.

         Section 5.12 CLASS P CERTIFICATE ACCOUNT.

         The Trustee shall establish and maintain with itself a separate,
segregated trust account titled "Nomura Asset Acceptance Corporation,
Alternative Loan Trust 2005-AR1 Class P Certificate Account". On the Closing
Date, the Depositor will deposit, or cause to be deposited in the Class P
Certificate Account $100.00. The amount on deposit in the Class P Certificate
Account shall be held uninvested. On the February 2010 Distribution Date, the
Trustee shall withdraw the amount on deposit in the Class P Certificate Account
and remit such amount to the Holders of the Class P Certificates, in reduction
of the Certificate Principal Balance thereof.

         Section 5.13 BASIS RISK SHORTFALL RESERVE FUND.

         (a) The Trustee shall establish a Basis Risk Shortfall Reserve Fund on
behalf of the holders of the Publicly Offered Certificates (other than the Group
I Certificates). The Basic Risk Shortfall Reserve Fund must be an Eligible
Account. The Basis Risk Shortfall Reserve Fund shall be entitled "Basis Risk
Shortfall Reserve Fund, JPMorgan Chase Bank, N.A., as Trustee for the benefit of
holders of Nomura Asset Acceptance Corporation, Mortgage Pass-Through
Certificates, Series 2005-AR1, Class II-A-1, Class II-A-2, Class II-A-3, Class
M-1, Class M-2, Class M-3, Class M-4 and Class M-5". Any payments received by
the Trustee under the Cap Contract shall be deposited into the Basis Risk
Shortfall Reserve Fund for the benefit of the Class II-A-2 Certificates;
provided that the amount of any Excess Cap Payments shall be held for the
benefit of the Class X Certificates and payable as part of the Class X
Distribution Amount for the related Distribution Date. On each Distribution Date
as to which there is a Basis Risk Shortfall payable to any Class of
Certificates, the Trustee shall deposit the amounts pursuant to


                                     -100-
<PAGE>

paragraphs 8, 9, 10, 11, 12 and 13 of Section 5.06(iii) into the Basis Risk
Shortfall Reserve Fund and the Trustee has been directed by the Class X
Certificateholder to distribute such amounts to the Holders of the Publicly
Offered Certificates (other than the Group I Certificates) in the amounts and
priorities set forth in Section 5.06(iii).

         (b) The Basis Risk Shortfall Reserve Fund is an "outside reserve fund"
within the meaning of Treasury Regulation ss.1.860G-2(h) and shall be an asset
of the Trust Fund but not an asset of any REMIC. The Trustee on behalf of the
Trust shall be the nominal owner of the Basis Risk Shortfall Reserve Fund. The
Class X Certificateholders shall be the beneficial owners of the Basis Risk
Shortfall Reserve Fund, subject to the power of the Trustee to transfer amounts
under Section 5.06(iii). Amounts in the Basis Risk Shortfall Reserve Fund shall
be held either uninvested in a trust or deposit account of the Trustee with no
liability for interest or other compensation thereof or, at the written
direction of the Majority Class X Certificateholder, be invested in Permitted
Investments that mature no later than the Business Day prior to the next
succeeding Distribution Date. All net income and gain from such investments
shall be distributed to the Majority Class X Certificateholder, not as a
distribution in respect of any interest in any REMIC, on such Distribution Date.
All amounts earned on amounts on deposit in the Basis Risk Shortfall Reserve
Fund shall be taxable to the Majority Class X Certificateholder. Any losses on
such investments shall be deposited in the Basis Risk Shortfall Reserve Fund by
the Majority Class X Certificateholder out of its own funds immediately as
realized. In the event that the Majority Class X Certificateholder shall fail to
provide investment instructions to the Trustee, the amounts on deposit in the
Basis Risk Shortfall Reserve Fund shall be held uninvested.

         (c) For federal tax return and information reporting, the value of the
right of the holders of the Class II-A-2 Certificates to receive payments from
the Basis Risk Shortfall Reserve Fund in respect of any Basis Risk Shortfall
shall be $35,000. The value of such right with respect to the Publicly Offered
Certificates (other than the Group I Certificates and Class II-A-2 Certificates)
shall be zero.


                                     -101-
<PAGE>


                                   ARTICLE VI

                                THE CERTIFICATES

         Section 6.01 THE CERTIFICATES.

         The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-5. The Publicly Offered Certificates shall be issuable in
registered form, and the Private Certificates shall be issuable in fully
certificated form in the minimum dollar denominations, integral dollar multiples
in excess thereof (except that one Certificate of each Class may be issued in a
different amount which must be in excess of the applicable minimum dollar
denomination) and aggregate dollar denominations as set forth in the following
table:


<TABLE>
<CAPTION>
`                   MINIMUM      INTEGRAL MULTIPLE IN        ORIGINAL CERTIFICATE                  `
    CLASS        DENOMINATION      EXCESS OF MINIMUM          PRINCIPAL BALANCE            PASS-THROUGH RATE
    -----        ------------      -----------------         --------------------          -----------------
<S>               <C>                      <C>                 <C>                    <C>
    I-A-1         $25,000                  $1                  $  69,729,000.00       Class I-A-1 Pass-Through Rate
    I-A-2         $25,000                  $1                  $   7,748,000.00       Class I-A-2 Pass-Through Rate
   II-A-1         $25,000                  $1                  $ 115,800,000.00       Class II-A-1 Pass-Through Rate
   II-A-2         $25,000                  $1                  $ 113,411,000.00       Class II-A-2 Pass-Through Rate
   II-A-3         $25,000                  $1                  $  25,468,000.00       Class II-A-3 Pass-Through Rate
     M-1          $25,000                  $1                  $  21,237,000.00       Class M-1 Pass-Through Rate
     M-2          $25,000                  $1                  $   6,520,000.00       Class M-2 Pass-Through Rate
     M-3          $25,000                  $1                  $   3,726,000.00       Class M-3 Pass-Through Rate
     M-4          $25,000                  $1                  $   3,353,000.00       Class M-4 Pass-Through Rate
     M-5          $25,000                  $1                  $   3,167,787.00       Class M-5 Pass-Through Rate
      X                $1                  $1                  $ 372,581,567.00**     Class X Pass-Through Rate
      P                $1                  $1                  $         100.00       N/A
      R              N/A*                 N/A*                      N/A*              N/A
</TABLE>

*        The Class R Certificates do not have a Certificate Principal Balance,
         but will be issued in minimum Percentage Interests of 20% and integral
         multiples of 5% in excess thereof.

**       Initial notional amount.


         The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer upon the written order of the
Depositor. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Trustee shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such authentication and delivery. No Certificate shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate the countersignature of the Trustee by manual
signature, and such countersignature upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
countersigned and delivered hereunder. All Certificates shall be dated the date
of their countersignature. On the Closing Date, the Trustee shall authenticate
the Certificates to be issued at the written direction of the Depositor, or any
affiliate thereof.


                                     -102-
<PAGE>

         The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.

         Section 6.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND
                      EXCHANGE OF CERTIFICATES.

         (a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 6.09, a Certificate Register for the Trust Fund
in which, subject to the provisions of subsections (b) and (c) below and to such
reasonable regulations as it may prescribe, the Trustee shall provide for the
registration of Certificates and of Transfers and exchanges of Certificates as
herein provided. Upon surrender for registration of Transfer of any Certificate,
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and of
like aggregate Percentage Interest.

         At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.

         No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.

         All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.

         (b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall each certify
to the Trustee in writing the facts surrounding the Transfer in substantially
the forms set forth in Exhibit E (the "Transferor Certificate") and (x) deliver
a letter in substantially the form of either Exhibit F (the "Investment Letter")
or Exhibit G (the "Rule 144A Letter") or (y) there shall be delivered to the
Trustee an Opinion of Counsel, at the expense of the transferor, that such
Transfer may be made pursuant to an exemption from the Securities Act, which
Opinion of Counsel shall not be an expense of the Depositor, the Seller, the
Trustee or the Trust Fund. The Depositor shall provide to any Holder of a
Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy


                                     -103-
<PAGE>

the condition to eligibility set forth in Rule 144A(d)(4) for Transfer of any
such Certificate without registration thereof under the Securities Act pursuant
to the registration exemption provided by Rule 144A. The Trustee shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such Transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor and the Seller 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.

         No Transfer of an ERISA Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA and/or a plan subject to Section 4975 of the
Code, or a Person acting on behalf of any such plan or using the assets of any
such plan, or (ii) in the case of any such ERISA Restricted Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan subject to Section 4975 of the Code (or comparable provisions
of any subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan, an Opinion of Counsel satisfactory to the
Trustee for the benefit of the Trustee, the Depositor and the Servicer and on
which they may rely to the effect that the purchase and holding of such ERISA
Restricted Certificate is permissible under applicable law, will not result in
any prohibited transactions under ERISA or Section 4975 of the Code and will not
subject the Trustee, the Depositor or any Servicer to any obligation in addition
to those expressly undertaken in this Agreement, which Opinion of Counsel shall
not be an expense of the Trustee, the Depositor or any Servicer. Notwithstanding
anything else to the contrary herein, any purported transfer of an ERISA
Restricted Certificate to or on behalf of an employee benefit plan subject to
Section 406 of ERISA and/or a plan subject to Section 4975 of the Code other
than in compliance with the foregoing shall be void and of no effect; provided
that the restriction set forth in this sentence shall not be applicable if there
has been delivered to the Trustee an Opinion of Counsel meeting the requirements
of clause (ii) of the first sentence of this paragraph. The Trustee shall not be
under any liability to any Person for any registration of transfer of any ERISA
Restricted Certificate that is in fact not permitted by this Section 6.02(b) or
for making any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of this
Agreement. The Trustee shall be entitled, but not obligated, to recover from any
Holder of any ERISA Restricted Certificate that was in fact an employee benefit
plan subject to Section 406 of ERISA or a plan subject to Section 4975 of the
Code or a Person acting on behalf of any such plan at the time it became a
Holder or, at such subsequent time as it became such a plan or Person acting on
behalf of such a plan, all payments made on such ERISA Restricted Certificate at
and after either such time. Any such payments so recovered by the Trustee shall
be paid and delivered by the Trustee to the last preceding Holder of such
Certificate that is not such a plan or Person acting on behalf of a plan.

         Each beneficial owner of a Class M-1, Class M-2, Class M-3, Class M-4
or Class M-5 Certificate or any interest therein shall be deemed to have
represented, by virtue of its acquisition or holding of that certificate or
interest therein, that either (i) it is not a Plan or investing with "Plan
Assets", (ii) it has acquired and is holding such certificate in reliance on the
Exemption,



                                     -104-
<PAGE>

and that it understands that there are certain conditions to the availability of
the Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P or Moody's, and the
certificate is so rated or (iii) (1) it is an insurance company, (2) the source
of funds used to acquire or hold the certificate or interest therein is an
"insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60 and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.

         (c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:

                  (i) Each Person holding or acquiring any Ownership Interest in
         a Residual Certificate shall be a Permitted Transferee and shall
         promptly notify the Trustee of any change or impending change in its
         status as a Permitted Transferee.

                  (ii) No Ownership Interest in a Residual Certificate may be
         registered on the Closing Date or thereafter transferred, and the
         Trustee shall not register the Transfer of any Residual Certificate
         unless, in addition to the certificates required to be delivered to the
         Trustee under subparagraph (b) above, the Trustee shall have been
         furnished with an affidavit (a "Transfer Affidavit") of the initial
         owner or the proposed transferee in the form attached hereto as Exhibit
         D.

                  (iii) Each Person holding or acquiring any Ownership Interest
         in a Residual Certificate shall agree (A) to obtain a Transfer
         Affidavit from any other Person to whom such Person attempts to
         Transfer its Ownership Interest in a Residual Certificate, (B) to
         obtain a Transfer Affidavit from any Person for whom such Person is
         acting as nominee, trustee or agent in connection with any Transfer of
         a Residual Certificate and (C) not to Transfer its Ownership Interest
         in a Residual Certificate or to cause the Transfer of an Ownership
         Interest in a Residual Certificate to any other Person if it has actual
         knowledge that such Person is not a Permitted Transferee.

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Residual Certificate in violation of the provisions of
         this Section 6.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Residual Certificate in violation of the
         provisions of this Section 6.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Residual
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Residual Certificate that is in fact
         not permitted by Section 6.02(b) and this Section 6.02(c) or for making
         any payments due on such Certificate to the Holder thereof or taking
         any other action with respect to such Holder under the provisions of
         this Agreement so long as the Transfer was registered after receipt of
         the related Transfer Affidavit. The Trustee shall be entitled but not
         obligated to recover from any Holder of a Residual Certificate that was
         in fact not a Permitted Transferee at the time it became a Holder or,
         at such subsequent time as it became other than a Permitted



                                     -105-
<PAGE>

         Transferee, all payments made on such Residual Certificate at and after
         either such time. Any such payments so recovered by the Trustee shall
         be paid and delivered by the Trustee to the last preceding Permitted
         Transferee of such Certificate.

         The restrictions on Transfers of a Residual Certificate set forth in
this Section 6.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee or the Seller to the effect
that the elimination of such restrictions will not cause any REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.

         (d) The preparation and delivery of all certificates and opinions
referred to above in this Section 6.02 shall not be an expense of the Trust
Fund, the Trustee, the Depositor or the Seller.

         Section 6.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 6.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 6.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time. All Certificates
surrendered to the Trustee under the terms of this Section 6.03 shall be
canceled and destroyed by the Trustee in accordance with its standard procedures
without liability on its part.

         Section 6.04 PERSONS DEEMED OWNERS.

         The Trustee and any agent of the Trustee may treat the person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and neither the Trustee nor any agent of the Trustee
shall be affected by any notice to the contrary.



                                     -106-
<PAGE>

         Section 6.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.

         If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor shall request such information in writing from the Trustee, then the
Trustee shall, within ten Business Days after the receipt of such request,
provide the Depositor or such Certificateholders at such recipients' expense the
most recent list of the Certificateholders of the Trust Fund held by the
Trustee, if any. The Depositor and every Certificateholder, by receiving and
holding a Certificate, agree that the Trustee shall not be held accountable by
reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.

         Section 6.06 BOOK-ENTRY CERTIFICATES.

         The Certificates, other than the Class X, Class P and Class R
Certificates upon original issuance, shall be issued in the form of one or more
typewritten Certificates representing the Book-Entry Certificates, to be
delivered to the Depository by or on behalf of the Depositor. Such Certificates
shall initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner of such Certificates will
receive a definitive certificate representing such Certificate Owner's interest
in such Certificates, except as provided in Section 6.08. Unless and until
definitive, fully registered Certificates ("Definitive Certificates") have been
issued to the Certificate Owners of such Certificates pursuant to Section 6.08:

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

         (b) the Depositor and the Trustee may deal with the Depository and the
Depository Participants for all purposes (including the making of distributions)
as the authorized representative of the respective Certificate Owners of such
Certificates;

         (c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;

         (d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 6.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;

         (e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;

         (f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and (g) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
shall control.



                                     -107-
<PAGE>

         For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.

         Section 6.07 NOTICES TO DEPOSITORY.

