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



                                  CWABS, INC.,

                                    Depositor

                          COUNTRYWIDE HOME LOANS, INC.,

                                     Seller

                      COUNTRYWIDE HOME LOANS SERVICING LP,

                                 Master Servicer

                                       and

                              THE BANK OF NEW YORK,

                                     Trustee
                     ______________________________________

                         POOLING AND SERVICING AGREEMENT

                            Dated as of March 1, 2004
                     ______________________________________

                   ASSET-BACKED CERTIFICATES, SERIES 2004-BC1






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







<PAGE>



                               TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

                                   ARTICLE I.

                                   DEFINITIONS
Section 1.01   Defined Terms...................................................2

                                   ARTICLE II.

                          CONVEYANCE OF MORTGAGE LOANS;
Section 2.01   Conveyance of Mortgage Loans...................................45
Section 2.02   Acceptance of the Mortgage Loans...............................49
Section 2.03   Representations, Warranties and Covenants of the Master
               Servicer and the Seller........................................51
Section 2.04   Representations and Warranties of the Depositor................63
Section 2.05   Delivery of Opinion of Counsel in Connection with
               Substitutions and Repurchases..................................65
Section 2.06   Authentication and Delivery of Certificates....................66
Section 2.07   Covenants of the Master Servicer...............................66

                                  ARTICLE III.

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS
Section 3.01   Master Servicer to Service Mortgage Loans......................67
Section 3.02   Subservicing; Enforcement of the Obligations of
               Master Servicer................................................68
Section 3.03   Rights of the Depositor, the Seller and the Trustee in
               Respect of the Master Servicer.................................68
Section 3.04   Trustee to Act as Master Servicer..............................69
Section 3.05   Collection of Mortgage Loan Payments; Certificate Account;
               Distribution Account; Seller Shortfall Interest Requirement....69
Section 3.06   Collection of Taxes, Assessments and Similar Items;
               Escrow Accounts................................................72
Section 3.07   Access to Certain Documentation and Information Regarding
               the Mortgage Loans.............................................73
Section 3.08   Permitted Withdrawals from the Certificate Account,
               Distribution Account and the Carryover Reserve Fund............73
Section 3.09   [Reserved.]....................................................76
Section 3.10   Maintenance of Hazard Insurance................................76
Section 3.11   Enforcement of Due-On-Sale Clauses; Assumption Agreements......76


                                        i

<PAGE>


Section 3.12   Realization Upon Defaulted Mortgage Loans; Determination of
               Excess Proceeds and Realized Losses; Repurchase of Certain
               Mortgage Loans.................................................78
Section 3.13   Trustee to Cooperate; Release of Mortgage Files................81
Section 3.14   Documents, Records and Funds in Possession of Master
               Servicer to be Held for the Trustee............................82
Section 3.15   Servicing Compensation.........................................82
Section 3.16   Access to Certain Documentation................................83
Section 3.17   Annual Statement as to Compliance..............................83
Section 3.18   Annual Independent Public Accountants' Servicing Statement;
               Financial Statements...........................................83
Section 3.19   The Corridor Contract. ........................................84
Section 3.20   Prepayment Charges. ...........................................84

                                   ARTICLE IV.

                                DISTRIBUTIONS AND
                         ADVANCES BY THE MASTER SERVICER
Section 4.01   Advances.......................................................86
Section 4.02   Reduction of Servicing Compensation in Connection with
               Prepayment Interest Shortfalls.................................87
Section 4.03   [Reserved].....................................................87
Section 4.04   Distributions..................................................87
Section 4.05   Monthly Statements to Certificateholders.......................92
Section 4.06   [Reserved].....................................................95
Section 4.07   [Reserved].....................................................95
Section 4.08   Carryover Reserve Fund.........................................95
Section 4.09   Distributions on the REMIC I Regular Interests.................96
Section 4.10   [Reserved].....................................................97
Section 4.11   Allocation of Realized Losses on the REMIC I Regular
               Interests......................................................97
Section 4.12   The Class P Certificates.......................................98

                                   ARTICLE V.

                                THE CERTIFICATES
Section 5.01   The Certificates...............................................99
Section 5.02   Certificate Register; Registration of Transfer and Exchange
               of Certificates................................................99
Section 5.03   Mutilated, Destroyed, Lost or Stolen Certificates.............103
Section 5.04   Persons Deemed Owners.........................................104
Section 5.05   Access to List of Certificateholders' Names and Addresses.....104
Section 5.06   Book-Entry Certificates.......................................104
Section 5.07   Notices to Depository.........................................105


                                       ii

<PAGE>



Section 5.08   Definitive Certificates.......................................106
Section 5.09   Maintenance of Office or Agency...............................106

                                   ARTICLE VI.

                THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01   Respective Liabilities of the Depositor, the Master
               Servicer and the Seller.......................................107
Section 6.02   Merger or Consolidation of the Depositor, the Master
               Servicer or the Seller........................................107
Section 6.03   Limitation on Liability of the Depositor, the Seller,
               the Master Servicer and Others................................107
Section 6.04   Limitation on Resignation of Master Servicer..................108
Section 6.05   Errors and Omissions Insurance; Fidelity Bonds................108

                                  ARTICLE VII.

                     DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01   Events of Default.............................................110
Section 7.02   Trustee to Act; Appointment of Successor......................111
Section 7.03   Notification to Certificateholders............................113

                                  ARTICLE VIII.

                             CONCERNING THE TRUSTEE
Section 8.01   Duties of Trustee.............................................114
Section 8.02   Certain Matters Affecting the Trustee.........................115
Section 8.03   Trustee Not Liable for Mortgage Loans.........................116
Section 8.04   Trustee May Own Certificates..................................116
Section 8.05   Master Servicer to Pay Trustee's Fees and Expenses............116
Section 8.06   Eligibility Requirements for Trustee..........................117
Section 8.07   Resignation and Removal of Trustee............................117
Section 8.08   Successor Trustee.............................................118
Section 8.09   Merger or Consolidation of Trustee............................119
Section 8.10   Appointment of Co-Trustee or Separate Trustee.................119
Section 8.11   Tax Matters...................................................120

                                   ARTICLE IX.

                                   TERMINATION
Section 9.01   Termination upon Liquidation or Repurchase of
               all Mortgage Loans............................................124
Section 9.02   Final Distribution on the Certificates........................124


                                      iii

<PAGE>



Section 9.03   Additional Termination Requirements...........................126

                                   ARTICLE X.

                            MISCELLANEOUS PROVISIONS
Section 10.01  Amendment.....................................................127
Section 10.02  Recordation of Agreement; Counterparts........................128
Section 10.03  Governing Law.................................................129
Section 10.04  Intention of Parties..........................................129
Section 10.05  Notices.......................................................129
Section 10.06  Severability of Provisions....................................130
Section 10.07  Assignment....................................................131
Section 10.08  Limitation on Rights of Certificateholders....................131
Section 10.09  Inspection and Audit Rights...................................132
Section 10.10  Certificates Nonassessable and Fully Paid.....................132


                                    EXHIBITS

EXHIBIT A-1        Form of Class A-1 Certificate
EXHIBIT A-2        Form of Class M-1 Certificate
EXHIBIT A-3        Form of Class M-2 Certificate
EXHIBIT A-4        Form of Class M-3 Certificate
EXHIBIT A-5        Form of Class M-4 Certificate
EXHIBIT A-6        Form of Class M-5 Certificate
EXHIBIT A-7        Form of Class B Certificate
EXHIBIT B          Form of Class C Certificate
EXHIBIT C          Form of Class P Certificate
EXHIBIT D          Form of Class A-R Certificate
EXHIBIT E          Form of Tax Matters Person Certificate
EXHIBIT F          Mortgage Loan Schedules
EXHIBIT F-1        List of Mortgage Loans
EXHIBIT F-2        Mortgage Loans for which All or a Portion of
                      a Related Mortgage File is not Delivered to the
                      Trustee on or prior to the Closing Date
EXHIBIT G          Forms of Certification of Trustee
EXHIBIT G-1        Form of Initial Certification of Trustee
EXHIBIT G-2        Form of Interim Certification of Trustee
EXHIBIT G-3        Form of Delay Delivery Certification
EXHIBIT G-4        [Reserved]
EXHIBIT H          Form of Final Certification of Trustee
EXHIBIT I          Transfer Affidavit


                                       iv

<PAGE>



EXHIBIT J-1        Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2        Form of Transferor Certificate for Private Certificates
EXHIBIT K          Form of Investment Letter (Non-Rule 144A)
EXHIBIT L          Form of Rule 144A Letter
EXHIBIT M          Request for Release (for Trustee)
EXHIBIT N          Request for Release (for Mortgage Loans Paid in
                      Full, Repurchased or Replaced)
EXHIBIT O          Copy of Depositary Agreement
EXHIBIT P          Form of Mortgage Note and Mortgage
EXHIBIT Q          [reserved]
EXHIBIT R          Form of Corridor Contract
EXHIBIT S          Form of Corridor Contract Assignment Agreement
EXHIBIT T          Officer's Certificate with Respect to Prepayments




                                        v

<PAGE>



                  POOLING AND SERVICING AGREEMENT, dated as of March 1, 2004, by
and among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller (the "Seller"),
COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership, as master
servicer (the "Master Servicer") and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").