         Whenever any notice or other communication is required to be given to
Certificateholders of a Class with respect to which Book-Entry Certificates have
been issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, the Trustee shall give all such notices and
communications to the Depository.

         Section 6.08 DEFINITIVE CERTIFICATES.

         If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor or the Depository advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an Event
of Default, Certificate Owners of such Book-Entry Certificates having not less
than 51% of the Voting Rights evidenced by any Class of Book-Entry Certificates
advise the Trustee and the Depository in writing through the Depository
Participants that the continuation of a book-entry system with respect to
Certificates of such Class through the Depository (or its successor) is no
longer in the best interests of the Certificate Owners of such Class, then the
Trustee shall notify all Certificate Owners of such Certificates, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to applicable Certificate Owners requesting the same.
The Depositor shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon surrender to the Trustee of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall countersign and deliver such Definitive Certificates. Neither
the Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and each may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of such Definitive
Certificates as Certificateholders hereunder.

         Section 6.09 MAINTENANCE OF OFFICE OR AGENCY.

         The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies at 2001 Bryan Street, 8th Floor, Dallas,
Texas, 75201, Attention: ITS Transfer


                                     -108-
<PAGE>

Department, Nomura Asset Acceptance Corporation, 2005-AR1 where Certificates may
be surrendered for registration of transfer or exchange. The Trustee will give
prompt written notice to the Certificateholders of any change in such location
of any such office or agency.



                                     -109-
<PAGE>


                                  ARTICLE VII

                         THE DEPOSITOR AND THE SERVICER

         Section 7.01 LIABILITIES OF THE DEPOSITOR AND THE SERVICER.

         Each of the Depositor and the Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by it herein.

         Section 7.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE SERVICER.

         (a) Each of the Depositor and the Servicer will keep in full force and
effect its rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.

         (b) Any Person into which the Depositor or any Servicer may be merged
or consolidated, or any corporation resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Servicer shall be the
successor of the Depositor or the Servicer hereunder, without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

         Section 7.03 INDEMNIFICATION OF DEPOSITOR AND THE SERVICER.

         (a) The Depositor agrees to indemnify the Indemnified Persons for, and
to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to this Agreement or the Certificates (i) related to the Depositor's
failure to perform its duties in compliance with this Agreement (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or (ii) incurred by reason of the Depositor's willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder. This indemnity
shall survive the resignation and the termination of this Agreement.

         (b) The Servicer agrees to indemnify the Indemnified Persons for, and
to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to the Servicer's gross negligence in the performance of its duties
under this Agreement or failure to service the Mortgage Loans in material
compliance with the terms of this Agreement and for a material breach of any
representation, warranty or covenant of the Servicer contained herein. The
Servicer shall immediately notify the Trustee if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, assume (with the
consent of the


                                     -110-
<PAGE>

Trustee and with counsel reasonably satisfactory to the Trustee) the defense of
any such claim and pay all expenses in connection therewith, including counsel
fees, and promptly appeal or pay, discharge and satisfy any judgment or decree
which may be entered against it or any Indemnified Person in respect of such
claim but failure to so notify the Servicer shall not limit its obligations
hereunder. The Servicer agrees that it will not enter into any settlement of any
such claim without the consent of the Indemnified Persons unless such settlement
includes an unconditional release of such Indemnified Persons from all liability
that is the subject matter of such claim. The provisions of this Section 7.03(b)
shall survive termination of this Agreement.

         Section 7.04 LIMITATIONS ON LIABILITY OF THE DEPOSITOR, THE SERVICER
AND OTHERS.

         Subject to the obligation of the Depositor and the Servicer to
indemnify the Indemnified Persons pursuant to Section 7.03:

         (a) Neither the Depositor, the Servicer nor any of the directors,
officers, employees or agents of the Depositor and the Servicer shall be under
any liability to the Indemnified Persons, the Trust Fund or the
Certificateholders for taking any action or for refraining from taking any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicer or any such Person against any breach of warranties or representations
made herein or any liability which would otherwise be imposed by reason of such
Person's willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of obligations and duties
hereunder.

         (b) The Depositor, the Servicer and any director, officer, employee or
agent of the Depositor and the Servicer may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder.

         (c) The Depositor, the Servicer, the Trustee, the Custodian and any
director, officer, employee or agent of the Depositor, the Servicer, the Trustee
or the Custodian shall be indemnified by the Trust Fund and held harmless
thereby against any loss, liability or either expense (including reasonable
legal fees and disbursements of counsel) incurred on their part that may be
sustained in connection with, arising out of, or related to, any claim or legal
action (including any pending or threatened claim or legal action) relating to
this Agreement or the Certificates, other than (i) with respect to the Servicer,
such loss, liability or expense related to the Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) or, with
respect to the Custodian, to the Custodian's failure to perform its duties
hereunder, (ii) with respect to the Servicer, any such loss, liability or
expense incurred by reason of the Servicer's willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or (iii) with
respect to the Custodian, any such loss, liability or expense incurred by reason
of the Custodian's willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder.

         (d) Neither the Depositor nor the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties under this Agreement and that in its opinion may
involve it in any expense or liability; provided, however, the Trustee may in
its discretion, undertake any such action which it may deem necessary or
desirable with


                                     -111-
<PAGE>

respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Trustee shall be
entitled to be reimbursed therefor out of the Distribution Account as provided
by Section 4.05. Nothing in this Subsection 7.04(d) shall affect the Trustee's
obligation to take such actions as are necessary to ensure the servicing and
administration of the Mortgage Loans pursuant to this Agreement.

         (e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Trustee shall not be required to investigate or make recommendations concerning
potential liabilities which the Trust might incur as a result of such course of
action by reason of the condition of the Mortgaged Properties.

         (f) The Trustee shall not be liable for any acts or omissions of the
Servicer, the Depositor or the Custodian.

         Section 7.05 SERVICER NOT TO RESIGN.

         The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon the determination that its duties hereunder are no
longer permissible under applicable law or the performance of such duties are no
longer possible in order to comply with applicable law and such incapacity or
impossibility cannot be cured by the Servicer. Any determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee which Opinion of Counsel shall be in form and
substance acceptable to the Trustee. No appointment of a successor to the
Servicer shall be effective hereunder unless (a) the Rating Agencies have
confirmed in writing that such appointment will not result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Certificates, (b) such successor shall have represented that it is meets the
eligibility criteria set forth in Section 8.02 and (c) such successor has agreed
to assume the obligations of the Servicer hereunder to the extent of the
Mortgage Loans. The Servicer shall provide a copy of the written confirmation of
the Rating Agencies and the agreement executed by such successor to the Trustee.
No such resignation shall become effective until a Qualified Successor or the
Trustee shall have assumed the Servicer's responsibilities and obligations
hereunder. The Servicer shall notify the Trustee and the Rating Agencies of its
resignation.

         Section 7.06 TERMINATION OF SERVICER WITHOUT CAUSE; APPOINTMENT OF
SPECIAL SERVICER.

         (a) The Seller may, at its option, terminate the servicing
responsibilities of GMAC Mortgage Corporation as Servicer hereunder with respect
to the Mortgage Loans without cause. No such termination shall become effective
unless and until a successor to GMAC Mortgage Corporation shall have been
appointed to service and administer the related Mortgage Loans pursuant to the
terms and conditions of this Agreement. No appointment shall be effective unless
(i) such successor to GMAC Mortgage Corporation meets the eligibility criteria
contained in Section 8.02, (ii) the Trustee shall have consented to such
appointment, (iii) the Rating Agencies have confirmed in writing that such
appointment will not result in a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates, (iv) such successor has
agreed to assume the obligations of GMAC Mortgage Corporation hereunder to


                                     -112-
<PAGE>

the extent of the Mortgage Loans and (v) all amounts reimbursable to GMAC
Mortgage Corporation pursuant to the terms of this Agreement shall have been
paid to GMAC Mortgage Corporation by the successor appointed pursuant to the
terms of this Section 7.06 or by the Seller including without limitation, all
unreimbursed Advances and Servicing Advances made by GMAC Mortgage Corporation
and all out-of-pocket expenses of GMAC Mortgage Corporation incurred in
connection with the transfer of servicing to such successor. The Seller shall
provide a copy of the written confirmation of the Rating Agencies and the
agreement executed by such successor to the Trustee.

         (b) In addition, the Seller may, at its option, appoint a special
servicer with respect to certain of the Mortgage Loans. The Seller and GMAC
Mortgage Corporation shall negotiate in good faith with any proposed special
servicer with respect to the duties and obligations of such special servicer
with respect to any such Mortgage Loan. Any subservicing agreement shall contain
terms and provisions acceptable to the Trustee and shall obligate the special
servicer to service such Mortgage Loans in accordance with Accepted Servicing
Practices. The fee payable to the special servicer for the performance of such
duties and obligations will paid from the Servicing Fee collected by GMAC
Mortgage Corporation with respect to each such Mortgage Loan and will be
remitted to such special servicer by GMAC Mortgage Corporation.


                                     -113-
<PAGE>

                                  ARTICLE VIII

                        DEFAULT; TERMINATION OF SERVICER

         Section 8.01 SERVICER DEFAULT.

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

                  (i) any failure to remit to the Trustee any payment required
to be made under the terms of this Agreement which continues unremedied for a
period of three Business Days; or

                  (ii) failure duly to observe or perform in any material
respect any other of the covenants or agreements set forth in this Agreement,
the breach of which has a material adverse effect and which continue unremedied
for a period of sixty days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee; or

                  (iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or

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

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

                  (vi) the Servicer attempts to assign its right to servicing
compensation hereunder (other than any payment by the Servicer of any portion of
the Servicing Fee to the Seller as provided in a separate side letter between
the Seller and the Servicer) or the Servicer attempts to sell or otherwise
dispose of all or substantially all of its property or assets or to assign this
Agreement or the servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof except, in each case as otherwise permitted
herein; or

                  (vii) the Servicer ceases to be qualified to transact business
in any jurisdiction where it is currently so qualified, but only to the extent
such non-qualification materially and adversely affects the Servicer's ability
to perform its obligations hereunder; or

         then, and in each and every such case, so long as a Servicer Default
shall not have been remedied, the Trustee, by notice in writing to the Servicer
shall with respect to a payment default


                                     -114-
<PAGE>

by the Servicer pursuant to Section 8.01(i) and, upon the occurrence and
continuance of any other Servicer Default, may, and, at the written direction of
Certificateholders evidencing not less than 25% of the Voting Rights shall, in
addition to whatever rights the Trustee on behalf of the Certificateholders may
have under Section 7.03 and at law or equity to damages, including injunctive
relief and specific performance, terminate all the rights and obligations of the
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof without compensating the Servicer for the same. On or after the receipt
by the Servicer of such written notice, all authority and power of the Servicer
under this Agreement whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee. Upon written request from the
Trustee, the Servicer shall prepare, execute and deliver, any and all documents
and other instruments, place in the Trustee's possession all Mortgage Files
relating to the related Mortgage Loans, and do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise, at the Servicer's sole
expense. The defaulting Servicer shall cooperate with the Trustee in effecting
the termination of its responsibilities and rights hereunder including, without
limitation, the transfer to such successor for administration by it of all cash
amounts which shall at the time be credited by the defaulting Servicer to the
Custodial Account or Escrow Accounts or thereafter received with respect to the
Mortgage Loans or any related REO Property (provided, however, that the
defaulting Servicer shall continue to be entitled to receive all amounts accrued
or owing to it under this Agreement on or prior to the date of such termination,
whether in respect of Advances, Servicing Advances, accrued and unpaid Servicing
Fees or otherwise, and shall continue to be entitled to the benefits of Section
7.04, notwithstanding any such termination, with respect to events occurring
prior to such termination). The Trustee shall not have knowledge of a Servicer
Default unless a Responsible Officer of the Trustee has actual knowledge or
unless written notice of any Servicer Default is received by the Trustee at its
Corporate Trust Office and such notice references the Certificates, the Trust
Fund or this Agreement.

         Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

         On and after the time the Servicer receives a notice of termination
pursuant to Section 8.01, the Trustee shall automatically become the successor
to the Servicer with respect to the transactions set forth or provided for
herein and after a transition period (not to exceed 90 days), shall be subject
to all the responsibilities, duties and liabilities relating thereto placed on
the Servicer by the terms and provisions hereof and applicable law including the
obligation to make Advances pursuant to Article VI hereof except as otherwise
provided herein; provided, however, that the Trustee's obligation to make
Advances in its capacity as Successor Servicer shall not be subject to such 90
day transition period and the Trustee in such capacity will make any Advance
required to be made by the predecessor Servicer on the Distribution Date on
which the predecessor Servicer was required to make such Advance. Effective on
the date of such notice of termination, as compensation therefor, the Trustee
shall be entitled to all fees, costs and expenses relating to the Mortgage Loans
that the terminated Servicer would have been entitled to if it had continued to
act hereunder, provided, however, that the Trustee shall not be (i) liable for
any acts or omissions of the terminated Servicer, (ii) obligated to make
Advances if it is prohibited from doing so under applicable law or determines
that such Advance, if made, would constitute a Nonrecoverable Advance, (iii)
responsible for expenses of the terminated Servicer pursuant to Section 2.03 or
(iv) obligated to deposit losses on any Permitted Investment directed by the


                                     -115-
<PAGE>

terminated Servicer. Notwithstanding the foregoing, the Trustee may, if it shall
be unwilling to so act, or shall, if it is prohibited by applicable law from
making Advances pursuant to Article VI or if it is otherwise unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any Successor Servicer shall (i) be an institution that is a Fannie
Mae and Freddie Mac approved seller/servicer in good standing, that has a net
worth of at least $15,000,000 and (ii) be willing to act as successor servicer
of any Mortgage Loans under this Agreement and shall have executed and delivered
to the Depositor and the Trustee an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the terminated Servicer
(other than any liabilities of the terminated Servicer hereof incurred prior to
termination of the Servicer under Section 8.01), with like effect as if
originally named as a party to this Agreement, provided that each Rating Agency
shall have acknowledged in writing that its rating of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified or
reduced as a result of such assignment and delegation. If the Trustee assumes
the duties and responsibilities of the Servicer in accordance with this Section
8.02, the Trustee shall not resign as Servicer until a Successor Servicer has
been appointed and has accepted such appointment. Pending appointment of a
successor to the terminated Servicer hereunder, the Trustee, unless the Trustee
is prohibited by law from so acting, shall, subject to Section 4.04 hereof, act
in such capacity as hereinabove provided. In connection with such appointment
and assumption, the Trustee may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans or otherwise as it and such
successor shall agree; provided that no such compensation shall be in excess of
that permitted the terminated Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other Successor
Servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused by the failure of the Servicer
to deliver or provide, or any delay in delivering or providing, any cash,
information, documents or records to it.

         The costs and expenses of the Trustee in connection with the
termination of the Servicer, appointment of a Successor Servicer and, if
applicable, any transfer of servicing, including, without limitation, all costs
and expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee or the Successor Servicer to service the
Mortgage Loans properly and effectively, to the extent not paid by the
terminated Servicer as may be required herein, shall be payable to the Trustee
from the Distribution Account pursuant to Section 4.07. Any successor to the
terminated Servicer as successor servicer under this Agreement shall give notice
to the applicable Mortgagors of such change of servicer and shall, during the
term of its service as successor servicer maintain in force the policy or
policies that the terminated Servicer is required to maintain pursuant to
Section 3.04.