                             PRELIMINARY STATEMENT:

         The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in ten
classes, which in the aggregate will evidence the entire beneficial ownership
interest in the Mortgage Loans (as defined herein).

                                     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 (exclusive of the Corridor Contract and the Carryover Reserve
Fund) 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 Class 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, remittance rate (the "Uncertificated
REMIC I Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC I (the "REMIC I Regular Interests").
The "latest possible maturity date" (determined solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC I
Regular Interest shall be the 360th Distribution Date. None of the REMIC I
Regular Interests will be certificated.

                     Uncertificated        Uncertificated
                        REMIC I               Principal          Latest Possible
Designation        Pass-Through Rate           Balance            Maturity Date
-----------        -----------------       ---------------        -------------
   LT-AA                  (1)             $1,019,199,235.89       January 2034
   LT-A1                  (1)             $    8,595,600.00       January 2034
   LT-M1                  (1)             $      650,000.00       January 2034
   LT-M2                  (1)             $      520,000.00       January 2034
   LT-M3                  (1)             $      156,000.00       January 2034
   LT-M4                  (1)             $      156,000.00       January 2034
   LT-M5                  (1)             $      130,000.00       January 2034
    LT-B                  (1)             $      104,000.00       January 2034
   LT-ZZ                  (1)             $   10,488,384.41       January 2034
    LT-P                  (1)             $          100.00       January 2034
    LT-R                  (1)             $          100.00       January 2034
_______________


                                        1

<PAGE>



     (1)  Calculated as provided in the definition of Uncertificated REMIC I
          Pass-Through Rate.

                                    REMIC II
                                    --------

         As provided herein, the Trustee will elect 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 Class R-II Interest will represent the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions under federal income
tax law. The following table irrevocably sets forth the designation,
Pass-Through Rate, aggregate Initial Certificate Principal Balance and Final
Scheduled Distribution Date for each Class of Certificates comprising the
interests representing "regular interests" in REMIC II. The "latest possible
maturity date" (determined solely for purposes of satisfying Treasury Regulation
Section 1.860G-1(a)(4)(iii)) for each Class of REMIC II Regular Certificates
shall be the 360th Distribution Date.

                                        AGGREGATE INITIAL
                                      CERTIFICATE PRINCIPAL     FINAL SCHEDULED
DESIGNATION      PASS-THROUGH RATE           BALANCE           DISTRIBUTION DATE
-----------      -----------------    ---------------------    -----------------
 Class A-1              (1)               $859,560,000.00         April 2034
 Class M-1              (1)               $ 65,000,000.00        February 2034
 Class M-2              (1)               $ 52,000,000.00        January 2034
 Class M-3              (1)               $ 15,600,000.00        October 2033
 Class M-4              (1)               $ 15,600,000.00         August 2033
 Class M-5              (1)               $ 13,000,000.00          May 2033
  Class B               (1)               $ 10,400,000.00        October 2032
  Class C               (2)               $  8,839,900.00        February 2034
  Class P               (3)               $        100.00        February 2034

_______________
(1)      Interest will accrue at a rate equal to the Pass-Through Rate, as
         defined herein.
(2)      The Class C Certificates will accrue interest on a Notional Balance as
         described in the definition of Current Interest. The Class C
         Certificates will not accrue interest on their Certificate Principal
         Balance.
(3)      The Class P Certificates will not be entitled to distributions of
         interest.

                                   ARTICLE I.

                                   DEFINITIONS

         Section 1.01      DEFINED TERMS.

         In addition to those defined 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


                                        2

<PAGE>



meanings:

         ACCRUAL PERIOD: With respect to any Distribution Date and the
Certificates (other than the Class A-R, Class P and Class C Certificates), the
period commencing on the immediately preceding Distribution Date (or, in the
case of the first Distribution Date, from and including the Closing Date) and
ending on the day immediately preceding the current Distribution Date. With
respect to any Distribution Date and the Class C Certificates, the calendar
month preceding the month in which such Distribution Date occurs. All
calculations of interest on the Certificates (other than the Class C
Certificates) will be made on the basis of the actual number of days elapsed in
the related Accrual Period and on a 360-day year. All calculations of interest
on the Class C Certificates will be made on the basis of a 360-day year
consisting of twelve 30-day months. The Class A-R Certificates and Class P
Certificates will not accrue any interest and therefore have no Accrual Period.

         ACTUARIAL MORTGAGE LOAN: Any Mortgage Loan other than a Simple Interest
Mortgage Loan.

         ADJUSTABLE RATE MORTGAGE LOANS: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable for the
life of the related Mortgage, including any Mortgage Loans delivered in
replacement thereof.

         ADJUSTED NET MORTGAGE RATE: As to each Mortgage Loan, the Mortgage Rate
less the Expense Fee Rate.

         ADJUSTMENT DATE: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.

         ADVANCE: The aggregate of the advances required to be made by the
Master Servicer with respect to any Distribution Date pursuant to Section 4.01,
the amount of any such advances being equal to the sum of (A) the aggregate of
payments of principal and interest on the Actuarial Mortgage Loans and payments
of interest on the Simple Interest Mortgage Loans (in each case, net of the
Servicing Fees) on the Mortgage Loans that were due on the related Due Date and
not received by the Master Servicer as of the close of business on the related
Determination Date and (B) with respect to each REO Property that has not been
liquidated, an amount equal to the excess, if any, of (x) one month's interest
(adjusted to the Net Mortgage Rate) on the Stated Principal Balance of the
related Mortgage Loan over (y) the net monthly rental income (if any) from such
REO Property deposited in the Certificate Account for such Distribution Date
pursuant to Section 3.12, less the aggregate amount of any such delinquent
payments that the Master Servicer has determined would constitute a
Nonrecoverable Advance were an advance to be made with respect thereto.
Notwithstanding the foregoing, all references to scheduled interest or interest
due on a related Due Date with respect to a Simple Interest Mortgage Loan will
mean an amount equal to the excess of (i) 30 days' interest at the applicable
Net Mortgage Rate on the Stated Principal Balance of such Simple Interest
Mortgage Loan as of the last day of the related Due Period over (ii) the portion
of any monthly payment received from the borrower during the related Due Period
which was allocable to interest.


                                        3

<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 Certificate 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 Date and (ii) Principal Prepayments and Liquidation Proceeds
received in respect of such Mortgage Loans after the last day of the related
Prepayment Period or Due Period, respectively.

         APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date,
the sum of the Realized Losses with respect to the Mortgage Loans which are to
be applied in reduction of the Certificate Principal Balance the most
subordinate Class of Subordinate Certificates outstanding pursuant to this
Agreement, which shall equal the amount, if any, by which, Certificate Principal
Balance of all Certificates (after all distributions of principal on such
Distribution Date) exceeds the Stated Principal Balance of the Mortgage Loans
for such Distribution Date, less the amount of the increase in the related
Certificate Principal Balance due to receipt of Subsequent Recoveries.

         APPRAISED VALUE: The appraised value of the Mortgaged Property based
upon the appraisal made for the Seller by a fee appraiser at the time of the
origination of the related Mortgage Loan, or the sales price of the Mortgaged
Property at the time of such origination, whichever is less, or 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.

         BANKRUPTCY CODE:  Title 11 of the United States Code.

         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 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.

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

         CARRYOVER RESERVE FUND: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-BC1". Funds in the Carryover Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement and shall


                                        4

<PAGE>



not be a part of any REMIC created under this Agreement.

         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-7, Exhibit B, Exhibit C and Exhibit D.

         CERTIFICATE ACCOUNT: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans Servicing LP in trust for registered holders of CWABS, Inc., Asset- Backed
Certificates, Series 2004-BC1". Funds in the Certificate Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.