                                     -116-
<PAGE>

         Section 8.03 NOTIFICATION TO CERTIFICATEHOLDERS.

         (a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.

         (b) Within 60 days after the occurrence of any Servicer Default, the
Trustee shall transmit by mail to all Certificateholders notice of each the
Servicer Default hereunder known to the Trustee, unless such default shall have
been cured or waived.

         Section 8.04 WAIVER OF SERVICER DEFAULTS.

         The Trustee may waive only by written notice from Certificateholders
evidencing 66-2/3 of the Voting Rights (unless such default materially and
adversely affects all Certificateholders, in which case the written direction
shall be from all of the Certificateholders) any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any such
waiver of a past default, such default shall cease to exist, and any Servicer
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived in writing.



                                     -117-
<PAGE>


                                   ARTICLE IX

                    CONCERNING THE TRUSTEE AND THE CUSTODIAN

         Section 9.01 DUTIES OF TRUSTEE.

         (a) The Trustee, prior to the occurrence of a Servicer Default, and
after the curing or waiver of all Servicer Defaults, which may have occurred
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee. If a Servicer Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and the same degree of
care and skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of such Person's own affairs.

         (b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee pursuant to any provision of this
Agreement, the Trustee shall examine them to determine whether they are in the
form required by this Agreement; provided, however, that the Trustee shall not
be responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Servicer.

         (c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 5.04, 5.06 and 10.01 based the
applicable Remittance Report.

         (d) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:

                  (i) Prior to the occurrence of a Servicer Default and after
         the curing or waiver of all the Servicer Defaults which may have
         occurred with respect to the Trustee, the duties and obligations of the
         Trustee shall be determined solely by the express provisions of this
         Agreement, the Trustee shall not be liable except for the performance
         of their respective duties and obligations as are specifically set
         forth in this Agreement, no implied covenants or obligations shall be
         read into this Agreement against the Trustee and, in the absence of bad
         faith on the part of the Trustee, the Trustee may conclusively rely and
         shall be fully protected in acting or refraining from acting, as to the
         truth of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee and
         conforming to the requirements of this Agreement;

                  (ii) The Trustee shall not be liable in its individual
         capacity for an error of judgment made in good faith by a Responsible
         Officer or Responsible Officers of the Trustee unless it shall be
         proved that the Trustee was negligent in ascertaining the pertinent
         facts;

                  (iii) The Trustee shall not be liable with respect to any
         action taken, suffered or omitted to be taken by it in good faith and
         believed by it to be authorized or within the


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         rights or powers conferred upon it by this Agreement or in accordance
         with the directions of the Holders of Certificates evidencing not less
         than 25% of the aggregate Voting Rights of the Certificates, if such
         action or non-action relates to the time, method and place of
         conducting any proceeding for any remedy available to the Trustee or
         exercising any trust or other power conferred upon the Trustee under
         this Agreement;

                  (iv) The Trustee shall not be required to take notice or be
         deemed to have notice or knowledge of any default or Servicer Default
         unless a Responsible Officer of the Trustee shall have actual knowledge
         thereof. In the absence of such notice, the Trustee may conclusively
         assume there is no such default or Servicer Default;

                  (v) The Trustee shall not in any way be liable by reason of
         any insufficiency in any Account held by or in the name of Trustee
         unless it is determined by a court of competent jurisdiction that the
         Trustee's gross negligence or willful misconduct was the primary cause
         of such insufficiency (except to the extent that the Trustee is obligor
         and has defaulted thereon);

                  (vi) Anything in this Agreement to the contrary
         notwithstanding, in no event shall the Trustee be liable for special,
         indirect, punitive or consequential loss or damage of any kind
         whatsoever (including but not limited to lost profits), even if the
         Trustee has been advised of the likelihood of such loss or damage and
         regardless of the form of action and whether or not any such damages
         were foreseeable or contemplated; and

                  (vii) None of the Seller, the Depositor or the Trustee shall
         be responsible for the acts or omissions of the other, it being
         understood that this Agreement shall not be construed to render them
         partners, joint venturers or agents of one another.

The Trustee shall not be required to expend or risk its own funds or otherwise
incur liability, financial or otherwise, in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the terminated Servicer hereunder.

                  (e) All funds received by the Trustee and required to be
deposited in the Distribution Account pursuant to this Agreement will be
promptly so deposited by the Trustee.

         Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.

         (a) Except as otherwise provided in Section 9.01:

                  (i) The Trustee may conclusively rely and shall be fully
         protected in acting or refraining from acting in reliance on any
         resolution or certificate of the Seller, the Depositor or the Servicer,
         any certificates of auditors or any other certificate, statement,
         instrument, opinion, report, notice, request, consent, order,
         appraisal, bond or other paper or document believed by it to be genuine
         and to have been signed or presented by the proper party or parties;



                                     -119-
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                  (ii) The Trustee may consult with counsel and any advice of
         such counsel or any Opinion of Counsel shall be full and complete
         authorization and protection with respect to any action taken or
         suffered or omitted by it hereunder in good faith and in accordance
         with such advice or Opinion of Counsel:

                  (iii) The Trustee shall not be under any obligation to
         exercise any of the trusts or powers vested in it by this Agreement,
         other than its obligation to give notices pursuant to this Agreement,
         or to institute, conduct or defend any litigation hereunder or in
         relation hereto at the request, order or direction of any of the
         Certificateholders pursuant to the provisions of this Agreement, unless
         such Certificateholders shall have offered to the Trustee reasonable
         security or indemnity satisfactory to it against the costs, expenses
         and liabilities which may be incurred therein or thereby. Nothing
         contained herein shall, however, relieve the Trustee of the obligation,
         upon the occurrence of a Servicer Default of which a Responsible
         Officer of the Trustee has actual knowledge (which has not been cured
         or waived), to exercise such of the rights and powers vested in it by
         this Agreement, and to use the same degree of care and skill in their
         exercise, as a prudent person would exercise under the circumstances in
         the conduct of his own affairs;

                  (iv) The Trustee shall not be liable in its individual
         capacity for any action taken, suffered or omitted by it in good faith
         and believed by it to be authorized or within the discretion or rights
         or powers conferred upon it by this Agreement;

                  (v) The Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, consent,
         order, approval, bond or other paper or document, unless requested in
         writing to do so by Holders of Certificates evidencing not less than
         25% of the aggregate Voting Rights of the Certificates and provided
         that the payment within a reasonable time to the Trustee of the costs,
         expenses or liabilities likely to be incurred by it in the making of
         such investigation is, in the opinion of the Trustee reasonably assured
         to the Trustee by the security afforded to it by the terms of this
         Agreement. The Trustee may require reasonable indemnity against such
         expense or liability as a condition to taking any such action. The
         reasonable expense of every such examination shall be paid by the
         Certificateholders requesting the investigation;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or through
         Affiliates, nominees, custodians, agents or attorneys. The Trustee
         shall not be liable or responsible for the misconduct or negligence of
         any of the Trustee's agents or attorneys or paying agent appointed
         hereunder by the Trustee with due care;

                  (vii) Should the Trustee deem the nature of any action
         required on its part to be unclear, the Trustee may require prior to
         such action that it be provided by the Depositor with reasonable
         further instructions; the right of the Trustee to perform any
         discretionary act enumerated in this Agreement shall not be construed
         as a duty, and the Trustee shall not be accountable for other than its
         negligence or willful misconduct in the performance of any such act;



                                     -120-
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                  (viii) The Trustee shall not be required to give any bond or
         surety with respect to the execution of the trust created hereby or the
         powers granted hereunder;

                  (ix) The Trustee shall not have any duty to conduct any
         affirmative investigation as to the occurrence of any condition
         requiring the repurchase of any Mortgage Loan by any Person pursuant to
         this Agreement, or the eligibility of any Mortgage Loan for purposes of
         this Agreement; and

                  (x) The Trustee shall have no duty hereunder with respect to
         any complaint, claim, demand, notice or other document it may receive
         or which may be alleged to have been delivered or served upon it by the
         parties as a consequence of the assignment of any Mortgage Loan
         hereunder; provided, however that the Trustee shall promptly remit to
         the Servicer upon receipt any such complaint, claim, demand, notice or
         other document (i) which is delivered to the Trustee at is Corporate
         Trust Office, (ii) of which a Responsible Officer has actual knowledge
         or (iii) which contains information sufficient to permit the Trustee to
         make a determination that the real property to which such document
         relates is a Mortgaged Property.

         (b) The Trustee is hereby directed by the Depositor to execute the Cap
Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap Contract,
including, without limitation, the representations and warranties contained
therein. Any funds payable by the Trustee under the Cap Contract at closing
shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contract, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contract.

         Section 9.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.

         The recitals contained herein and in the Certificates (other than the
signature and authentication of the Trustee on the Certificates) shall be taken
as the statements of the Depositor, and the Trustee shall not have any
responsibility for their correctness. The Trustee does not make any
representation as to the validity or sufficiency of the Certificates (other than
the signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan except as expressly provided in Sections 2.02 and 2.06; provided,
however, that the foregoing shall not relieve the Custodian of the obligation to
review the Mortgage Files pursuant to Sections 2.02 and 2.05 of this Agreement.
The Trustee's signature and authentication (or authentication of its agent) on
the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
The Trustee shall not be accountable for the use or application by the Depositor
of any of the Certificates or of the proceeds of such Certificates, or for the
use or application of any funds paid to the Depositor with respect to the
Mortgage Loans. The Trustee (other than in its capacity as Custodian and on such
capacity, subject to the provisions of Section 2.06) shall not be responsible
for the legality or validity of this Agreement or any document or instrument
relating to this Agreement, the validity of the execution of this Agreement or
of any supplement hereto or instrument of further assurance, or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
hereunder or intended to be issued hereunder. The Trustee shall not at any time
have any responsibility or liability for or with respect to the legality,
validity and


                                     -121-
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enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. The Trustee shall not have any responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to record this Agreement.

         Section 9.04 TRUSTEE MAY OWN CERTIFICATES.

         The Trustee in its individual capacity or in any capacity other than as
Trustee hereunder may become the owner or pledgee of any Certificates with the
same rights it would have if it were not the Trustee and may otherwise deal with
the parties hereto.

         Section 9.05 TRUSTEE'S COMPENSATION AND EXPENSES; INDEMNIFICATION.

         (a) As compensation for the performance of its obligations under this
Agreement, the Trustee shall be entitled to all income and gain realized from
any investment of funds in the Distribution Account.

         In addition, the Trustee will be entitled to recover from the
Distribution Account pursuant to Section 4.07 all reasonable out-of-pocket
expenses, disbursements and advances and the expenses of the Trustee in
connection with the performance of its duties and obligations hereunder or under
any related documents, any Servicer Default, any breach of this Agreement or any
claim or legal action (including any pending or threatened claim or legal
action) incurred or made by the Trustee in the administration of the trusts
hereunder (including the reasonable compensation, expenses and disbursements of
its counsel) except any such expense, disbursement or advance as may arise from
its negligence or intentional misconduct. If funds in the Distribution Account
are insufficient therefor, the Trustee shall recover such expenses from the
Seller. Such compensation and reimbursement obligation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust. The rights of the Trustee under this Section 9.05 shall survive the
termination of this Agreement and the resignation or removal of the Trustee.

         (b) The Trustee and its directors, officers, agents and employees shall
be indemnified and held harmless by the Trust Fund against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by or asserted
against it or them in any way directly or indirectly relating to or arising out
of the transactions contemplated by this Agreement or any other agreement
entered into in connection herewith, including, but not limited to, the Mortgage
Loan Purchase Agreement assigned to the Trust pursuant to this Agreement or any
action taken or not taken by it or them hereunder or in connection herewith
except to the extent caused by the Trustee's negligence or willful misconduct.
The indemnification provided for under this Section 9.05 shall survive the
termination of this Agreement and the resignation or removal of the Trustee.

         The Trustee and its directors, officers, agents and employees shall be
indemnified and held harmless by the Trust Fund from and against any and all
claims, demands, losses, penalties,



                                     -122-
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liabilities, costs, damages, injuries and expenses, including, without
limitation, reasonable attorneys' fees and expenses, suffered or sustained by
the Trustee, either directly or indirectly, relating to or arising out of any
environmental law or regulation of the United States or any state thereof,
including, without limitation, any judgment, award, settlement, reasonable
attorneys' fees and expenses and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim.

         Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.

         The Trustee and any successor Trustee shall during the entire duration
of this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus and undivided profits of at least
$40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of the
Trustee, rated "BBB" or higher by Fitch Ratings with respect to their long-term
rating and rated "A-1" or higher by Standard & Poor's and "Baa2" or higher by
Moody's with respect to any outstanding long-term unsecured unsubordinated debt,
and, in the case of a successor Trustee other than pursuant to Section 9.10,
rated in one of the two highest long-term debt categories of, or otherwise
acceptable to, each of the Rating Agencies. If the Trustee publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 9.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 9.08.

         Section 9.07 INSURANCE.

         The Custodian hereunder, at its own expense, shall at all times
maintain and keep in full force and effect such insurance in amounts, with
standard coverage and subject to deductibles, as are customary for insurance
typically maintained by banks which act as custodians but, in any event not less
than that required by Fannie Mae. Evidence of such insurance shall be furnished
to any Certificateholder upon reasonable written request.

         Section 9.08 RESIGNATION AND REMOVAL OF TRUSTEE.

         The Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Depositor and the Seller,
with a copy to the Rating Agencies. Upon receiving such notice of resignation,
the Depositor shall promptly appoint a successor trustee by written instrument,
in triplicate, one copy of which instrument shall be delivered to the resigning
trustee and the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation or removal, the resigning or removed Trustee may petition
any court of competent jurisdiction for the appointment of a successor trustee.

         If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 hereof and shall fail to resign after
written request thereto by the Depositor, (ii)


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the Trustee shall become incapable of acting, or shall be adjudged as bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, or (iii)(A) a tax is imposed with respect to the Trust Fund by any
state in which the Trustee or the Trust Fund is located, (B) the imposition of
such tax would be avoided by the appointment of a different trustee and (C) the
Trustee fails to indemnify the Trust Fund against such tax, then the Depositor
may remove the Trustee and appoint a successor trustee by written instrument, in
multiple copies, a copy of which instrument shall be delivered to the Trustee
and the successor trustee.

         The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in multiple copies, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor trustee to the Trustee so
removed and the successor trustee so appointed. Notice of any removal of the
Trustee shall be given to each Rating Agency by the Trustee or successor
trustee.

         Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 10.09 hereof.

         Section 9.09 SUCCESSOR TRUSTEE.

         Any successor trustee appointed as provided in Section 9.08 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee an instrument accepting such appointment hereunder and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein.

         No successor trustee shall accept appointment as provided in this
Section 9.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 9.07 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 9.09, the successor trustee shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates. If the successor trustee
fails to mail such notice within ten days after acceptance of appointment, the
Depositor shall cause such notice to be mailed at the expense of the Trust Fund.

         Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE.

         Any corporation, state bank or national banking association into which
the Trustee may be merged or converted or with which it may be consolidated or
any corporation, state bank or national banking association resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation, state bank or national banking association succeeding to
substantially all of the corporate trust business of the Trustee or shall be the


                                     -124-
<PAGE>

successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 9.06 without the execution or filing of
any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

         Section 9.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Trustee shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 9.11, such
powers, duties, obligations, rights and trusts as the 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
9.06 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 9.09.

         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 Trustee, except for the obligation of the Trustee as
         Successor Servicer under this Agreement to advance funds on behalf of
         the terminated Servicer, shall be conferred or imposed upon and
         exercised or performed by the 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 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
         (whether a Trustee hereunder or as a Successor Servicer hereunder), the
         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 Fund 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 Trustee;

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

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

         Any notice, request or other writing given to the 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 IX. 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 Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of


                                     -125-
<PAGE>

this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Depositor. The Trust Fund shall pay
associated fees and expenses.

         Any separate trustee or co-trustee may, at any time, constitute the
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
Agreement 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
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

         Section 9.12 TAX MATTERS.

         It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
qualifies as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of the Trust Fund. The Trustee, as
agent on behalf of the Trust Fund, shall do or refrain from doing, as
applicable, the following: (a) the Trustee shall prepare and file, or cause to
be prepared and filed, in a timely manner, U.S. Real Estate Mortgage Investment
Conduit Income Tax Returns (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and filed
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
such REMIC containing such information and at the times and in the manner as may
be required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
the Trustee shall apply for an employer identification number with the Internal
Revenue Service via a Form SS-4 or other comparable method for each REMIC that
is or becomes a taxable entity, and within thirty days of the Closing Date,
furnish or cause to be furnished to the Internal Revenue Service, on Forms 8811
or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for the Trust Fund; (c) the Trustee
shall make or cause to be made elections, on behalf of each REMIC formed
hereunder to be treated as a REMIC on the federal tax return of such REMIC for
its first taxable year (and, if necessary, under applicable state law); (d) the
Trustee shall prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) the Trustee shall provide information necessary for the
computation of tax imposed on the transfer of a Residual Certificate to a Person
that is not a Permitted Transferee, or an agent (including a broker, nominee or
other middleman) of a Person that is not a Permitted Transferee, or a
pass-through entity in which a Person that is not a Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) the
Trustee shall, to the extent under its


                                     -126-
<PAGE>

control, conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of each REMIC formed
hereunder as a REMIC under the REMIC Provisions; (g) the Trustee shall not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any REMIC formed hereunder; (h) the
Trustee shall pay, from the sources specified in the last paragraph of this
Section 9.12, the amount of any federal, state and local taxes, including
prohibited transaction taxes as described below, imposed on any REMIC formed
hereunder prior to the termination of the Trust Fund when and as the same shall
be due and payable (but such obligation shall not prevent the Trustee or any
other appropriate Person from contesting any such tax in appropriate proceedings
and shall not prevent the Trustee from withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings); (i) the Trustee
shall sign or cause to be signed federal, state or local income tax or
information returns or any other document prepared by the Trustee pursuant to
this Section 9.12 requiring a signature thereon by the Trustee; (j) the Trustee
shall maintain records relating to each REMIC formed hereunder including but not
limited to the income, expenses, assets and liabilities of each such REMIC and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; (k) the Trustee shall, for federal income
tax purposes, maintain books and records with respect to the REMICs on a
calendar year and on an accrual basis; (l) the Trustee shall not enter into any
arrangement not otherwise provided for in this Agreement by which the REMICs
will receive a fee or other compensation for services nor permit the REMICs to
receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code; and (m) as and when necessary and appropriate, the
Trustee shall represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
REMIC formed hereunder, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any tax item of the
Trust Fund, and otherwise act on behalf of each REMIC formed hereunder in
relation to any tax matter involving any such REMIC.

         In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.

         In the event that any tax is imposed on "prohibited transactions" of
any REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Trust Fund as defined in Section 860G(c) of the
Code, on any contribution to any REMIC after the startup day pursuant to Section
860G(d) of the Code, or any other tax is imposed, including,


                                     -127-
<PAGE>

without limitation, any federal, state or local tax or minimum tax imposed upon
any REMIC and is not paid as otherwise provided for herein, such tax shall be
paid by (i) the Trustee, if any such other tax arises out of or results from a
breach by the Trustee of any of its obligations under this Section, (ii) any
party hereto (other than the Trustee) to the extent any such other tax arises
out of or results from a breach by such other party of any of its obligations
under this Agreement or (iii) in all other cases, or in the event that any
liable party hereto fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts otherwise to be
distributed to the Residual Certificateholders, and second with amounts
otherwise to be distributed to all other Certificateholders in the following
order of priority: first, to the Subordinate Certificates in reverse numerical
order, and second, to the Senior Certificates (pro rata based on the amounts to
be distributed). Notwithstanding anything to the contrary contained herein, to
the extent that such tax is payable by the Holder of any Certificates, the
Trustee is hereby authorized to retain on any Distribution Date, from the
Holders of the Residual Certificates (and, if necessary, second, from the
Holders of the other Certificates in the priority specified in the preceding
sentence), funds otherwise distributable to such Holders in an amount sufficient
to pay such tax. The Trustee shall include in its Remittance Report instructions
as to distributions to such parties taking into account the priorities described
in the second preceding sentence. The Trustee agrees to promptly notify in
writing the party liable for any such tax of the amount thereof and the due date
for the payment thereof.

         Section 9.13 CUSTODIAN'S FEES AND EXPENSES.

         The Seller covenants and agrees to pay the Custodian from time to time,
and the Custodian shall be entitled to reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
of the Custodian hereunder, and the Seller will pay or reimburse the Custodian
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Custodian in accordance with any of the provisions of
this Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ),
except any such expense, disbursement or advance as may arise from its
negligence or bad faith or to the extent that such cost or expense is
indemnified by the Depositor pursuant to this Agreement.

         Section 9.14 INDEMNIFICATION OF CUSTODIAN.

         The Custodian and its directors, officers, agents and employees shall
be indemnified and held harmless by the Trust Fund against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by or asserted
against it or them in any way relating to or arising out of this Agreement or
any action taken or not taken by it or them hereunder except to the extent
caused by the Custodian's negligence or willful misconduct. If funds in the
Trust Fund are insufficient therefor, the Custodian shall recover such expenses
from the Seller. The indemnification provided for under this Section 9.14 shall
survive the termination of this Agreement and the resignation or removal of the
Custodian.



                                     -128-
<PAGE>

         Section 9.15 RELIANCE OF CUSTODIAN.

         (a) The Custodian may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
request, instructions, direction, certificate, opinion or other document
furnished to the Custodian, reasonably believed by the Custodian to be genuine
and to have been signed or presented by the proper party or parties and
conforming to the requirements of this Agreement;

         (b) (b) The Custodian shall have no duties or responsibilities except
those that are specifically set forth in this Agreement. The Custodian shall
have no responsibility nor duty with respect to any Mortgage File while such
Mortgage File is not in its possession. If the Custodian requests instructions
from the Trustee with respect to any act, action or failure to act in connection
with this Agreement, the Custodian shall be entitled to refrain from acting
unless and until the Custodian shall have received written instructions from the
Trustee with respect to a Mortgage File without incurring any liability therefor
to the Trustee or any other Person;

         (c) The Custodian shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Custodian
unless it shall be proved that the Custodian was negligent in ascertaining the
pertinent facts;

         (d) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Custodian be liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Custodian has been advised of the likelihood of
such loss or damage and regardless of the form of action and whether or not any
such damages were foreseeable or contemplated;

         (e) The Custodian shall not be required to expend or risk its own funds
or otherwise incur financial liability (other than expenses or liabilities
otherwise required to be incurred by the express terms of this Agreement) in the
performance of any of its duties hereunder if it shall have reasonable grounds
for believing that the repayment of such funds or indemnity satisfactory to it
is not reasonably assured to it;

         (f) The Custodian may consult with counsel and any advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection with respect to any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;

         (g) The Custodian makes no representations and has no responsibilities
as to (i) the validity, legality, enforceability, recordability, sufficiency,
due authorization or genuineness of any of the documents contained in the
Mortgage Files or any of the Mortgage Loans or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan;

         (h) Neither the Custodian nor any of this directors, officers, agents
or employees shall be liable for any action taken, suffered or omitted to be
taken by it in good faith and believed by it to be authorized or within the
rights or powers conferred upon it by this Agreement. The obligations of the
Custodian or any of its directors, officers, agents or employees shall be
determined solely by the express provisions of this Agreement. No
representation, warranty, covenant, agreement, obligation or duty of the
Custodian or any of its directors, officers, agents



                                     -129-
<PAGE>

or employees shall be implied with respect to this Agreement or the Custodian's
services hereunder;

         (i) The Custodian, its directors, officers and employees shall be under
no duty or obligation to inspect, review or examine the Mortgage Files to
determine that the contents thereof are genuine, enforceable or appropriate for
the represented purpose or that they have been actually recorded or that they
are other than what they purport to be on their face;

         (j) Any corporation into which the Custodian may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Custodian shall be a party, or
any corporation succeeding to the business of the Custodian shall be the
successor of the Custodian hereunder without the execution or filing of any
paper with any party hereto or any further act on the part of any of the parties
hereto except where an instrument of transfer or assignment is required by law
to effect such succession, anything to the contrary herein notwithstanding.



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<PAGE>


                                   ARTICLE X

                                   TERMINATION

         Section 10.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL
                       MORTGAGE LOANS.

         Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Seller and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earlier of (a) the later to occur of the Class X
Certificateholder's (so long as it is not an affiliate of the Seller) exercise
of its optional right to purchase the Mortgage Loans and related REO Properties
(the "Clean-up Call") and (b) the later of (i) the maturity or other liquidation
(or any Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Joseph P. Kennedy, the late Ambassador
of the United States to the Court of St. James, living on the date hereof and
(ii) the Latest Possible Maturity Date.

         The Cleanup Call shall be exercisable at a price (the "Termination
Price") equal to the sum of (i) 100% of the Stated Principal Balance of Mortgage
Loan, (ii) accrued interest thereon at the applicable Mortgage Rate to, but not
including, the first day of the month of such purchase, (iii) the appraised
value of any related REO Property (up to the Stated Principal Balance of the
related Mortgage Loan), such appraisal to be conducted by an appraiser mutually
agreed upon by the Class X Certificateholder and the Trustee and (iv)
unreimbursed out-of-pocket costs of the Servicer or the Trustee, including
unreimbursed servicing advances and the principal portion of any unreimbursed
Advances, made on the related Mortgage Loans prior to the exercise of such
repurchase right and (v) any unreimbursed costs and expenses of the Trustee
payable pursuant to Section 9.05.

         The right to exercise the Cleanup Call pursuant to the preceding
paragraph shall be exercisable if the Stated Principal Balance of all of the
Mortgage Loans at the time of any such repurchase, is less than or equal to ten
percent of the aggregate Cut-off Date Principal Balance of the Mortgage Loans.

         Section 10.02 FINAL DISTRIBUTION ON THE CERTIFICATES.

         If on any Determination Date, (i) the Trustee determines based on the
reports delivered by the Servicer under this Agreement that there are no
Outstanding Mortgage Loans, and no other funds or assets in the Trust Fund other
than the funds in the Distribution Account, the Trustee shall to send a final
distribution notice promptly to each related Certificateholder or (ii) the
Trustee determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Trustee shall notify the Certificateholders
within five (5) Business Days after such Determination Date that the final
distribution in retirement of such Class of Certificates is scheduled to be made
on the immediately following Distribution Date. Any final distribution made
pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the related Certificates at the office of the
Trustee set forth herein. If the Class X



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<PAGE>

Certificateholder elects to terminate the Trust Fund pursuant to Section 10.01,
at least 20 days prior to the date notice is to be mailed to the
Certificateholders, the Class X Certificateholder shall notify the Trustee of
the date the Class X Certificateholder intends to terminate the Trust Fund. The
Class X Certificateholder shall remit the Termination Price to the Trustee on
the Business Day prior to the Distribution Date for such Optional Termination by
the Class X Certificateholder.

         Notice of the exercise of the Cleanup Call, specifying the Distribution
Date on which the Certificateholders may surrender their Certificates for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to the Certificateholders mailed not earlier than the 10th
day and no later than the 15th day of the month immediately preceding the month
of such final distribution. Any such notice shall specify (a) the Distribution
Date upon which final distribution on the Certificates will be made upon
presentation and surrender of the Certificates at the office therein designated,
(b) the amount of such final distribution, (c) the location of the office or
agency at which such presentation and surrender must be made and (d) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such notice
to each Rating Agency at the time such notice is given to the
Certificateholders.

         In the event such notice is given, the Class X Certificateholder shall
deposit in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit and the receipt by the Trustee of a
Request for Release therefor, the Trustee shall promptly release to the Class X
Certificateholder, as applicable the Mortgage Files for the related Mortgage
Loans and any documents necessary to transfer any related REO Property.

         Upon presentation and surrender of the related Certificates, the
Trustee shall cause to be distributed to Certificateholders of each Class the
amounts allocable to such Certificates held in the Distribution Account in the
order and priority set forth in Section 5.04 and/or Section 5.06 hereof on the
final Distribution Date and in proportion to their respective Percentage
Interests.

         In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining affected Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
affected Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets that remain a part
of the Trust Fund. If within two years after the second notice all affected
Certificates shall not have been surrendered for cancellation, the related
Residual Certificateholders shall be entitled to all unclaimed funds and other
assets of the Trust Fund that remain subject hereto and the Trustee shall
release such funds upon written direction.



                                     -132-
<PAGE>

         Section 10.03 ADDITIONAL TERMINATION REQUIREMENTS.

         (a) In the event of (i) the exercise by the Class X Certificateholder
of the Cleanup Call pursuant to the terms of this Agreement, or (ii) the final
payment on or other liquidation of the last Mortgage Loan or REO Property in the
related REMIC pursuant to Section 10.01, the following additional requirements,
unless the Trustee has been supplied with an Opinion of Counsel, at the expense
of the Class X Certificateholder (in the case of the exercise of the Cleanup
Call) or the Depositor, to the effect that the failure of the Trust Fund to
comply with the requirements of this Section 10.03 will not (i) result in the
imposition of taxes on "prohibited transactions" of a REMIC, or (ii) cause any
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding:

                  (1) The Class X Certificateholder (in the case of the exercise
         of the Cleanup Call) or the Depositor (in all other cases) shall
         establish a 90-day liquidation period and notify the Trustee thereof,
         and the Trustee shall in turn specify the first day of such period in a
         statement attached to the tax return for each of REMIC I and REMIC II
         pursuant to Treasury Regulation Section 1.860F-1. The Class X
         Certificateholder or the Depositor, as applicable, shall satisfy all
         the requirements of a qualified liquidation under Section 860F of the
         Code and any regulations thereunder, as evidenced by an Opinion of
         Counsel obtained at the expense of the Class X Certificateholder or the
         Depositor, as applicable;

                  (2) During such 90-day liquidation period, and at or prior to
         the time of making the final payment on the Certificates, the Class X
         Certificateholder (in the case of the exercise of the Cleanup Call) or
         the Depositor (in all other cases) shall sell all of the assets of
         REMIC I for cash; and

                  (3) At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited, to the Holders of the related Residual
         Certificates all cash on hand in the Trust Fund (other than cash
         retained to meet claims), and the Trust Fund shall terminate at that
         time.