         CERTIFICATE ACCOUNT DEPOSIT: An amount equal to the aggregate of all
amounts in respect of (i) principal of the Mortgage Loans due on or after the
Cut-off Date and received by the Master Servicer before the Closing Date and not
applied in computing the Cut-off Date Principal Balance thereof, and (ii)
interest on the Mortgage Loans due on and after the Cut-off Date and received by
the Master Servicer before the Closing Date.

         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 Certificate (other than the
Class C Certificates) 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 pursuant to Section
4.04, and (ii) in the case of any Subordinate Certificate, any Applied Realized
Loss Amounts allocated to such Certificate on previous Distribution Dates
pursuant to Section 4.04; provided that, the Certificate Principal Balance of
the Class of Subordinate Certificates with the highest payment priority to which
Realized Losses have been allocated shall be increased by the amount of any
Subsequent Recoveries on the Mortgage Loans not previously allocated, but not by
more than the amount of Realized Losses previously allocated to reduce the
Certificate Principal Balance of that Class. As to any Class C Certificate and
as of any Distribution Date, an amount equal to the excess, if any, of (i) the
aggregate Stated Principal Balance of the Mortgage Loans over (ii) the aggregate
Certificate Principal Balance of the 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.

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02
hereof.

         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 Class of Regular Certificates, except that
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any affiliate of the
Depositor


                                        5

<PAGE>



shall be deemed not to be Outstanding and the Voting Interest evidenced thereby
shall not be taken into account in determining whether the requisite amount of
Voting Interests necessary to effect such consent has been obtained; provided
that if any such Person (including the Depositor) owns 100% of the Voting
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof (other than the
second sentence of Section 10.01 hereof) that requires the consent of the
Holders of Certificates of a particular Class as a condition to the taking of
any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.

         CLASS: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.

         CLASS A-1 CERTIFICATE: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.

         CLASS A-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class A-1 Certificates.

         CLASS A-1 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1 Pass-Through Rate on
the Class A-1 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

         CLASS A-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class A-1 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class A-1 Certificates
with respect to interest on such prior Distribution Dates.

         CLASS A-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class A-1 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class A-1
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class A-1
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class A-1 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class A-1 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class A-1 Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS A-1 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 0.230% per annum and, for any Distribution Date after the
Optional Termination Date, 0.460% per annum.

         CLASS A-1 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class A-1 Margin and (ii) the Net Rate Cap for such
Distribution Date.


                                        6

<PAGE>



         CLASS A-1 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
excess of (i) the Certificate Principal Balance of the Class A-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (x) 64.70%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution Date
minus the OC Floor.

         CLASS A-R CERTIFICATE: Any one of the Class A-R Certificates executed
by the Trustee substantially in the form annexed hereto as Exhibit D, composed
of the Class R-I Interest and Class R-II Interest, and evidencing an interest
designated as a "residual interest" in REMIC I and REMIC II for purposes of the
REMIC Provisions.

         CLASS A-R CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class A-R Certificates.

         CLASS A-R PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess, if any, of (A) $100 over (B) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04.

         CLASS B CERTIFICATE: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.

         CLASS B CERTIFICATE PRINCIPAL BALANCE: As of any date of determination,
the Certificate Principal Balance of the Class B Certificates.

         CLASS B CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class B Pass-Through Rate on
the Class B Certificate Principal Balance immediately prior to such Distribution
Date, plus any amount previously distributed with respect to interest for such
Class that is recovered as a voidable preference by a trustee in bankruptcy.

         CLASS B INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class B Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class B Certificates with
respect to interest on such prior Distribution Dates.

         CLASS B INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class B Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class B
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class B
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class B Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class B Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class B Pass-Through Rate (without giving effect to the Net Rate Cap).



                                        7

<PAGE>



         CLASS B MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 2.900% per annum and, for any Distribution Date after the
Optional Termination Date, 4.350% per annum.

         CLASS B PASS-THROUGH RATE: For any Distribution Date, the lesser of (i)
One-Month LIBOR plus the Class B Margin and (ii) the Net Rate Cap for such
Distribution Date.

         CLASS B PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date the excess of (i) the sum of: (A) the Certificate Principal Balance of the
Class A-1 Certificates (after taking into account distribution of the Class A-1
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date), and (G) the Class B Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 97.70%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class A-1 Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the Class M-4 Certificate Principal Balance and the Class M-5
Certificate Principal Balance have been reduced to zero, the Class B Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.

         CLASS C CERTIFICATE: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein.

         CLASS C CURRENT INTEREST: For any Distribution Date, the interest
accrued on the Class C Notional Amount during the related Accrual Period at the
Class C Pass-Through Rate plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

         CLASS C NOTIONAL AMOUNT: The aggregate amount of the Uncertificated
Principal Balance of the REMIC II Regular Interests other than REMIC I Regular
Interest LT-P and REMIC I Regular Interest LT-R.

         CLASS C PASS-THROUGH RATE: A rate per annum equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (A)


                                        8

<PAGE>



through (J) below, and the denominator of which is the Uncertificated Principal
Balance of the REMIC I Regular Interests (other than REMIC I Regular Interest
LT-P and REMIC I Regular Interest LT-R). For purposes of calculating the
Pass-Through Rate for the Class C 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 LT-AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-AA;

         (B) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT-A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-A1;

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

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

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

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

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

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

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

         (J) 100% of the interest distributed on REMIC I Regular Interest LT-P.



                                        9

<PAGE>



         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 distributions as set forth herein.

         CLASS M- 1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-1 Certificates.

         CLASS M-1 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

         CLASS M-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-1 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-1 Certificates
with respect to interest.

         CLASS M-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class M-1 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-1
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class M-1
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-1 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-1 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-1 Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS M-1 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 0.500% per annum and, for any Distribution Date after the
Optional Termination Date, 0.750% per annum.

         CLASS M-1 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-1 Margin and (ii) the Net Rate Cap for such
Distribution Date.

         CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of (A) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account distribution of
the Class A-1 Principal Distribution Amount on such Distribution Date) and (B)
the Class M-1 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (x) 77.20% of the Stated Principal
Balances of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Class A-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance, the Class M-3 Certificate Principal
Balance, the Class M-4 Certificate Principal Balance, the Class M-5 Certificate
Principal Balance and the Class B Certificate Principal Balance have been
reduced to


                                       10

<PAGE>



zero, the Class M-1 Principal Distribution Amount for such Distribution Date
will equal 100% of the Principal Distribution Amount for such Distribution Date.

         CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.

         CLASS M-2 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-2 Certificates.

         CLASS M-2 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

         CLASS M-2 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-2 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-2 Certificates
with respect to interest on such prior Distribution Dates.

         CLASS M-2 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class M-2 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-2
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class M-2
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-2 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-2 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-2 Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS M-2 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 1.070% per annum and, for any Distribution Date after the
Optional Termination Date, 1.605% per annum.

         CLASS M-2 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-2 Margin and (ii) the Net Rate Cap for such
Distribution Date.

         CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account distribution of
the Class A-1 Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distribution
of the Class M-1 Principal Distribution Amount on such Distribution Date) and
(C) the Class M-2 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (x) 87.20% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal


                                       11

<PAGE>



Balance of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date minus the OC Floor; provided,
however, that after the Class A-1 Certificate Principal Balance, the Class M-1
Certificate Principal Balance, the Class M-3 Certificate Principal Balance, the
Class M-4 Certificate Principal Balance, the Class M-5 Certificate Principal
Balance and the Class B Certificate Principal Balance have been reduced to zero,
the Class M-2 Principal Distribution Amount for such Distribution Date will
equal 100% of the Principal Distribution Amount for such Distribution Date.

         CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.

         CLASS M-3 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-3 Certificates.

         CLASS M-3 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

         CLASS M-3 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-3 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-3 Certificates
with respect to interest on such prior Distribution Dates.

         CLASS M-3 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class M-3 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-3
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class M-3
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-3 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-3 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-3 Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS M-3 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 1.400% per annum and, for any Distribution Date after the
Optional Termination Date, 2.100% per annum.

         CLASS M-3 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-3 Margin and (ii) the Net Rate Cap for such
Distribution Date.

         CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account distribution of
the Class A-1 Principal Distribution Amount on such Distribution Date), (B)


                                       12

<PAGE>



the Class M-1 Certificate Principal Balance (after taking into account
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (C) the Class M-2 Certificate Principal Balance (after taking into
account distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (D) the Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 90.20%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class A-1 Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-4 Certificate
Principal Balance, the Class M-5 Certificate Principal Balance and the Class B
Certificate Principal Balance have been reduced to zero, the Class M-3 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.

         CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.

         CLASS M-4 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-4 Certificates.