         (b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Class X Certificateholder (in the case of the exercise of the
Cleanup Call) or the Depositor (in all other cases) to specify the 90-day
liquidation period for REMIC I and REMIC II, which authorization shall be
binding upon all successor Certificateholders.

         (c) The Trustee as agent for each REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Class X
Certificateholder or the Depositor, as applicable, and the receipt of the
Opinion of Counsel referred to in Section 10.03(a)(1) and to take such other
action in connection therewith as may be reasonably requested by the Class X
Certificateholder or the Depositor, as applicable.



                                     -133-
<PAGE>


                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

         Section 11.01 AMENDMENT.

         This Agreement may be amended from time to time by parties hereto,
without the consent of any of the Certificateholders to cure any ambiguity, to
correct or supplement any provisions herein, to change the manner in which the
Distribution Account maintained by the Trustee or the Custodial Account are
maintained or to make such other provisions with respect to matters or questions
arising under this Agreement as shall not be inconsistent with any other
provisions herein if such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder; provided that any such amendment shall be deemed not to
adversely affect in any material respect the interests of the Certificateholders
and no such Opinion of Counsel shall be required if the Person requesting such
amendment obtains a letter from each Rating Agency stating that such amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates.

         Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of each of REMIC I and REMIC II as a REMIC under the Code or to avoid or
minimize the risk of the imposition of any tax on either REMIC I or REMIC II
pursuant to the Code that would be a claim against REMIC I or REMIC II at any
time prior to the final redemption of the Certificates, provided that the
Trustee has been provided an Opinion of Counsel, which opinion shall be an
expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Trust Fund, to the effect that such action is
necessary or appropriate to maintain such qualification or to avoid or minimize
the risk of the imposition of such a tax.

         This Agreement may also be amended from time to time by the parties
hereto and the Holders of each Class of Certificates affected thereby evidencing
over 50% of the Voting Rights of such Class or Classes for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) cause
either REMIC I or REMIC II to cease to qualify as a REMIC or (iii) reduce the
aforesaid percentages of Certificates of each Class the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all Certificates of such Class then outstanding.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not (other than an



                                     -134-
<PAGE>

amendment pursuant to clause (ii) of, and in accordance with, the preceding
paragraph) cause the imposition of any tax on REMIC I or REMIC II or the
Certificateholders or cause REMIC I or REMIC II to cease to qualify as a REMIC
at any time that any Certificates are outstanding. Further, nothing in this
Agreement shall require the Trustee to enter into an amendment without receiving
an Opinion of Counsel, satisfactory to the Trustee that (i) such amendment is
permitted and is not prohibited by this Agreement and (ii) that all requirements
for amending this Agreement (including any consent of the applicable
Certificateholders) have been complied with.

         Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.

         It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

         Section 11.02 RECORDATION OF AGREEMENT; COUNTERPARTS.

         To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The Seller or the Depositor shall effect such recordation
at the Trust's expense upon the request in writing of a Certificateholder, but
only if such direction is accompanied by an Opinion of Counsel (provided at the
expense of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

         Section 11.03 GOVERNING LAW.

         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

         Section 11.04 INTENTION OF PARTIES.

         It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions



                                     -135-
<PAGE>

and/or assumption agreements and private mortgage insurance policies relating to
the Mortgage Loans by the Seller to the Depositor, and by the Depositor to the
Trust Fund be, and be construed as, an absolute sale thereof to the Depositor or
the Trust Fund, as applicable. It is, further, not the intention of the parties
that such conveyance be deemed a pledge thereof by the Seller to the Depositor,
or by the Depositor to the Trust Fund. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Seller or the Depositor, as applicable, or if for any other
reason this Agreement is held or deemed to create a security interest in such
assets, then (i) this Agreement shall be deemed to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York and
(ii) each conveyance provided for in this Agreement shall be deemed to be an
assignment and a grant by the Seller or the Depositor, as applicable, for the
benefit of the Certificateholders, of a security interest in all of the assets
that constitute the Trust Fund, whether now owned or hereafter acquired.

         The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement.

         Section 11.05 NOTICES.

         (a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:

                  (i) Any material change or amendment to this Agreement;

                  (ii) The occurrence of any Servicer of Default that has not
         been cured;

                  (iii) The resignation or termination of the Servicer or the
         Trustee and the appointment of any successor; and

                  (iv) The final payment to Certificateholders.

         In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:

                  (i) Each report to Certificateholders described in Section
         5.09;

                  (ii) Each annual statement as to compliance described in
         Section 3.16; and

                  (iii) Each annual independent public accountants' servicing
         report described in Section 4.17.

         (b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered at or mailed by
registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, or by facsimile transmission to a number provided by the
appropriate party if receipt of such transmission is confirmed to (i) in the



                                     -136-
<PAGE>

case of the Depositor, Nomura Asset Acceptance Corp., 2 World Financial Center,
Building B, New York, New York 10281 Attention: Nomura Asset Acceptance
Corporation, Alternative Loan Trust, Series 2005-AR1; (ii) in the case of the
Seller, Nomura Credit & Capital, Inc., 2 World Financial Center, Building B, New
York, New York 10281, Attention: Nomura Asset Acceptance Corporation,
Alternative Loan Trust, Series 2005-AR1 or such other address as may be
hereafter furnished to the other parties hereto by the Seller in writing; (iii)
in the case of the Servicer, GMAC Mortgage Corporation, 500 Enterprise Road,
Horsham, Pennsylvania 19044, Attention: Ken Perkins; (iv) in the case of the
Trustee, at each Corporate Trust Office or such other address as the Trustee may
hereafter furnish to the other parties hereto; (v) in the case of the Rating
Agencies, (x) Standard & Poor's, 55 Water Street, 41st Floor, New York, New York
10041, Attention: Mortgage Surveillance Group and (y) Moody's Investors Service,
Inc., 99 Church Street, New York, New York 10007, Attention: Home Equity
Monitoring. Any notice delivered to the Seller or the Trustee under this
Agreement shall be effective only upon receipt. Any notice required or permitted
to be mailed to a Certificateholder, unless otherwise provided herein, shall be
given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register; any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder receives such notice.

         Section 11.06 SEVERABILITY OF PROVISIONS.

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

         Section 11.07 ASSIGNMENT.

         Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 7.02, this Agreement may not be assigned by the
Seller or the Depositor.

         Section 11.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.



                                     -137-
<PAGE>

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee, a written notice
of a Servicer Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee,
hereunder and shall have offered to the Trustee such indemnity satisfactory to
it as it may require against the costs, expenses, and liabilities to be incurred
therein or thereby, and the Trustee or for 60 days after its receipt of such
notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 11.08, each and every Certificateholder or the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

         Section 11.09 CERTIFICATES NONASSESSABLE AND FULLY PAID.

         It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.


                                      * * *


                                     -138-
<PAGE>


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

                                  NOMURA ASSET ACCEPTANCE CORPORATION,
                                          as Depositor


                                  By: /s/ N. Dante LaRocca
                                     -------------------------------------
                                  Name:  N. Dante LaRocca
                                  Title: Authorized Agent


                                  NOMURA CREDIT & CAPITAL, INC.,
                                          as Seller


                                  By: /s/ N. Dante LaRocca
                                     -------------------------------------
                                  Name:  N. Dante LaRocca
                                  Title: Managing Director


                                  GMAC MORTGAGE CORPORATION,
                                          as Servicer


                                  By: /s/ Wesley B. Howland
                                     -------------------------------------
                                  Name:  Wesley B. Howland
                                  Title: Vice President


                                  JPMORGAN CHASE BANK, N.A.
                                          as Trustee


                                  By: /s/ Andrew M. Cooper
                                     -------------------------------------
                                  Name:  Andrew M. Cooper
                                  Title: Assistant Vice President


                                  JPMORGAN CHASE BANK, N.A.
                                          as Custodian


                                  By: /s/ Robert W. Johnson
                                     -------------------------------------
                                  Name:  Robert W. Johnson
                                  Title: Authorized Officer




<PAGE>



                                  With respect to Sections 4.08 and 4.09

                                  THE MURRAYHILL COMPANY

                                  By: /s/ Kevin Kanouff
                                     -------------------------------------
                                  Name:  Kevin Kanouff
                                  Title: President and General Counsel



<PAGE>


STATE OF NEW YORK              )
                               )ss.:
COUNTY OF NEW YORK             )

         On this ___ day of February 2005, before me, a notary public in and for
said State, appeared ________________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of Nomura Asset
Acceptance Corporation, one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such corporation executed the
within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.



                                                     ---------------------------
                                                     Notary Public


[Notarial Seal]




<PAGE>







  STATE OF NEW YORK                   )
                                      )
                                      ss.:
  COUNTY OF NEW YORK                  )
         On this ____ day of February 2005, before me, a notary public in and
for said State, appeared ______________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of Nomura Credit &
Capital, Inc., that executed the within instrument, and also known to me to be
the person who executed it on behalf of such corporation, and acknowledged to me
that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                     ---------------------------
                                                     Notary Public


 [Notarial Seal]



<PAGE>



STATE OF NEW YORK              )
                               )ss.:
COUNTY OF NEW YORK             )

         On this ____ day of February 2005, before me, a notary public in and
for said State, appeared _________________, personally known to me on the basis
of satisfactory evidence to be an authorized representative of GMAC Mortgage
Corporation, one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation
and acknowledged to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                     ---------------------------
                                                     Notary Public


[Notarial Seal]



<PAGE>



STATE OF NEW YORK              )
                               )ss.:
COUNTY OF NEW YORK             )

         On this ____ day of February 2005, before me, a notary public in and
for said State, appeared _______________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of JPMorgan Chase Bank,
N.A. that executed the within instrument, and also known to me to be the person
who executed it on behalf of such corporation, and acknowledged to me that such
corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                     ---------------------------
                                                     Notary Public


[Notarial Seal]




<PAGE>



STATE OF            )
                    )ss.:
COUNTY OF           )

         On this ____ day of February 2005, before me, a notary public in and
for said State, appeared _______________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of JPMorgan Chase Bank,
N.A. that executed the within instrument, and also known to me to be the person
who executed it on behalf of such corporation, and acknowledged to me that such
corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                     ---------------------------
                                                     Notary Public


[Notarial Seal]

<PAGE>

                                   EXHIBIT A-1

                 FORM OF CLASS [I][II]-A[-1][-2][-3] CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON [CLASS I-A-2 AND CLASS II-A-3 ONLY]
[AND REALIZED LOSSES ALLOCABLE HERETO]. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.


<PAGE>



<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No. [__]                                       Pass-Through Rate:  Variable

Class [I][II]-A[-1][-2][-3] Senior

                                                           Aggregate Initial Certificate Principal Balance of this
Date of Pooling and Servicing Agreement                    Certificate as of the Cut-off Date:
 and Cut-off Date: February 1, 2005                        $
Trustee: JPMorgan Chase Bank, N.A.
                                                           Initial Certificate Principal Balance of this
                                                           Certificate as of the Cut-off Date:
First Distribution Date: March 25, 2005                    $

Assumed Final Distribution Date:
February 25, 2035                                          CUSIP: [______________]
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2005-AR1

         evidencing a fractional undivided interest in the distributions
         allocable to the Class [I][II]-A[-1][-2][-3] Certificates with respect
         to a Trust Fund consisting primarily of a pool of conventional one- to
         four-family adjustable interest rate mortgage loans sold by NOMURA
         ASSET ACCEPTANCE CORPORATION


                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Nomura Asset
Acceptance Corporation ("NAAC") or the Trustee or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by NAAC or the Trustee or
any of their affiliates or any other person. None of NAAC, the Trustee or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.

                  This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, adjustable rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
NAAC. The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the
"Seller") to NAAC. The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among NAAC, as depositor (the "Depositor"), the Seller, as seller,
GMAC Mortgage Corporation, as servicer, and JPMorgan Chase Bank, N.A., as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of


                                      A-1-2


<PAGE>

which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.

                  Interest on this Certificate will accrue during [for Class
I-A[-1][-2] Certificates: the calendar month prior to the calendar month in
which a Distribution Date (as hereinafter defined) occurs] [for Class II-A-1,
Class II-A-2 and Class II-A-3 Certificates: the period commencing on the
immediately preceding Distribution Date (as hereinafter defined) (or with
respect to the First Distribution Date, the Closing Date) and ending on the day
immediately preceding the related Distribution Date] on the Certificate
Principal Balance hereof at a per annum Pass-Through Rate equal to [for Class
I-A-1 Certificates: the weighted average of the Net Mortgage Rates of the Group
I Mortgage Loans minus [__]%][for Class I-A-2 Certificates: the weighted average
of the Net Mortgage Rates of the Group I Mortgage Loans minus [__]%] [for Class
II-A-1, Class II-A-2 and Class II-A-3 Certificates: the least of (i) the sum of
one-month LIBOR for that Distribution Date plus (A) on or prior to the first
possible optional termination date, [___]% or (B) after the first possible
optional termination date, [__]%, (ii) the applicable Net Funds Cap, (iii) the
applicable Cap Rate and (iv) the applicable Maximum Interest Rate]. The Trustee
will distribute on the 25th day of each month, or, if such 25th day is not a
Business Day, the immediately following Business Day (each, a "Distribution
Date"), commencing on the First Distribution Date specified above, to the Person
in whose name this Certificate is registered at the close of business on [for
Class I-A-1 and I-A-2 Certificates: the last day (or if such last day is not a
Business Day, the Business Day immediately preceding such last day) of the
calendar month immediately preceding the month in which the Distribution Date
occurs][for Class II-A-1, Class II-A-2 and Class II-A-3 Certificates: the
Business Day immediately preceding such Distribution Date], an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. The Assumed Final
Distribution Date is the Distribution Date in the month following the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Certificate Principal Balance of this Class of Certificates will be
reduced to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon [for Class I-A-2 and Class II-A-3
Certificates: and Realized Losses on the Group I and II Mortgage Loans allocable
to the [Class I-A2] [Class II-A-3] Certificates].

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.


                                      A-1-3

<PAGE>

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans and
payments received pursuant to the Cap Contracts, all as more specifically set
forth in the Agreement.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Classes or Classes of Certificates affected thereby evidencing
over 50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of Depositor, the Trustee or any such agent shall be affected
by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other


                                      A-1-4

<PAGE>

liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.



                                      A-1-5

<PAGE>





         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.


Dated:   December __, 2004               JPMORGAN CHASE BANK, N.A.
                                         not in its individual capacity but
                                         solely as Trustee


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


                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class [I][II]-A[-1][-2][-3] Certificates referred to
in the within-mentioned Agreement.