         CLASS M-4 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

         CLASS M-4 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-4 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-4 Certificates
with respect to interest on such prior Distribution Dates.

         CLASS M-4 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class M-4 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-4
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class M-4
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-4 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-4 Interest Carryover Amount for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon at
the Class M-4 Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS M-4 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 1.650% per annum and, for any Distribution Date after the
Optional Termination Date, 2.475% per annum.


                                       13

<PAGE>



         CLASS M-4 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-4 Margin and (ii) the Net Rate Cap for such
Distribution Date.

         CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account distribution of
the Class A-1 Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distribution
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class M-3 Certificate Principal Balance (after taking into
account distribution of the Class M-3 Principal Distribution Amount on such
Distribution Date), and (E) the Class M-4 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 93.20%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class A-1 Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the Class M-5 Certificate Principal Balance and the Class B
Certificate Principal Balance have been reduced to zero, the Class M-4 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.

         CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.

         CLASS M-5 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-5 Certificates.

         CLASS M-5 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

         CLASS M-5 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-5 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-5 Certificates
with respect to interest on such prior Distribution Dates.

         CLASS M-5 INTEREST CARRYOVER AMOUNT: For any Distribution Date on which
the Pass-Through Rate for the Class M-5 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-5
Certificates would otherwise have accrued for such Distribution Date had such
rate been calculated as the sum of One-Month LIBOR and the applicable Class M-5
Margin for such Distribution Date, over (ii) the amount of interest accrued on
the Class M-5 Certificates at the Net Rate Cap for such Distribution Date and
(B) the Class M-5 Interest


                                       14

<PAGE>



Carryover Amount for all previous Distribution Dates not previously paid
pursuant to Section 4.04, together with interest thereon at the Class M-5
Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS M-5 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 1.750% per annum and, for any Distribution Date after the
Optional Termination Date, 2.625% per annum.

         CLASS M-5 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-5 Margin and (ii) the Net Rate Cap for such
Distribution Date.

         CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Certificate Principal
Balance of the Class A-1 Certificates (after taking into account distribution of
the Class A-1 Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distribution
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Class M-3 Certificate Principal Balance (after taking into
account distribution of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class M-4 Certificate Principal Balance (after
taking into account distribution of the Class M-4 Principal Distribution Amount
on such Distribution Date), and (F) the Class M-5 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 95.70%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class A-1 Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the Class M-4 Certificate Principal Balance and the Class B
Certificate Principal Balance have been reduced to zero, the Class M-5 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.

         CLASS P CERTIFICATE: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.

         CLASS P CERTIFICATE PRINCIPAL BALANCE: As of any date of determination,
the Certificate Principal Balance of the Class P Certificates.

         CLASS P DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Class P Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-BC1".



                                       15

<PAGE>



         CLASS P PRINCIPAL DISTRIBUTION DATE: The first Distribution Date that
occurs after the end of the latest Prepayment Charge Period for all Mortgage
Loans that have a Prepayment Charge Period.

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

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

         CLOSING DATE: March 31, 2004.

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

         COMPENSATING INTEREST: With respect to any Distribution Date, an amount
equal to one-half of the Servicing Fee, to be applied to the interest portion of
any Prepayment Interest Shortfall on the Mortgage Loans pursuant to Section 4.02
hereof.

         CONFIRMATION AND AGREEMENT: The Confirmation and Agreement dated
February 26, 2004, reference number FXNEC5731, evidencing the Corridor Contract.

         CORPORATE TRUST OFFICE: The designated office of the Trustee in the
State of New York 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 101 Barclay Street, New York, New York
10286 (Attention: Corporate Trust MBS Administration), telephone: (212)
815-3236, facsimile: (212) 815-3986.

         CORRESPONDING CERTIFICATE: With respect to each REMIC I Regular
Interest set forth below, the Regular Certificate set forth in the table below:


                 REMIC I REGULAR INTEREST           REMIC II CERTIFICATE
                          LT-A1                           Class A-1
                          LT-M1                           Class M-1
                          LT-M2                           Class M-2
                          LT-M3                           Class M-3
                          LT-M4                           Class M-4
                          LT-M5                           Class M-5
                           LT-B                            Class B
                           LT-P                            Class P
                          LT-AR                           Class A-R

         CORRIDOR CONTRACT: The transaction evidenced by the Confirmation And
Agreement (as assigned to the Trustee pursuant to the Corridor Contract
Assignment Agreement), a form of which is attached hereto as Exhibit R.



                                       16

<PAGE>



         CORRIDOR CONTRACT ASSIGNMENT AGREEMENT: The Assignment Agreement
regarding the Corridor Contract dated as of the Closing Date among the Seller,
the Trustee and the Corridor Contract Counterparty, a form of which is attached
hereto as Exhibit S.

         CORRIDOR CONTRACT COUNTERPARTY: Bear Stearns Financial Products Inc.,
and any permitted successors and assigns pursuant to Corridor Contract.

         CORRIDOR CONTRACT PAYMENT AMOUNT: The amount, if any, received by the
Trustee for the benefit of the Trust Fund in respect of the Corridor Contract.

         CORRIDOR CONTRACT TERMINATION DATE: The Distribution Date in August
2010.

         CUMULATIVE LOSS TRIGGER EVENT: With respect to a Distribution Date on
or after the Stepdown Date exists if the aggregate amount of Realized Losses on
the Mortgage Loans from (and including) the Cut-off Date for each Mortgage Loan
to (and including) the last day of the related Due Period exceeds the applicable
percentage, for such Distribution Date, of the Cut-off Date Principal Balance of
the Mortgage Loans, as set forth below:


Distribution Date                               Percentage
-----------------                               ----------
April 2007-- March 2008......... 3.25% with respect to April 2007, plus an
                                 additional 1/12th of 1.25% for each month
                                 thereafter until March 2008
April 2008-- March 2009......... 4.50% with respect to April 2008, plus an
                                 additional 1/12th of 0.75% for each month
                                 thereafter until March 2009
April 2009-- March 2010......... 5.25% with respect to April 2009, plus an
                                 additional 1/12th of 0.25% for each month
                                 thereafter until March 2010
April 2010-- and thereafter..... 5.50%

         CURRENT INTEREST: With respect to (i) the Class A-1 Certificates, the
Class A-1 Current Interest, (ii) the Class M-1 Certificates, the Class M-1
Current Interest, (iii) the Class M-2 Certificates, the Class M-2 Current
Interest, (iv) the Class M-3 Certificates, the Class M-3 Current Interest, (v)
the Class M-4 Certificates, the Class M-4 Current Interest, (vi) the Class M-5
Certificates, the Class M-5 Current Interest, (vii) the Class B Certificates,
the Class B Current Interest and (viii) the Class C Certificates, the Class C
Current Interest.

         CUT-OFF DATE: In the case of any Mortgage Loan, the later of (x) March
1, 2004 and (y) the date of origination of such Mortgage Loan. When used with
respect to any Mortgage Loans "the Cut-off Date" shall mean the related Cut-off
Dates.

         CUT-OFF DATE PRINCIPAL BALANCE: As to any Actuarial Mortgage Loan, the
unpaid principal


                                       17

<PAGE>



balance thereof as of the close of business on the Cut-off Date after
application of all payments of principal due on or prior to the Cut-off Date,
whether or not received, and all Principal Prepayments received on or prior to
the Cut-off Date, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date. As to any Simple
Interest Mortgage Loan, the unpaid principal balance thereof as of the close of
business on the Cut-off Date after application of all payments of principal made
on or prior to the Cut-off Date and all Principal Prepayments received on or
prior to the Cut-off Date.

         DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.

         DEFINITIVE CERTIFICATES:  As defined in Section 5.06.

         DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.

         DELAY DELIVERY MORTGAGE LOANS: The Mortgage Loans identified on the
schedule of Mortgage Loans hereto set forth on Exhibit F-2 hereof for which all
or a portion of a related Mortgage File is not delivered to the Trustee on or
prior to the Closing Date. The Depositor shall deliver (or cause delivery of)
the Mortgage Files to the Trustee: (A) with respect to at least 50% of the
Mortgage Loans, not later than the Closing Date, (B) with respect to at least an
additional 40% of the Mortgage Loans, not later than 20 days after the Closing
Date, and (C) with respect to the remaining 10% of the Mortgage Loans, not later
than 30 days after the Closing Date. To the extent that the Seller shall be in
possession of any Mortgage Files with respect to any Delay Delivery Loan, until
delivery to of such Mortgage File to the Trustee as provided in Section 2.01,
the Seller shall hold such files as agent and in trust for the Trustee.