                                            JPMORGAN CHASE BANK, N.A. Authorized
                                            signatory of JPMorgan Chase Bank,
                                            N.A. not in its individual capacity
                                            but solely as Trustee

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

<PAGE>


                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                                        ________________________________________
                                        Signature by or on behalf of assignor


                                        ________________________________________
                                        Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-2

                   FORM OF CLASS M-[1][2][3][4][5] CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES [[AND ]THE CLASS M-1 CERTIFICATES] [[AND ]THE CLASS M-2
CERTIFICATES] [[AND ]THE CLASS M-3 CERTIFICATES] [[AND ]THE CLASS M-4
CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  ANY TRANSFEREES OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE
THE REPRESENTATIONS SET FORTH IN SECTION 6.02(B) OF THE AGREEMENT.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.


<PAGE>







<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No. [__]                                       Pass-Through Rate:  Variable

Class M-[1][2][3][4][5] Subordinate

                                                           Aggregate Initial Certificate Principal Balance of this
Date of Pooling and Servicing Agreement and Cut-off Date:  Certificate as of the Cut-off Date:
February 1, 2005                                           $
Trustee: JPMorgan Chase Bank, N.A.
                                                           Initial Certificate Principal Balance of this
First Distribution Date:                                   Certificate as of the Cut-off Date:
March 25, 2005                                             $

Assumed Final Distribution Date:
February 25, 2035                                          CUSIP:   [__________________]
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2005-AR1

         evidencing a fractional undivided interest in the distributions
         allocable to the Class M-[1][2][3][4][5] Certificates with respect to a
         Trust Fund consisting primarily of a pool of conventional one- to
         four-family adjustable interest rate mortgage loans sold by NOMURA
         ASSET ACCEPTANCE CORPORATION.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Nomura Asset
Acceptance Corporation ("NAAC") or the Trustee or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by NAAC or the Trustee or
any of their affiliates or any other person. None of NAAC, the Trustee or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.

                  This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, adjustable rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
NAAC. The Mortgage Loans were sold by Nomura Credit & Capital, Inc. (the
"Seller") to NAAC. The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), among NAAC, as depositor (the "Depositor"), the Seller, as seller,
GMAC Mortgage Corporation, as servicer, and JPMorgan Chase Bank, N.A., as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder

                                     A-2-2

<PAGE>

of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.

                  Interest on this Certificate will accrue during the period
commencing on the immediately preceding Distribution Date (as hereinafter
defined) (or with respect to the First Distribution Date, the Closing Date) and
ending on the day immediately preceding the related Distribution Date on the
Certificate Principal Balance hereof at a per annum Pass-Through Rate equal to
the least of (i) the sum of one-month LIBOR for that Distribution Date plus (A)
on or prior to the first possible optional termination date, [___]% or (B) after
the first possible optional termination date, [__]%, (ii) the applicable Net
Funds Cap, (iii) the applicable Cap Rate and (iv) the applicable Maximum
Interest Rate. The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the Business Day immediately preceding such
Distribution Date, an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. The Assumed Final Distribution Date is the Distribution Date
in the month following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Certificate Principal Balance of
this Class of Certificates will be reduced to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee. The Certificates are limited in right of
payment to certain collections and recoveries respecting the Mortgage Loans and
payments received pursuant to the Cap Contracts, all as more specifically set
forth in the Agreement.

                  The Agreement permits, with certain exceptions therein
provided, the amendment

                                     A-2-3

<PAGE>

thereof and the modification of the rights and obligations of the Depositor and
the rights of the Certificateholders under the Agreement from time to time by
the parties thereto with the consent of the Holders of the Class or Classes of
Certificates affected thereby evidencing over 50% of the Voting Rights of such
Class or Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 6.02(b) of the Agreement.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Trustee or any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.


                                     A-2-4

<PAGE>

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.


                                     A-2-5

<PAGE>





         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.


Dated:   December __, 2004               JPMORGAN CHASE BANK, N.A.
                                         not in its individual capacity but
                                         solely as Trustee


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


                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class M-[1][2][3][4][5] Certificates referred to
in the within-mentioned Agreement.

                                         JPMORGAN CHASE BANK, N.A. Authorized
                                         signatory of JPMorgan Chase Bank, N.A.
                                         not in its individual capacity but
                                         solely as Trustee

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

<PAGE>


                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                                        ________________________________________
                                        Signature by or on behalf of assignor


                                        ________________________________________
                                        Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>


                                   EXHIBIT A-3

                           FORM OF CLASS X CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND
MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO
HEREIN.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.

                  NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES A CERTIFICATE PURSUANT TO SECTION 6.02(B) OF THE
AGREEMENT.




<PAGE>




Certificate No. [__]                        Percentage Interest: [___%]

Class X                                     Variable Pass-Through Rate

Date of Pooling and Servicing               Initial Notional Balance of this
Agreement and Cut-off Date:                 Certificate as of the Cut-off Date:

February 1, 2005                                           $

Trustee: JPMorgan Chase Bank, N.A.
First Distribution Date:
March 25, 2005

Assumed Final Distribution Date:
February 25, 2035                                         CUSIP: [_____________]


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2005-AR1

         evidencing a fractional undivided interest in the distributions
         allocable to the Class X Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         adjustable interest rate mortgage loans sold by NOMURA ASSET ACCEPTANCE
         CORPORATION

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Nomura Asset
Acceptance Corporation ("NAAC") or the Trustee referred to below or any of their
affiliates or any other person. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed or insured by any governmental entity or by NAAC
or the Trustee or any of their affiliates or any other person. None of NAAC, the
Trustee or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that Nomura Securities International, Inc. is
the registered owner of the Percentage Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund"), generally consisting of conventional
first lien, adjustable rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the "Mortgage Loans") sold by NAAC. The Mortgage Loans were sold
by Nomura Credit & Capital, Inc. (the "Seller") to NAAC. The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), among NAAC, as


                                     A-3-2

<PAGE>

depositor (the "Depositor"), the Seller, as seller, GMAC Mortgage Corporation,
as servicer, and JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

         Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Notional Balance hereof at a per annum rate equal to the Pass-Through Rate as
set forth in the Agreement. The Trustee will distribute on the 25th day of each
month, or, if such 25th day is not a Business Day, the immediately following
Business Day (each, a "Distribution Date"), commencing on the First Distribution
Date specified above, to the Person in whose name this Certificate is registered
at the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit E and either F
or G, as applicable, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor or the Trustee in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. Neither the


                                     A-3-3

<PAGE>

Depositor nor the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Seller 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.

                  No transfer of this Certificate shall be made to any person
unless the transferee provides a certification pursuant to Section 6.02(b) of
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and

                                     A-3-4

<PAGE>

subject to certain limitations therein set forth, this Certificate is
exchangeable for one or more new Certificates evidencing the same Class and in
the same aggregate Percentage Interest, as requested by the Holder surrendering
the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Trustee or any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-3-5

<PAGE>


         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  February __, 2005          JPMORGAN CHASE BANK, N.A.
                                   not in its individual capacity but solely
                                   as Trustee


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


                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class X Certificates referred to in the
within-mentioned Agreement.

                                   JPMORGAN CHASE BANK, N.A.
                                   Authorized signatory of JPMorgan Chase
                                   Bank, N.A., not in its individual
                                   capacity but solely as Trustee


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



<PAGE>


                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                                          ______________________________________
                                          Signature by or on behalf of assignor


                                          ______________________________________
                                          Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.



<PAGE>


                                   EXHIBIT A-4

                           FORM OF CLASS P CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.

                  NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES A CERTIFICATE PURSUANT TO SECTION 6.02(B) OF THE
AGREEMENT.



<PAGE>


Certificate No. [__]                       Percentage Interest: [_%]

Class P

Date of Pooling and Servicing              Aggregate Initial Certificate
Agreement and Cut-off Date:                Principal Balance of this Certificate
February 1, 2005                           as of the Cut-off Date: $100

Trustee: JPMorgan Chase Bank, N.A.
First Distribution Date:                   Denomination:
March 25, 2005                             $[______________]

Assumed Final Distribution Date:
February 25, 2035                          CUSIP:  [________________]


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2005-AR1

         evidencing a fractional undivided interest in the distributions
         allocable to the Class P Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         adjustable interest rate mortgage loans sold by NOMURA ASSET ACCEPTANCE
         CORPORATION

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Nomura Asset
Acceptance Corporation ("NAAC") or the Trustee referred to below or any of their
affiliates or any other person. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed or insured by any governmental entity or by NAAC
or the Trustee or any of their affiliates or any other person. None of NAAC, the
Trustee or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that Nomura Securities International, Inc. is
the registered owner of the Percentage Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund"), generally consisting of conventional
first lien, adjustable rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the "Mortgage Loans") sold by NAAC. The Mortgage Loans were sold
by Nomura Credit & Capital, Inc. (the "Seller") to NAAC. The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), among NAAC, as

                                     A-4-2

<PAGE>

depositor (the "Depositor"), the Seller, as seller, GMAC Mortgage Corporation,
as servicer, and JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit E and either F
or G, as applicable, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor or the Trustee in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. Neither the Depositor
nor the Trustee is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Depositor and the Seller 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.

                  No transfer of this Certificate shall be made to any person
unless the transferee provides a certification pursuant to Section 6.02(b) of
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                                     A-4-3

<PAGE>

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Trustee or any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination

                                     A-4-4

<PAGE>


of the Agreement) shall terminate upon the earlier of (i) the later of (A) the
maturity or other liquidation (or Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan
and (B) the remittance of all funds due under the Agreement, or (ii) the
optional repurchase by the party named in the Agreement of all the Mortgage
Loans and other assets of the Trust Fund in accordance with the terms of the
Agreement. Such optional repurchase may be made only on if on such Distribution
Date the aggregate Stated Principal Balance of the Mortgage Loans is less than
or equal to 10% of the aggregate Stated Principal Balance of the Mortgage Loans
at the Cut-off Date. The exercise of such right will effect the early retirement
of the Certificates. In no event, however, will the Trust Fund created by the
Agreement continue beyond the earlier to occur of (i) expiration of 21 years
after the death of certain persons identified in the Agreement and (ii) the
Assumed Final Distribution Date.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.


                                     A-4-5
<PAGE>


                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated:  February __, 2005          JPMORGAN CHASE BANK, N.A.
                                   not in its individual capacity but solely
                                   as Trustee


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



                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                         JPMORGAN CHASE BANK, N.A. Authorized
                                         signatory of JPMorgan Chase Bank, N.A.
                                         not in its individual capacity but
                                         solely as Trustee

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


<PAGE>



                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                                        ________________________________________
                                        Signature by or on behalf of assignor


                                        ________________________________________
                                        Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.


<PAGE>

                                   EXHIBIT A-5

                           FORM OF CLASS R CERTIFICATE

                  THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES A CERTIFICATE PURSUANT TO SECTION 6.02(B) OF THE
AGREEMENT.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY
WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT
FOR FREDDIE MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY SUCH
GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) ANY ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING
THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE
INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER SECTION
775(A) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B),
(C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR
(F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS

<PAGE>

RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING
THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL
FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.


<PAGE>


Certificate No. [__]


Class R                                              Percentage Interest: [__]


Date of Pooling and Servicing Agreement
and Cut-off Date: February 1, 2005

First Distribution Date:
March 25, 2005

Trustee: JPMorgan Chase Bank, N.A.                   CUSIP:  [_______________]

Assumed Final Distribution Date:
February 25, 2035


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2005-AR1

         evidencing a fractional undivided interest in the distributions
         allocable to the Class R Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         adjustable interest rate mortgage loans sold by NOMURA ASSET ACCEPTANCE
         CORPORATION.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Nomura Asset
Acceptance Corporation ("NAAC") or the Trustee referred to below or any of their
affiliates or any other person. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed or insured by any governmental entity or by NAAC
or the Trustee or any of their affiliates or any other person. None of NAAC, the
Trustee or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that Nomura Securities International, Inc. is
the registered owner of the Percentage Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund"), generally consisting of conventional
first lien, adjustable rate mortgage loans secured by one- to four- family
residences, units in planned unit developments and individual condominium units
(collectively, the "Mortgage Loans") sold by NAAC. The Mortgage Loans were sold
by Nomura Credit & Capital, Inc. (the "Seller") to NAAC. The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), among NAAC, as


                                     A-5-2

<PAGE>

depositor (the "Depositor"), the Seller, as seller, GMAC Mortgage Corporation,
as servicer, and JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Certificate shall be made to any person
unless the transferee provides a certification pursuant to Section 6.02(b) of
the Agreement.

                                     A-5-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of Depositor, the Trustee or any such agent shall be affected

                                     A-5-4

<PAGE>

by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only if on such Distribution Date the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the earlier to occur of (i) expiration of 21 years after the death of
certain persons identified in the Agreement and (ii) the Assumed Final
Distribution Date.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-5-5

<PAGE>


                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.


Dated:  February __, 2005          JPMORGAN CHASE BANK, N.A.
                                   not in its individual capacity but solely
                                   as Trustee


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



                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class R Certificates referred to in the
within-mentioned Agreement.

                                         JPMORGAN CHASE BANK, N.A. Authorized
                                         signatory of JPMorgan Chase Bank, N.A.
                                         not in its individual capacity but
                                         solely as Trustee

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

                                       B-1

<PAGE>


                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                                        ________________________________________
                                        Signature by or on behalf of assignor


                                        ________________________________________
                                        Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.



<PAGE>



                                    EXHIBIT B


                             MORTGAGE LOAN SCHEDULE
                             ----------------------

         The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:

         (a) the loan number;

         (b) the Mortgage Rate in effect as of the Cut-off Date;

         (c) the Servicing Fee Rate;

         (d) the Net Mortgage Rate in effect as of the Cut-off Date;

         (e) the maturity date;

         (f) the original principal balance;

         (g) the Cut-off Date Principal Balance;

         (h) the original term;

         (i) the remaining term;

         (j) the property type;

         (k) the MIN with respect to each Mortgage Loan; and

         (l) the applicable Servicer.

                                      B-1

<PAGE>


                                   EXHIBIT C-1


                          FORM OF INITIAL CERTIFICATION


Nomura Asset Acceptance Corporation     JPMorgan Chase Bank, N.A.
2 World Financial Center, Building B    4 New York Plaza, 6th Floor
New York, New York 10281                New York, New York  10004
                                        Attention: ITS Structured
                                                   Finance Services,
                                        Nomura Asset Acceptance Corp. 2005-AR1

         Re:      Pooling and Servicing Agreement, dated as of
                  February 1, 2005, among Nomura Asset Acceptance
                  Corporation, as depositor, Nomura Credit & Capital,
                  Inc., as seller, GMAC Mortgage Corporation, as
                  servicer, and JPMorgan Chase Bank, N.A., as trustee,
                  issuing Mortgage-Pass Through Certificates, Series
                  2005-AR1 Ladies and Gentlemen:
                  ----------------------------------------------------


         In accordance with Section 2.02(a) of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as otherwise
noted on the attached exception report, that as to each Mortgage Loan listed on
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: (i) all documents required to be included
in the Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the Mortgage Loan Schedule as to Mortgagor Name,
original principal balance and loan number respecting such Mortgage Loan is
correct and accurately reflects the information in the Mortgage Loan File.