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

         DELINQUENCY TRIGGER EVENT: With respect to any Distribution Date on or
after the Stepdown Date, a Delinquency Trigger Event exists if the product of
(i) 2.29 and (ii) the Rolling Delinquency Percentage equals or exceeds the
Required Percentage.

         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


                                       18

<PAGE>



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 Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.

         DEPOSITOR: CWABS, Inc., 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
O.

         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.

         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: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Bank of New York,
in trust for registered holders of CWABS, Inc., Asset-Backed Certificates,
Series 2004-BC1". Funds in the Distribution Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement.

         DISTRIBUTION ACCOUNT DEPOSIT DATE: As to any Distribution Date, 1:00
p.m. Pacific time on the Business Day immediately preceding such Distribution
Date.

         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 April 2004.



                                       19

<PAGE>



         DUE DATE: With respect to any Mortgage Loan and Due Period, the due
date for scheduled payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.

         DUE PERIOD: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the first day of the 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 (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, if Moody's is not a Rating Agency) 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 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. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.

         ELIGIBLE REPURCHASE MONTH:  As defined in Section 3.12(c) hereof.

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

         ERISA-RESTRICTED CERTIFICATES: The Class A-R, Class C and Class P
Certificates.

         EVENT OF DEFAULT:  As defined in Section 7.01 hereof.

         EXCESS CASHFLOW: With respect to any Distribution Date the sum of (i)
the amount remaining after the distribution of interest to Certificateholders
for such Distribution Date pursuant to Section 4.04(a)(vii), and (ii) the amount
remaining after the distribution of principal to Certificateholders for such
Distribution Date pursuant to Section 4.04(d)(i)(A) or 4.04(d)(ii)(G).

         EXCESS PROCEEDS: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (i) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (ii) interest at
the Mortgage Rate from the Due Date as to which interest was


                                       20

<PAGE>



last paid or advanced to Certificateholders (and not reimbursed to the Master
Servicer) up to the Due Date in the month in which such Liquidation Proceeds are
required to be distributed on the Stated Principal Balance of such Liquidated
Loan outstanding during each Due Period as to which such interest was not paid
or advanced.

         EXPENSE FEE RATE: The sum of (i) the Servicing Fee Rate and (ii) the
Trustee Fee Rate.

         EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the lesser of (1) the Overcollateralization Deficiency Amount for such
Distribution Date and (2) the Excess Cashflow for such Distribution Date
available for payment thereof pursuant to Section 4.04(e)(i).

         FANNIE MAE: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.

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

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

         FITCH RATINGS: Fitch, Inc., or any successor thereto.

         FIXED RATE MORTGAGE LOANS: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life of
the related Mortgage, including any Mortgage Loans delivered in replacement
thereof.

         FREDDIE MAC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.

         GROSS MARGIN: The percentage set forth in the related Mortgage Note for
the Adjustable Rate Mortgage Loans to be added to the Index for use in
determining the Mortgage Rate on each Adjustment Date, and which is set forth in
the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.

         INDEX: As to any Adjustable Rate Mortgage Loan on any Adjustment Date
related thereto, the index for the adjustment of the Mortgage Rate set forth as
such in the related Mortgage Note, such index in general being the average of
the London interbank offered rates for six-month U.S. dollar deposits in the
London market, as set forth in THE WALL STREET JOURNAL or some other source
generally accepted in the residential mortgage loan origination business and
specified in the related Mortgage Note, as most recently announced as of either
45 days prior to, or the first business day of the month immediately preceding
the month of, such Adjustment Date or, if the Index ceases to be published in
the original source or becomes unavailable for any reason, then the Index shall
be a new index selected by the Master Servicer, based on comparable information.


                                       21

<PAGE>



         INITIAL ADJUSTMENT DATE: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.

         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 MORTGAGE RATE: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.

         INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage Loans
pursuant to any Required 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 Master Servicer or the trustee under the deed of trust and are
not applied to the restoration of the related Mortgaged Property or released to
the Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account, in each case other
than any amount included in such Insurance Proceeds in respect of Insured
Expenses.

         INSURED EXPENSES: Expenses covered by a Required Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.

         INTEREST CARRY FORWARD AMOUNT: With respect to (i) the Class A-1
Certificates, the Class-A-1 Interest Carry Forward Amount, (ii) the Class M-1
Certificates, the Class M-1 Interest Carry Forward Amount, (iii) the Class M-2
Certificates, the Class M-2 Interest Carry Forward Amount, (iv) the Class M-3
Certificates, the Class M-3 Interest Carry Forward Amount, (v) the Class M-4
Certificates, the Class M-4 Interest Carry Forward Amount, (vi) the Class M-5
Certificates, the Class M-5 Interest Carry Forward Amount, and (vii) the Class B
Certificates, the Class B Interest Carry Forward Amount.

         INTEREST DETERMINATION DATE: With respect to the Certificates (other
than the Class A-R, Class C and Class P Certificates) for the first Accrual
Period, March 26, 2004. With respect to the Certificates (other than the Class
A-R, Class C and Class P Certificates) and any Accrual Period thereafter, the
second LIBOR Business Day preceding the commencement of such Accrual Period.

         INTEREST FUNDS: On any Distribution Date, the Interest Remittance
Amount less the Trustee Fee for the Mortgage Loans for such Distribution Date.

         INTEREST REMITTANCE AMOUNT: With respect to the Mortgage Loans and any
Master Servicer Advance Date, the sum, without duplication, of (i) all scheduled
interest collected during the related Due Period with respect to the Mortgage
Loans less the related Servicing Fee, (ii) interest payments on any Principal
Prepayments received during the related Prepayment Period other than Prepayment
Interest Excess, (iii) all related Advances relating to interest with respect to
the Mortgage Loans, (iv) all Compensating Interest with respect to the Mortgage
Loans, (v) Liquidation Proceeds with respect to the Mortgage Loans collected
during the related Due Period (to the extent such Liquidation


                                       22

<PAGE>



Proceeds relate to interest), and (vi) for the Master Servicer Advance Date in
April 2004, the Seller Shortfall Interest Requirement for such Master Servicer
Advance Date (if any), less all Nonrecoverable Advances relating to interest
reimbursed during the related Due Period.

         LATEST POSSIBLE MATURITY DATE:  The Distribution Date in January 2034.

         LIBOR BUSINESS DAY: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.

         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 Master Servicer has certified (in accordance with
Section 3.12) in the related Prepayment Period that it has received all amounts
it expects to receive in connection with such liquidation.

         LIQUIDATION PROCEEDS: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of Mortgage Loans,
whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Advances, Servicing Fees and Servicing
Advances.

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

         MARKER RATE: With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) multiplied by the weighted
average of the Uncertificated REMIC I Pass Through Rates for each REMIC I
Regular Interest (other than REMIC I Regular Interest LT-AA, REMIC I Regular
Interest LT-P and REMIC I Regular Interest LT-R), with the rates on each such
REMIC I Regular Interest subject to a cap equal to the Pass Through Rate for the
Corresponding Class for such REMIC I Regular Interest, and the rate on REMIC I
Regular Interest LT-ZZ subject to a cap of zero for purposes of this
calculation.

         MASTER SERVICER: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as master servicer
hereunder.

         MASTER SERVICER ADVANCE DATE: As to any Distribution Date, 1:00 p.m.
Pacific time on the Business Day immediately preceding such Distribution Date.

         MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note.



                                       23

<PAGE>



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

         MERS MORTGAGE LOAN: Any Mortgage Loan registered with MERS on the
MERS(R)System.

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

         MIN:  The Mortgage Identification Number for any MERS Mortgage Loan.

         MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.

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

         MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 4.05.

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

         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.

         MORTGAGE FILE: The mortgage documents listed in Section 2.01 hereof
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 LOAN: 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. Any Mortgage Loan
subject to repurchase by the Seller or Master Servicer as provided in this
Agreement, shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.

         MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Master 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, attached hereto as Exhibit F-1, setting
forth the following information with respect to each Mortgage Loan:

               (i) the loan number;


                                       24

<PAGE>



              (ii) the Appraised Value;

             (iii)         the Initial Mortgage Rate;

              (iv) the maturity date;

               (v) the original principal balance;

              (vi) the Cut-off Date Principal Balance;

             (vii) the first payment date of the Mortgage Loan;

            (viii) the Scheduled Payment in effect as of the Cut-off Date;

              (ix) the Loan-to-Value Ratio at origination;

               (x) a code indicating whether the residential dwelling at the
         time of origination was represented to be owner-occupied;

              (xi) a code indicating whether the residential dwelling is either
         (a) a detached single family dwelling (b) a condominium unit or (c) a
         two- to four-unit residential property;

             (xii) a code indicating whether the Mortgage Loan is a Simple
         Interest Mortgage Loan; and

            (xiii) with respect to each Adjustable Rate Mortgage Loan;

                  (a) the frequency of each Adjustment Date;

                  (b) the next Adjustment Date;

                  (c) the Maximum Mortgage Rate;

                  (d) the Minimum Mortgage Rate;

                  (e) the Mortgage Rate as of the Cut-off Date;

                  (f) the related Periodic Rate Cap;

                  (g) the Gross Margin; and

                  (h) the purpose of the Mortgage Loan.



                                       25

<PAGE>



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

         MORTGAGE POOL: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.

         MORTGAGE RATE: The annual rate of interest borne by a Mortgage Note
from time to time.

         MORTGAGED PROPERTY:  The underlying property securing a Mortgage Loan.

         MORTGAGOR:  The obligors on a Mortgage Note.

         NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the Servicing Fee Rate.

         NET RATE CAP: With respect to the Certificates (other than the Class
A-R, Class C or Class P Certificates), the weighted average Adjusted Net
Mortgage Rate of the Mortgage Loans, adjusted to an effective rate reflecting
the calculation of interest on the basis of the actual number of days elapsed
during the related interest accrual period and a 360-day year. For federal
income tax purposes, however, the equivalent of the foregoing is expressed as a
per annum rate equal to the weighted average of the REMIC I Pass-Through Rates
on the REMIC I Regular Interests, weighted on the Uncertificated Principal
Balance of each such REMIC I Regular Interest.

         NET RATE CARRYOVER: With respect to any Distribution Date, an amount
equal to the sum of (i) the Class A-1 Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class M-1 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class M-2 Interest Carryover Amount
for such Distribution Date (if any), (iv) the Class M-3 Interest Carryover
Amount for such Distribution Date (if any), (v) the Class M-4 Interest Carryover
Amount for such Distribution Date (if any), (vi) the Class M-5 Interest
Carryover Amount for such Distribution Date (if any), and (vii) the Class B
Interest Carryover Amount for such Distribution Date (if any); provided that
when the term Net Rate Carryover is used with respect to one Class of
Certificates (other than the Class A-R, Class C and Class P Certificates), it
shall mean such carryover amount listed in clauses (i), (ii), (iii) (iv), (v),
(vi) or (vii) as applicable, with the same Class designation. The Class A-R,
Class C and Class P Certificates shall not accrue any Net Rate Carryover.

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

         NONRECOVERABLE ADVANCE: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not or, in the case of a current delinquency, would
not, be ultimately recoverable by the Master Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.

         OC FLOOR: For any Distribution Date, 0.50% of the Stated Principal
Balance of the Mortgage


                                       26

<PAGE>



Loans as of the Cut-off Date.

         OFFERED CERTIFICATES: The Class A-1, Class A-R, Class M-1, Class M-2,
Class M-3, Class M- 4, Class M-5 and Class B Certificates.

         OFFICER'S CERTIFICATE: A certificate (i) in the case of the Depositor,
signed by the Chairman of the Board, the Vice Chairman of the Board, the
President, a Managing Director, 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, (ii) in the case of the
Master Servicer, (x) signed by the President, an Executive Vice President, a
Vice President, an Assistant Vice President, the Treasurer, or one of the
Assistant Treasurers or Assistant Secretaries or Countrywide GP, Inc., its
general partner, or (y) if provided for in this Agreement, signed by a Servicing
Officer, as the case may be, and delivered to the Depositor and the Trustee, as
the case may be, as required by this Agreement.

         ONE-MONTH LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
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; provided that the parties hereto acknowledge that One-Month
LIBOR calculated for the first Accrual Period shall equal 1.090% per annum. 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.

         OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either, and (iii) not be connected with the Depositor or the
Master Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.

         OPTIONAL TERMINATION: The termination of the Trust Fund provided
hereunder pursuant to the purchase of the Mortgage Loans pursuant to the last
sentence of Section 9.01 hereof.

         OPTIONAL TERMINATION DATE: Any Distribution Date on which the Stated
Principal Balance of the Mortgage Loans and REO Properties in the Trust Fund is
equal to or less than 10% of the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.

         ORIGINAL MORTGAGE LOAN: The mortgage loan refinanced in connection with
the origination


                                       27

<PAGE>



of a Refinancing Mortgage Loan.

         ORIGINAL VALUE: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal satisfactory to the Master Servicer or the sales price of
such property or, in the case of a refinancing, on an appraisal satisfactory to
the Master Servicer.

         OTS:  The Office of Thrift Supervision.

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

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

                  (ii) 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 Distribution Date, 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.

         OVERCOLLATERALIZED AMOUNT: For any Distribution Date, the amount, if
any, by which (x) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period exceeds (y) the aggregate
Certificate Principal Balance of the Offered Certificates as of such
Distribution Date (after giving effect to distributions in respect of the
Principal Remittance Amount on such Distribution Date).

         OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount for such Distribution Date (after
giving effect to distributions in respect of the Principal Remittance Amount for
such Distribution Date).

         OVERCOLLATERALIZATION TARGET AMOUNT: (a) On each date prior to the
Stepdown Date, an amount equal to 1.15% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans, and (b) on and after the Stepdown Date, an amount
equal to 2.30% of the aggregate Stated Principal Balance of the Mortgage Loans
in the Mortgage Pool for the current Distribution Date, subject to a minimum
amount equal to the OC Floor; provided, however, that, if on any Distribution
Date, a Trigger Event is in effect, the Overcollateralization Target Amount will
be the Overcollateralization Target Amount on the Distribution Date immediately
preceding 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


                                       28

<PAGE>



direct or indirect, legal or beneficial.

         PASS-THROUGH RATE: With respect to the Class A-1 Certificates, the
Class A-1 Pass-Through Rate; with respect to the Class M-1 Certificates, the
Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate; with respect to the Class M-3 Certificates, the
Class M-3 Pass-Through Rate; with respect to the Class M-4 Certificates, the
Class M-4 Pass-Through Rate; with respect to the Class M-5 Certificates, the
Class M-5 Pass-Through Rate; with respect to the Class B Certificates, the Class
B Pass-Through Rate and with respect to the Class C Certificates, the Class C
Pass-Through Rate.

         PERCENTAGE INTEREST: With respect to any Certificate (other than the
Class P, Class C or Class A-R Certificates), a fraction, expressed as a
percentage, the numerator of which is the Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
Certificate Principal Balance of the related Class. With respect to the Class C,
Class P and Class A-R Certificates, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such Certificate.

         PERIODIC RATE CAP: As to substantially all Adjustable Rate Mortgage
Loans and the related Mortgage Notes, the provision therein that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment Date
to not more than three percentage points.

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

                  (i) obligations of the United States or any agency thereof,
         provided such obligations are 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 each Rating Agency has confirmed in writing will not result
         in the downgrading or withdrawal of the ratings then assigned to the
         Certificates by such 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 each Rating Agency has
         confirmed in writing will not result in the downgrading or withdrawal
         of the ratings then assigned to the Certificates by such 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


                                       29

<PAGE>



         and/or state banking authorities, provided that the commercial paper
         and/or long term unsecured debt obligations of such depository
         institution or trust company (or in the case of the principal
         depository institution in a holding company system, the commercial
         paper or long-term unsecured debt obligations of such holding company,
         but only if Moody's is not a Rating Agency) are then rated one of the
         two highest long-term and the highest short-term ratings of each such
         Rating Agency for such securities, or such lower ratings as each Rating
         Agency has confirmed in writing will not result in the downgrading or
         withdrawal of the rating then assigned to the Certificates by such
         Rating Agency;

                  (vi) 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;

                  (vii) 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 (except if the
         Rating Agency is Moody's, such rating shall be the highest commercial
         paper rating of S&P for any such securities) or such lower rating as
         each Rating Agency has confirmed in writing will not result in the
         downgrading or withdrawal of the rating then assigned to the
         Certificates by such Rating Agency;

                  (viii) interests in any money market fund which at the date of
         acquisition of the interests in such fund and throughout the time such
         interests are held in such fund has the highest applicable long term
         rating by each Rating Agency or such lower rating as each Rating Agency
         has confirmed in writing will not result in the downgrading or
         withdrawal of the ratings then assigned to the Certificates by such
         Rating Agency;

                  (ix) short term investment funds sponsored by any trust
         company or national banking association incorporated under the laws of
         the United States or any state thereof which on the date of acquisition
         has been rated by each Rating Agency in their respective highest
         applicable rating category or such lower rating as each Rating Agency
         has confirmed in writing will not result in the downgrading or
         withdrawal of the ratings then assigned to the Certificates by such
         Rating Agency; and

                  (x) such other relatively risk free 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;

provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such


                                       30

<PAGE>



instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be invested in investments (other than money market
funds) treated as equity interests for Federal income tax purposes, unless the
Master Servicer shall receive an Opinion of Counsel, at the expense of Master
Servicer, to the effect that such investment will not adversely affect the
status of any such REMIC as a REMIC under the Code or result in imposition of a
tax on any such REMIC. Permitted Investments that are subject to prepayment or
call may not be purchased at a price in excess of par.