         The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv) and (vi) of the
third paragraph of Section 2.01 should be included in any Mortgage File. The
undersigned makes no representations as to: (i) the validity, legality,
enforceability, recordability, sufficiency, due authorization or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.

                                     C-1-1

<PAGE>


         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.



                                          JPMORGAN CHASE BANK, N.A.,
                                          as Custodian

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



                                     C-1-2

<PAGE>



                                   EXHIBIT C-2

                          FORM OF INTERIM CERTIFICATION


Nomura Asset Acceptance Corporation       JPMorgan Chase Bank, N.A.
2 World Financial Center, Building B      4 New York Plaza, 6th Floor
New York, New York 10281                  New York, New York  10004
                                          Attention: ITS Structured
                                                     Finance Services,
                                          Nomura Asset Acceptance Corp. 2005-AR1

         Re:      Pooling and Servicing Agreement, dated as of
                  February 1, 2005, among Nomura Asset Acceptance
                  Corporation, as depositor, Nomura Credit & Capital,
                  Inc., as seller, GMAC Mortgage Corporation, as
                  servicer, and JPMorgan Chase Bank, N.A., as trustee,
                  issuing Mortgage-Pass Through Certificates, Series
                  2005-AR1
                  ----------------------------------------------------

Ladies and Gentlemen:

         In accordance with Section 2.02(a) of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as otherwise
noted on the attached exception report, that as to each Mortgage Loan listed on
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: (i) all documents required to be included
in the Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the Mortgage Loan Schedule as to Mortgagor Name,
original principal balance and loan number respecting such Mortgage Loan is
correct and accurately reflects the information in the Mortgage Loan File.

         The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv) and (vi) of the
third paragraph of Section 2.01 should be included in any Mortgage File. The
undersigned makes no representations as to: (i) the validity, legality,
enforceability, recordabililty, sufficiency, due authorization or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.

                                      C-2-1

<PAGE>




         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                          JPMORGAN CHASE BANK, N.A.,
                                          as Custodian

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


                                      C-2-2

<PAGE>


                                   EXHIBIT C-3


                           FORM OF FINAL CERTIFICATION


Nomura Asset Acceptance Corporation      JPMorgan Chase Bank, N.A.
2 World Financial Center, Building B     4 New York Plaza, 6th Floor
New York, New York 10281                 New York, New York 10004
                                         Attention: ITS Structured
                                                    Finance Services,
                                         Nomura Asset Acceptance Corp. 2005-AR1

         Re:      Pooling and Servicing Agreement, dated as of
                  February 1, 2005, among Nomura Asset Acceptance
                  Corporation, as depositor, Nomura Credit & Capital,
                  Inc., as seller, GMAC Mortgage Corporation, as
                  servicer, and JPMorgan Chase Bank, N.A., as trustee,
                  issuing Mortgage-Pass Through Certificates, Series
                  2005-AR1
                  ---------------------------------------------------

Ladies and Gentlemen:

         In accordance with Section 2.02(b) of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as otherwise
noted on the attached exception report, that as to each Mortgage Loan listed on
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has received the documents set forth in Section
2.01 of the Agreement and has determined that (i) all documents required to be
included in the Mortgage File pursuant to the Pooling and Servicing Agreement
are in its possession; (ii) such documents have been reviewed by it and appear
regular on their face, have, where applicable, been executed and relate to such
Mortgage Loan; and (iii) based on examination by it, and only as to such
documents, the information set forth in the Mortgage Loan Schedule as to
Mortgagor name, original principal balance and loan number respecting such
Mortgage Loan is correct and accurately reflects the information in the Mortgage
Loan File.

         The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv) and (vi) of the
third paragraph of Section 2.01 of the Agreement should be included in any
Mortgage File. The undersigned makes no representations as to: (i) the validity,
legality, enforceability, recordability, sufficiency, due authorization or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.


                                      C-3-1

<PAGE>


         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.



                                       JPMORGAN CHASE BANK, N.A.
                                       as Custodian

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


                                      C-3-2

<PAGE>



                                    EXHIBIT D

                           FORM OF TRANSFER AFFIDAVIT

                                                Affidavit pursuant to Section
                                                860E(e)(4) of the Internal
                                                Revenue Code of 1986, as
                                                amended, and for other purposes

STATE OF          )
                  )ss:
COUNTY OF         )

         [NAME OF OFFICER], being first duly sworn, deposes and says:

         1. That he/she is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____] [the United States], on behalf of which
he makes this affidavit.

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Nomura Asset Acceptance
Corporation Alternative Loan Trust, Mortgage Pass Through Certificates, Series
2005-AR1, Class R Certificates (the "Residual Certificates") for the account of
a disqualified organization; (iii) it consents to any amendment of the Pooling
and Servicing Agreement that shall be deemed necessary by Nomura Asset
Acceptance Corporation (upon advice of counsel) to constitute a reasonable
arrangement to ensure that the Residual Certificates will not be owned directly
or indirectly by a disqualified organization; and (iv) it will not transfer such
Residual Certificates unless (a) it has received from the transferee an
affidavit in substantially the same form as this affidavit containing these same
four representations and (b) as of the time of the transfer, it does not have
actual knowledge that such affidavit is false.

         3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

         4. That the Investor's taxpayer identification number is
______________________.

                                       D-1

<PAGE>

         5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.

         6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.

         7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.

         IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.


                                          [NAME OF INVESTOR]


                                          By:
                                               ---------------------------------
                                                [Name of Officer]
                                                [Title of Officer]
                                                [Address of Investor for receipt
                                                of distributions]

                                                Address of Investor for receipt
                                                of tax information:

                                       D-2


<PAGE>



         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he/she
executed the same as his/her free act and deed and the free act and deed of the
Investor.

         Subscribed and sworn before me this ___ day of _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF


My commission expires the ___ day of ___________________, 20___.


                                       D-3


<PAGE>



                                    EXHIBIT E

                         FORM OF TRANSFEROR CERTIFICATE


                              ______________, 2005


Nomura Asset Acceptance Corporation
2 World Financial Center, Building B
New York, New York 10281

JPMorgan Chase Bank, N.A.
Institutional Trust Services
4 New York Plaza, 6th Floor
New York, New York 10004-2477
Attention: Nomura Asset Acceptance
 Corporation, Alternative Loan Trust, Series 2005-AR1

         Re:      Nomura Asset Acceptance Corporation Mortgage Pass-Through
                  Certificates, Series 2005-AR1, Class__
                  ---------------------------------------------------------

Ladies and Gentlemen:

         In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Mortgage Pass-Through Certificates, Series 2005-AR1, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of February 1, 2005, among Nomura
Asset Acceptance Corporation, as depositor (the "Depositor"), Nomura Credit &
Capital, Inc., as seller, GMAC Mortgage Corporation, as servicer, and JPMorgan
Chase Bank, N.A., as trustee (the "Trustee"). The Seller hereby certifies,
represents and warrants to, a covenants with, the Depositor and the Trustee
that:

         Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate 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 Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate 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 Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate 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 Certificate. The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.


                                       E-1


<PAGE>

                                          Very truly yours,


                                          --------------------------------------
                                          (Seller)


                                          By:___________________________________

                                          Name:_________________________________

                                          Title:________________________________



                                       E-2


<PAGE>



                                    EXHIBIT F

             FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)

                                ___________,2005


Nomura Asset Acceptance Corporation
2 World Financial Center
New York, New York 10281

JPMorgan Chase Bank, N.A.
Institutional Trust Services
4 New York Plaza, 6th Floor
New York, New York 10004
Attention: Nomura Asset Acceptance Corporation,
 Alternative Loan Trust, 2005-AR1

         Re:      Nomura Asset Acceptance Corporation, Alternative Loan Trust,
                  Mortgage Pass-Through Certificates, Series 2005-AR1
                  ------------------------------------------------------------

Ladies and Gentlemen:

         _______________ (the "Purchaser") intends to purchase from ____________
(the "Seller") $_________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 2005-AR1, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of February 1, 2005, among Nomura Asset
Acceptance Corporation, as depositor (the "Depositor"), Nomura Credit & Capital,
Inc., as seller, GMAC Mortgage Corporation, as servicer, and JPMorgan Chase
Bank, N.A., as trustee (the "Trustee"). All terms used herein and not otherwise
defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:

                  1.       The Purchaser understands that (a) the Certificates
                           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 Depositor
                           is not required to so register or qualify the
                           Certificates, (c) the Certificates 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 Pooling and
                           Servicing Agreement contains restrictions regarding
                           the transfer of the Certificates and (e) the
                           Certificates will bear a legend to the foregoing
                           effect.

                  2.       The Purchaser is acquiring the Certificates 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.

                                       F-1


<PAGE>

                  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 Certificates, such that it is capable
                           of evaluating the merits and risks of investment in
                           the Certificates, (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.

                  4.       The Purchaser has been furnished with, and has had an
                           opportunity to review (a) a copy of the Pooling and
                           Servicing Agreement and (b) such other information
                           concerning the Certificates, the Mortgage Loans and
                           the Depositor as has been requested by the Purchaser
                           from the Depositor or the Seller and is relevant to
                           the Purchaser's decision to purchase the
                           Certificates. The Purchaser has had any questions
                           arising from such review answered by the Depositor or
                           the Seller to the satisfaction of the Purchaser.

                  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 Certificate, any interest in any Certificate 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
                           Certificate, any interest in any Certificate or any
                           other similar security from any person in any manner,
                           (c) otherwise approach or negotiate with respect to
                           any Certificate, any interest in any Certificate 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
                           Certificate under the Act, that would render the
                           disposition of any Certificate 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 Certificates, except in
                           compliance with the provisions of the Pooling and
                           Servicing Agreement.

                                       F-2


<PAGE>




                                          Very truly yours,


                                          --------------------------------------
                                          (Purchaser)


                                          By:___________________________________

                                          Name:_________________________________

                                          Title:________________________________


                                       F-3

<PAGE>



                                    EXHIBIT G

                       FORM OF RULE 144A INVESTMENT LETTER

                                                                          [Date]
Nomura Credit & Capital, Inc.
2 World Financial Center, Building B
New York, New York 10281

Nomura Asset Acceptance Corporation
2 World Financial Center
New York, New York 10281

JPMorgan Chase Bank, N.A.
Institutional Trust Services
4 New York Plaza, 6th Floor
New York, New York 10004

         Re:      Nomura Asset Acceptance Corporation, Alternative Loan Trust,
                  Mortgage Pass-Through Certificates, Series 2005-AR1 (the
                  "Certificates"), including the Class Certificates (the
                  "Private Certificates")
                  ------------------------------------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Private Certificates, we confirm
that:

                  (i)      we understand that the Private Certificates are not
                           being registered under the Securities Act of 1933, as
                           amended (the "Act") or any applicable state
                           securities or "Blue Sky" laws, and are being sold to
                           us in a transaction that is exempt from the
                           registration requirements of such laws;

                  (ii)     any information we desired concerning the
                           Certificates, including the Private Certificates, the
                           trust in which the Certificates represent the entire
                           beneficial ownership interest (the "Trust") or any
                           other matter we deemed relevant to our decision to
                           purchase Private Certificates has been made available
                           to us;

                  (iii)    we are able to bear the economic risk of investment
                           in Private Certificates; we are an institutional
                           "accredited investor" as defined in Section 501(a) of
                           Regulation D promulgated under the Act and a
                           sophisticated institutional investor and we agree to
                           obtain a representation from any transferee that such
                           transferee is an institutional "accredited investor"
                           so long as we are required to obtain a representation
                           letter regarding compliance with the Act;


                                       G-1

<PAGE>

                  (iv)     we are acquiring Private Certificates for our own
                           account, not as nominee for any other person, and not
                           with a present view to any distribution or other
                           disposition of the Private Certificates;

                  (v)      we agree the Private Certificates must be held
                           indefinitely by us (and may not be sold, pledged,
                           hypothecated or in any way disposed of) unless
                           subsequently registered under the Act and any
                           applicable state securities or "Blue Sky" laws or an
                           exemption from the registration requirements of the
                           Act and any applicable state securities or "Blue Sky"
                           laws is available;

                  (vi)     we agree that in the event that at some future time
                           we wish to dispose of or exchange any of the Private
                           Certificates (such disposition or exchange not being
                           currently foreseen or contemplated), we will not
                           transfer or exchange any of the Private Certificates
                           unless:

                           (A) (1) the sale is to an Eligible Purchaser (as
                           defined below), (2) if required by the Pooling and
                           Servicing Agreement (as defined below) a letter to
                           substantially the same effect as either this letter
                           or, if the Eligible Purchaser is a Qualified
                           Institutional Buyer as defined under Rule 144A of the
                           Act, the Rule 144A and Related Matters Certificate in
                           the form attached to the Pooling and Servicing
                           Agreement (as defined below) (or such other
                           documentation as may be acceptable to the Trustee) is
                           executed promptly by the purchaser and delivered to
                           the addressees hereof and (3) all offers or
                           solicitations in connection with the sale, whether
                           directly or through any agent acting on our behalf,
                           are limited only to Eligible Purchasers and are not
                           made by means of any form of general solicitation or
                           general advertising whatsoever; and

                           (B) if the Private Certificate is not registered
                           under the Act (as to which we acknowledge you have no
                           obligation), the Private Certificate is sold in a
                           transaction that does not require registration under
                           the Act and any applicable state securities or "blue
                           sky" laws and, if JPMorgan Chase Bank, N.A. (the
                           "Trustee") so requests, a satisfactory Opinion of
                           Counsel is furnished to such effect, which Opinion of
                           Counsel shall be an expense of the transferor or the
                           transferee;

                  (vii)    we agree to be bound by all of the terms (including
                           those relating to restrictions on transfer) of the
                           Pooling and Servicing, pursuant to which the Trust
                           was formed; we have reviewed carefully and understand
                           the terms of the Pooling and Servicing Agreement;

                  (viii)   we either: (i) are not acquiring the Privately
                           Offered Certificate directly or indirectly by, or on
                           behalf of, an employee benefit plan or other
                           retirement arrangement which is subject to Title I of
                           the Employee Retirement Income Security Act of 1974,
                           as amended, and/or section 4975 of the

                                       G-2
<PAGE>

                           Internal Revenue Code of 1986, as amended, or (ii)
                           are providing the opinion of counsel specified in
                           Section 6.02(b) of the Agreement.

                  (ix)     we understand that each of the Class ___ Certificates
                           bears, and will continue to bear, legends
                           substantially to the following effect: "THIS
                           CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
                           UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                           "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
                           LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
                           CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
                           REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
                           ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
                           APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
                           UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
                           THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
                           INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
                           (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
                           PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
                           HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
                           PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
                           RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
                           REGISTRATION PROVIDED BY RULE 144 UNDER THE
                           SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
                           FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
                           THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
                           (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
                           WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
                           PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
                           VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
                           RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
                           THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
                           RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
                           ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
                           PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
                           SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
                           CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
                           LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
                           JURISDICTION.

                           NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY
                           PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A
                           CERTIFICATION PURSUANT TO SECTION 6.02(b) OF THE
                           AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO
                           THE TRUSTEE THAT THE PURCHASE AND HOLDING OF THIS
                           CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
                           NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED

                                       G-3
<PAGE>

                           TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
                           RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
                           ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT
                           SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE SERVICER TO
                           ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
                           UNDERTAKEN IN THE AGREEMENT, ALL IN ACCORDANCE WITH
                           SECTION 6.02(b) OF THE AGREEMENT.

         "Eligible Purchaser" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.

         Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of February 1, 2005,
between Nomura Asset Acceptance Corporation, as depositor, Nomura Credit &
Capital, Inc., as seller, GMAC Mortgage Corporation, as servicer, and JPMorgan
Chase Bank, N.A., as Trustee (the "Pooling and Servicing Agreement').

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

Name of Nominee (if any):
                          ---------------------------

                                       G-4

<PAGE>



         IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.

                                     Very truly yours,

                                     [PURCHASER]

                                     By:
                                        ----------------------------------------
                                                   (Authorized Officer)

                                              [By:
                                                  ------------------------------
                                                       Attorney-in-fact]

                                       G-5

<PAGE>



                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                     [NAME OF NOMINEE]

                                     By:
                                        ----------------------------------------
                                                   (Authorized Officer)

                                              [By:
                                                  ------------------------------
                                                       Attorney-in-fact]


                                       G-6

<PAGE>


                                    EXHIBIT H


                        REQUEST FOR RELEASE OF DOCUMENTS

To:      JPMorgan Chase Bank, N.A.
         Institutional Trust Services
         4 New York Plaza, 6th Floor
         New York, New York 10004-2477

RE:      Pooling and Servicing Agreement dated as of February 1, 2005, among
         Nomura Asset Acceptance Corporation, as depositor, Nomura Credit &
         Capital, Inc., as seller, GMAC Mortgage Corporation, as servicer, and
         JPMorgan Chase Bank, N.A., as Trustee

         In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.

Mortgage Loan Number:
---------------------

Mortgagor Name, Address & Zip Code:
-----------------------------------

Reason for Requesting Documents (check one):
--------------------------------------------

_____      1.       Mortgage Paid in Full and proceeds have
`                   been deposited into the Custodial Account

_____      2.       Foreclosure

_____      3.       Substitution

_____      4.       Other Liquidation

____       5.       Nonliquidation Reason:
                                           ---------------------

_____      6.       Mortgage Loan paid in full


                                      By:
                                          --------------------------------------
                                               (authorized signer)

                                      Issuer:
                                               ---------------------------------
                                      Address:
                                                --------------------------------

                                      Date:
                                            ------------------------------------


                                       H-1
<PAGE>


                                    EXHIBIT I


                          DTC Letter of Representations
                             [provided upon request]



                                       I-1

<PAGE>


                                    EXHIBIT J


                   Schedule of Mortgage Loans with Lost Notes

                                     [None]






                                       J-1

<PAGE>



                                    EXHIBIT K

                           Prepayment Charge Schedule







                                       K-1


<PAGE>

                                    EXHIBIT L


                        FORM OF SERVICER'S CERTIFICATION

         Re:      Pooling and Servicing Agreement (the "Pooling and Servicing
                  Agreement"), dated as of February 1, 2005, by and among Nomura
                  Asset Acceptance Corporation, as depositor (the "Depositor"),
                  Nomura Credit & Capital, Inc., as seller (the "Seller"),
                  JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), GMAC
                  Mortgage Corporation, as servicer, ("GMAC")

I, [identify the certifying individual], certify to the Depositor and the
Trustee, and their officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:

1.       I am responsible for reviewing the activities performed by GMAC under
         the Pooling and Servicing Agreement and based upon my knowledge and the
         annual compliance review required under the Pooling and Servicing
         Agreement, and except as disclosed in the annual compliance statement
         required to be delivered to the Trustee in accordance with the terms of
         the Pooling and Servicing Agreement (which has been so delivered to the
         Trustee), GMAC has fulfilled its obligations under the Pooling and
         Servicing Agreement. Based upon my knowledge, the annual statement of
         compliance delivered by GMAC under the Pooling and Servicing Agreement
         does not contain any untrue statement of material fact or omit to state
         a material fact necessary to make the statements made, in light of the
         circumstances under which such statement was made, not misleading; and

2.       Based on my knowledge, all significant deficiencies relating to GMAC's
         compliance with the minimum servicing standards for purposes of the
         report provided by an independent public accountant, after conducting a
         review conducted in compliance with the Uniform Single Attestation
         Program for Mortgage Bankers or similar procedure, as set forth in the
         Pooling and Servicing Agreement, have been disclosed to such accountant
         and are included in such reports.


Date:    _________________________


-------------------------------
[Signature] [Title]


                                       L-1
<PAGE>



                                    EXHIBIT M

                         FORM OF TRUSTEE'S CERTIFICATION

[DEPOSITOR/ISSUER NAME]

Re:      [Transaction Name]

Reference is made to the Pooling and Servicing Agreement, dated as of February
1, 2005 (the "Pooling and Servicing Agreement"), by and among JPMorgan Chase
Bank, N.A. (the "Trustee"), GMAC Mortgage Corporation, as servicer,
("Servicer"), Nomura Asset Acceptance Corporation, as depositor (the
"Depositor") and Nomura Credit & Capital, Inc., as seller (the "Seller"). The
Trustee, hereby certifies to the Depositor, and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:

         (i)      The Trustee has reviewed the annual report on Form 10-K for
                  the fiscal year [ ], and all reports on Form 8-K containing
                  distribution reports filed in respect of periods included in
                  the year covered by that annual report, relating to the
                  above-referenced trust;

         (ii)     Based solely upon the information provided to us by the
                  Servicer, the information set forth in the reports referenced
                  in (i) above does not contain any untrue statement of material
                  fact; and

         (iii)    Based on my knowledge, the distribution information required
                  to be provided by the Trustee under the Pooling and Servicing
                  Agreement is included in these reports.


Date:

                                    JPMorgan Chase Bank, N.A., as Trustee

                                    By:      ____________________________
                                    Name:    ____________________________
                                    Title:   ____________________________



                                       M-1


<PAGE>


                                    EXHIBIT N


APPENDIX E - STANDARD & POOR'S ANTI-PREDATORY LENDING CATEGORIZATION


Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.

<TABLE>
<CAPTION>
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------

---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective       Category under Applicable
                                                         Date                          Anti-Predatory Lending Law
---------------------------------------------------------------------------------------------------------------------
Arkansas                           Arkansas Home Loan Protection Act, Ark. Code          High Cost Home Loan
                                   Ann. ss.ss. 23-53-101 et seq.

                                   Effective July 16, 2003
---------------------------------------------------------------------------------------------------------------------
Cleveland Heights, OH              Ordinance No. 72-2003 (PSH), Mun. Code ss.ss.         Covered Loan
                                   757.01 et seq.

                                   Effective June 2, 2003
---------------------------------------------------------------------------------------------------------------------
Colorado                           Consumer Equity Protection, Colo. Stat. Ann. ss.ss.   Covered Loan
                                   5-3.5-101 et seq.

                                   Effective for covered loans offered or entered
                                   into on or after January 1, 2003. Other
                                   provisions of the Act took effect on June 7,
                                   2002
---------------------------------------------------------------------------------------------------------------------
Connecticut                        Connecticut Abusive Home Loan Lending Practices       High Cost Home Loan
                                   Act, Conn. Gen. Stat. ss.ss. 36a-746 et seq.

                                   Effective October 1, 2001
---------------------------------------------------------------------------------------------------------------------
District of Columbia               Home Loan Protection Act, D.C. Code ss.ss.            Covered Loan
                                   26-1151.01 et seq.

                                   Effective for loans closed on or after January
                                   28, 2003
---------------------------------------------------------------------------------------------------------------------
Florida                            Fair Lending Act, Fla. Stat. Ann. ss.ss. 494.0078     High Cost Home Loan
                                   et seq.

                                   Effective October 2, 2002
---------------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - Mar. 6,    Georgia Fair Lending Act, Ga. Code Ann. ss.ss.        High Cost Home Loan
2003)                              7-6A-1 et seq.

                                   Effective October 1, 2002 - March 6, 2003
---------------------------------------------------------------------------------------------------------------------
Georgia as amended (Mar. 7, 2003   Georgia Fair Lending Act, Ga. Code Ann. ss.ss.        High Cost Home Loan
- current)                         7-6A-1 et seq.

                                   Effective for loans closed on or after March 7,
                                   2003
</TABLE>


                                       N-2
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
HOEPA Section 32                   Home Ownership and Equity Protection Act of           High Cost Loan
                                   1994, 15 U.S.C. ss. 1639, 12 C.F.R. ss.ss.
                                   226.32 and 226.34

                                   Effective October 1, 1995, amendments October
                                   1, 2002
---------------------------------------------------------------------------------------------------------------------
Illinois                           High Risk Home Loan Act, Ill. Comp. Stat. tit.        High Risk Home Loan
                                   815, ss.ss. 137/5 et seq.

                                   Effective January 1, 2004 (prior to this
                                   date, regulations under Residential Mortgage
                                   License Act effective from May 14, 2001)
---------------------------------------------------------------------------------------------------------------------
Kansas                             Consumer Credit Code, Kan. Stat. Ann. ss.ss.          High Loan to Value Consumer
                                   16a-1-101 et seq.                                     Loan (id. ss. 16a-3-207) and;
                                                                                         ----------------------------
                                   Sections 16a-1-301 and 16a-3-207 became               High APR Consumer Loan (id.
                                   effective April 14, 1999; Section 16a-3-308a          ss. 16a-3-308a)
                                   became effective July 1, 1999
---------------------------------------------------------------------------------------------------------------------
Kentucky                           2003 KY H.B. 287 - High Cost Home Loan Act, Ky.       High Cost Home Loan
                                   Rev. Stat. ss.ss. 360.100 et seq.

                                   Effective June 24, 2003
---------------------------------------------------------------------------------------------------------------------
Maine                              Truth in Lending, Me. Rev. Stat. tit. 9-A, ss.ss.     High Rate High Fee Mortgage
                                   8-101 et seq.

                                   Effective September 29, 1995 and as amended
                                   from time to time
---------------------------------------------------------------------------------------------------------------------
Massachusetts                      Part 40 and Part 32, 209 C.M.R. ss.ss. 32.00 et       High Cost Home Loan
                                   seq. and 209 C.M.R. ss.ss. 40.01 et seq.

                                   Effective March 22, 2001 and amended from time
                                   to time
---------------------------------------------------------------------------------------------------------------------
Nevada                             Assembly Bill No. 284, Nev. Rev. Stat. ss.ss.         Home Loan
                                   598D.010 et seq.

                                   Effective October 1, 2003
---------------------------------------------------------------------------------------------------------------------
New Jersey                         New Jersey Home Ownership Security Act of 2002,       High Cost Home Loan
                                   N.J. Rev. Stat. ss.ss. 46:10B-22 et seq.

                                   Effective for loans closed on or after December
                                   27, 2003
---------------------------------------------------------------------------------------------------------------------
New Mexico                         Home Loan Protection Act, N.M. Rev. Stat. ss.ss.      High Cost Home Loan
                                   58-21A-1 et seq.

                                   Effective as of January 1, 2004; Revised as of
                                   February 26, 2004
---------------------------------------------------------------------------------------------------------------------
New York                           N.Y. Banking Law Article 6-l                          High Cost Home Loan

                                   Effective for applications made on or after
                                   April 1, 2003
</TABLE>

                                      N-3
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
North Carolina                     Restrictions and Limitations on High Cost Home        High Cost Home Loan
                                   Loans, N.C. Gen. Stat. ss.ss. 24-1.1E et seq.

                                   Effective July 1, 2000; amended October 1,
                                   2003 (adding open-end lines of credit)
---------------------------------------------------------------------------------------------------------------------
Ohio                               H.B. 386 (codified in various sections of the         Covered Loan
                                   Ohio Code), Ohio Rev. Code Ann. ss.ss. 1349.25
                                   et  seq.

                                   Effective May 24, 2002
---------------------------------------------------------------------------------------------------------------------
Oklahoma                           Consumer Credit Code (codified in various             Subsection 10 Mortgage
                                   sections of Title 14A)

                                   Effective July 1, 2000; amended effective
                                   January 1, 2004
---------------------------------------------------------------------------------------------------------------------
South Carolina                     South Carolina High Cost and Consumer Home            High Cost Home Loan
                                   Loans Act, S.C. Code Ann. ss.ss. 37-23-10 et seq.

                                   Effective for loans taken on or after January
                                   1, 2004
---------------------------------------------------------------------------------------------------------------------
West Virginia                      West Virginia Residential Mortgage Lender,            West Virginia Mortgage Loan
                                   Broker and Servicer Act, W. Va. Code Ann. ss.ss.      Act Loan
                                   31-17-1 et seq.

                                   Effective June 5, 2002
---------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
---------------------------------------------

---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective         Category under Applicable
                                                         Date                            Anti-Predatory Lending Law
---------------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - Mar. 6,    Georgia Fair Lending Act, Ga. Code Ann. ss.ss.        Covered Loan
2003)                              7-6A-1 et seq.

                                   Effective October 1, 2002 - March 6, 2003
---------------------------------------------------------------------------------------------------------------------
New Jersey                         New Jersey Home Ownership Security Act of 2002,       Covered Home Loan
                                   N.J. Rev. Stat. ss.ss. 46:10B-22 et seq.

                                   Effective December 27, 2003 - July 5, 2004
---------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------

---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective         Category under Applicable
                                                         Date                            Anti-Predatory Lending Law
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------

---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
Georgia (Oct. 1, 2002 - Mar. 6,    Georgia Fair Lending Act, Ga. Code Ann. ss.ss.        Home Loan
2003)                              7-6A-1 et seq.

                                   Effective October 1, 2002 - March 6, 2003
---------------------------------------------------------------------------------------------------------------------
New Jersey                         New Jersey Home Ownership Security Act of 2002,       Home Loan
                                   N.J. Rev. Stat. ss.ss. 46:10B-22 et seq.

                                   Effective for loans closed on or after December
                                   27, 2003
---------------------------------------------------------------------------------------------------------------------
New Mexico                         Home Loan Protection Act, N.M. Rev. Stat. ss.ss.      Home Loan
                                   58-21A-1 et seq.

                                   Effective as of January 1, 2004; Revised as of
                                   February 26, 2004
---------------------------------------------------------------------------------------------------------------------
North Carolina                     Restrictions and Limitations on High Cost Home        Consumer Home Loan
                                   Loans, N.C. Gen. Stat. ss.ss. 24-1.1E et seq.

                                   Effective July 1, 2000; amended October 1,
                                   2003 (adding open-end lines of credit)
---------------------------------------------------------------------------------------------------------------------
South Carolina                     South Carolina High Cost and Consumer Home            Consumer Home Loan
                                   Loans Act, S.C. Code Ann. ss.ss. 37-23-10 et seq.

                                   Effective for loans taken on or after January
                                   1, 2004
---------------------------------------------------------------------------------------------------------------------
</TABLE>


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