         PERMITTED TRANSFEREE: Any person other than (i) the United States, any
State or political subdivision thereof, 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
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, 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, or 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 unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W- 8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund 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 the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.

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


                                       31

<PAGE>



         POOL STATED PRINCIPAL BALANCE: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.

         PREPAYMENT ASSUMPTION: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to the Offered Certificates.

         PREPAYMENT CHARGE: As to a Mortgage Loan, any charge paid by a
Mortgagor in connection with certain partial prepayments and all prepayments in
full made within the related Prepayment Charge Period, the Prepayment Charges
with respect to each applicable Mortgage Loan being identified in the Prepayment
Charge Schedule.

         PREPAYMENT CHARGE PERIOD: As to any Mortgage Loan the period of time
during which a Prepayment Charge may be imposed.

         PREPAYMENT CHARGE SCHEDULE: As of any date, the list of Prepayment
Charges included in the Trust Fund on that date, (including the prepayment
charge summary attached thereto). The Prepayment Charge Schedule shall contain
the following information with respect to each Prepayment Charge:

                  (i) the Mortgage Loan account number;

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

                  (iii) the state of origination in which the related Mortgage
                  Property is located;

                  (iv) the first date on which a Monthly Payment is or was due
                  under the related Mortgage Note;

                  (v) the term of the Prepayment Charge;

                  (vi) the original principal amount of the related Mortgage
                  Loan; and

                  (vii) the Cut-off Date Principal Balance of the related
                  Mortgage Loan.

         The Prepayment Charge Schedule shall be amended from time to time by
the Master Servicer in accordance with this Agreement.

         PREPAYMENT INTEREST EXCESS: With respect to any Distribution Date, for
each Actuarial Mortgage Loan that was the subject of a Principal Prepayment
during the portion of the Prepayment Period from the related Due Date to the end
of such Prepayment Period, any payment of interest received in connection
therewith (net of any applicable Servicing Fee) representing interest accrued
for any portion of such month of receipt.


                                       32

<PAGE>



         PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during (i) the
Prepayment Period with respect to a Simple Interest Mortgage Loan or (ii) the
portion of the Prepayment Period from the beginning of such Prepayment Period to
the related Due Date in such Prepayment Period (in each case, other than a
Principal Prepayment in full resulting from the purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03, 2.04, 3.12 or 9.01 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 (or liquidation) or in the case of a partial Principal Prepayment on
the amount of such prepayment (or liquidation proceeds) exceeds (ii) the amount
of interest paid or collected in connection with such Principal Prepayment or
such liquidation proceeds.

         PREPAYMENT PERIOD: As to any Distribution Date, (i) with respect to
Actuarial Mortgage Loans, the period beginning with the opening of business on
the sixteenth day of the calendar month preceding the month in which such
Distribution Date occurs (or, with respect to the first Distribution Date, the
period from March 1, 2004) and ending on the close of business on the fifteenth
day of the month in which such Distribution Date occurs or (ii) with respect to
Simple Interest Mortgage Loans, the calendar month preceding such Distribution
Date.

         PRIME RATE: The prime commercial lending rate of The Bank of New York,
as publicly announced to be in effect from time to time. The Prime Rate shall be
adjusted automatically, without notice, on the effective date of any change in
such prime commercial lending rate. The Prime Rate is not necessarily the Bank
of New York's lowest rate of interest.

         PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date,
the sum of (i) the Principal Remittance Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount 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, 2.04, 3.12 and 9.01 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 date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.

         PRINCIPAL REMITTANCE AMOUNT: (a) The sum, without duplication, of: (i)
the scheduled principal collected with respect to the Actuarial Mortgage Loans
during the related Due Period or advanced on or before the related Master
Servicer Advance Date, (ii) prepayments collected in the related Prepayment
Period, with respect to the Actuarial Mortgage Loans and, with respect to the
Simple Interest Mortgage Loans, all payments received from the borrower which
are allocable to principal, (iii) the Stated Principal Balance of each Mortgage
Loan that was repurchased by the Seller or purchased by the Master Servicer,
(iv) the amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loans is less than the aggregate unpaid principal balance
of


                                       33

<PAGE>



any Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan and (v) all Liquidation Proceeds and Subsequent
Recoveries collected during the related Due Period (to the extent such
Liquidation Proceeds and Subsequent Recoveries related to principal); less (b)
all non-recoverable Advances relating to principal and certain expenses
reimbursed during the related Due Period.

         PRIVATE CERTIFICATES: The Class C Certificates and Class P
Certificates.

         PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated March 25, 2004,
relating to the public offering of the Offered Certificates offered thereby.

         PUD:  A Planned Unit Development.

         PURCHASE PRICE: With respect to any Mortgage Loan (x) required to be
(1) repurchased by the Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased by
the Depositor pursuant to Section 2.04 hereof, or (y) that the Master Servicer
has a right to purchase pursuant to Section 3.12 hereof, an amount equal to the
sum of (i) 100% of the unpaid principal balance (or, if such purchase or
repurchase, as the case may be, is effected by the Master Servicer, the Stated
Principal Balance) of the Mortgage Loan as of the date of such purchase, (ii)
accrued interest thereon at the applicable Mortgage Rate (or, if such purchase
or repurchase, as the case may be, is effected by the Master Servicer, at the
Net Mortgage Rate) from (a) the date through which interest was last paid by the
Mortgagor (or, if such purchase or repurchase, as the case may be, is effected
by the Master Servicer, the date through which interest was last advanced and
not reimbursed by the Master Servicer) to (b) the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders, and (iii) costs
and damages incurred by the Trust Fund in connection with a repurchase pursuant
to Section 2.03 hereof that arises out of a violation of any predatory or
abusive lending law which also constitutes an actual breach of representation
(xxxiv) of Section 2.03(b) hereof.

         RATING AGENCY: Each of Moody's and S&P. 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 Liquidated Loan, an amount (not
less than zero or more than the Stated Principal Balance of the Mortgage Loan)
as of the date of such liquidation, equal to (i) the Stated Principal Balance of
such Liquidated Loan as of the date of such liquidation, minus (ii) the
Liquidation Proceeds, if any, received in connection with such liquidation
during the month in which such liquidation occurs, to the extent applied as
recoveries of principal of the Liquidated Loan. With respect to each Mortgage
Loan that has become the subject of a Deficient Valuation, (i) if the value of
the related Mortgaged Property was reduced below the principal balance of the
related Mortgage Note, the amount by which the value of the Mortgaged Property
was reduced below


                                       34

<PAGE>



the principal balance of the related Mortgage Note, and (ii) if the principal
amount due under the related Mortgage Note has been reduced, 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 plus any reduction in the interest component
of the Scheduled Payments. With respect to each Mortgage Loan that has become
the subject of a Debt Service Reduction and any Distribution Date, the amount,
if any, by which the related Scheduled Payment was reduced. The amount of a
realized Loss on a Liquidated Mortgage Loan will be reduced by the amount of
Subsequent Recoveries received with respect to such Liquidated Mortgage Loan.

         RECORD DATE: With respect to any Distribution Date and the
Certificates, other than the Class A-R, Class C and Class P Certificates, the
Business Day immediately preceding such Distribution Date, or if such
Certificates are no longer Book-Entry Certificates, the last Business Day of the
month preceding the month of such Distribution Date. With respect to the Class
A-R, Class C and Class P Certificates, the last Business Day of the month
preceding the month of a Distribution Date.

         REFERENCE BANK RATE: With respect to any Accrual Period, 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 amounts approximately equal to the aggregate
Certificate Principal Balance of the Offered Certificates on such Interest
Determination Date, 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 U.S. dollars to leading European banks for a period of one
month in amounts approximately equal to the aggregate Certificate Principal
Balance of the Offered Certificates on such Interest Determination Date.

         REFERENCE BANKS: Barclays Bank PLC, Deutsche Bank and NatWest, N.A.,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor or
any affiliate thereof and (iii) which have been designated as such by the
Trustee.

         REFINANCING MORTGAGE LOAN: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.

         REGULAR CERTIFICATE: Any Offered Certificate other than a Class A-R
Certificate.



                                       35

<PAGE>



         RELIEF ACT:  The Servicemembers Civil Relief Act.

         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 a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of:
(i) the Mortgage Loans and the related Mortgage Files; (ii) all payments on and
collections in respect of the Mortgage Loans due after the Cut-off Date (other
than Monthly Payments due in March 2004 and reflected in the Cut-off Date
Principal Balance) as shall be on deposit in the Certificate Account and
identified as belonging to the Trust Fund; (iii) property which secured a
Mortgage Loan and which has been acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of foreclosure; (iv) Required
Insurance Policies pertaining to the Mortgage Loans, if any; and (v) all
proceeds of clauses (i) through (iv) above. The Corridor Contract and Carryover
Reserve Fund will not be assets of REMIC I.

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

         REMIC I OVERCOLLATERALIZED AMOUNT: With respect to any date of
determination, (i) 1.00% of the aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests minus (ii) the Uncertificated Principal Balances
of REMIC I Regular Interest LT-A1, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest
LT-M4, REMIC I Regular Interest LT-M5, REMIC I Regular Interest LT-B, REMIC I
Regular Interest LT-ZZ and REMIC I Regular Interest LT-P, in each case as of
such date of determination.

         REMIC I OVERCOLLATERALIZATION TARGET AMOUNT:1% of the
Overcollateralization Target Amount.

         REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the sum of the Uncertificated
Principal Balances of REMIC I Regular Interest LT-A1,REMIC I Regular Interest
LT- M1, REMIC I Regular Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I
Regular Interest LT-M4, REMIC I Regular Interest LT-M5 and REMIC I Regular
Interest LT-B and the denominator of which is the sum of the Uncertificated
Principal Balances of REMIC I Regular Interest LT-A1, REMIC I Regular Interest
LT-M1, REMIC I Regular Interest LT-M2, REMIC I Regular Interest LT- M3, REMIC I
Regular Interest LT-M4, REMIC I Regular Interest LT-M5, REMIC I Regular Interest
LT-B and REMIC I Regular Interest LT-ZZ.



                                       36

<PAGE>



         REMIC I REGULAR INTERESTS: REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT- A1, REMIC I Regular Interest LT-M1, REMIC I Regular
Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest LT-M4,
REMIC I Regular Interest LT-M5, REMIC I Regular Interest LT-B, REMIC I Regular
Interest LT-ZZ, REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R.

         REMIC I REGULAR INTEREST LT-AA: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-A1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-M1: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-M2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-M3: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-M4: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-M5: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-B: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance,


                                       37

<PAGE>



that bears interest at the related Uncertificated REMIC I Pass-Through Rate, and
that has such other terms as are described herein.

         REMIC I REGULAR INTEREST LT-ZZ: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-P: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-R: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC II REGULAR CERTIFICATES: Any of the Class A-1, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class B, Class C or Class P Certificates.

         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
temporary and final regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.

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

         REPLACEMENT MORTGAGE LOAN: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit N, (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)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (a) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (c) have the same Index, Periodic Rate Cap and intervals
between Adjustment Dates as that of the Deleted Mortgage Loan and a Gross Margin
not more than


                                       38

<PAGE>



1% per annum higher or lower than that of the Deleted Mortgage Loan; and (d) not
permit conversion of the related Mortgage Rate to a fixed Mortgage Rate; (iii)
have the same or higher credit quality characteristics than that of the Deleted
Mortgage Loan; (iv) at the time of transfer to the Trust Fund, be accruing
interest at a Mortgage Rate not more than 1% per annum higher or lower than that
of the Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio no higher than that
of the Deleted Mortgage Loan; (vi) have a remaining term to maturity no greater
than (and not more than one year less than) that of the Deleted Mortgage Loan;
(vii) not permit conversion of the Mortgage Rate from a fixed rate to a variable
rate or visa versa; (viii) provide for a prepayment charge on terms
substantially similar to those of the prepayment charge, if any, of the Deleted
Mortgage Loan; (ix) have the same lien priority as the Deleted Mortgage Loan;
(x) constitute the same occupancy type as the Deleted Mortgage Loan; (xi)
[reserved], and (xii) comply with each representation and warranty (other than a
statistical representation or warranty) set forth in Section 2.03 hereof.

         REQUEST FOR RELEASE: The Request for Release submitted by the Master
Servicer to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.

         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.

         REQUIRED PERCENTAGE: With respect to each Distribution Date on or after
the Stepdown Date, the fraction (expressed as a percentage) of (1) the numerator
of which is the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for the preceding Distribution Date over (b) the Certificate
Principal Balance of the most senior Class of Certificates outstanding as of the
preceding Master Servicer Advance Date and (2) the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans for the preceding
Distribution Date.

         RESPONSIBLE OFFICER: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee 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 the particular
subject.

         ROLLING DELINQUENCY PERCENTAGE: With respect to any Distribution Date
on or after the Stepdown Date, the average, over the past three months, of a
fraction (expressed as a percentage), (a) the numerator of which is the
aggregate Stated Principal Balance for such Distribution Date of all Mortgage
Loans 60 or more days delinquent as of the last day of the preceding month
(including Mortgage Loans in foreclosure, bankruptcy and REO Properties) and (b)
the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date.

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

         SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan due
on any Due


                                       39

<PAGE>



Date allocable to principal and/or interest on such Mortgage Loan.

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

         SELLER: Countrywide Home Loans, Inc., a New York corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.

         SELLER SHORTFALL INTEREST REQUIREMENT: For the Master Servicer Advance
Date in April 2004, an amount equal to 30 days interest on the Stated Principal
Balance of each Mortgage Loans that does not have a scheduled payment of
interest due in the related Due Period at the Net Mortgage Rates for such
Mortgage Loans.

         SENIOR CERTIFICATES: The Class A-R Certificates and Class A-1
Certificates.

         SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations hereunder, including, but not limited to, the cost of
(i) the preservation, restoration and protection of a Mortgaged Property, (ii)
any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.10.

         SERVICING FEE: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan or, in the event of any payment of
interest that accompanies a Principal Prepayment in full made by the Mortgagor,
interest at the Servicing Fee Rate on the Stated Principal Balance of such
Mortgage Loan for the period covered by such payment of interest.

         SERVICING FEE RATE: With respect to each Mortgage Loan, 0.50% per
annum.

         SERVICING OFFICER: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.

         SIMPLE INTEREST METHOD: The method of allocating a payment to principal
and interest pursuant to which the portion of such payment that is allocated to
interest is equal to the product of the fixed rate of interest multiplied by the
unpaid principal balance multiplied by the period of time elapsed since the
preceding payment of interest was received and divided by either 360 or 365, as
specified in the related Mortgage Note, and the remainder of such payment is
allocated to principal.

         SIMPLE INTEREST MORTGAGE LOAN: Any Mortgage Loan under which the
portion of a payment allocable to interest and the portion of such payment
allocable to principal is determined in accordance with the Simple Interest
Method.


                                       40

<PAGE>



         STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the unpaid principal balance of the
Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due (with respect to Actuarial Mortgage
Loans) or actually paid (with respect to Simple Interest Mortgage Loans) on or
prior to such date and irrespective any delinquency in payment by the related
mortgagor with respect to Actuarial Mortgage Loans, and (ii) as of any
Distribution Date, the Stated Principal Balance of the Mortgage Loan as of its
Cut-off Date, minus the sum of (a) the principal portion of (i) for the
Actuarial Mortgage Loans, the Scheduled Payments (x) due with respect to such
Mortgage Loan during each Due Period ending prior to such Distribution Date and
(y) that were received by the Master Servicer as of the close of business on the
Determination Date related to such Distribution Date or with respect to which
Advances were made as of the Master Servicer Advance Date related to such
Distribution Date, or (ii) for Simple Interest Mortgage Loans, actual payments
due with respect to the Mortgage Loans on or prior to the end of the most recent
Due Period that were received by the Master Servicer as of the close of business
on the Determination Date related to such Distribution Date, (b) all Principal
Prepayments with respect to such Mortgage Loan received by the Master Servicer
during each Prepayment Period ending prior to such Distribution Date, and (c)
all Liquidation Proceeds collected with respect to such Mortgage Loan during
each Due Period ending prior to such Distribution Date, to the extent applied by
the Master Servicer as recoveries of principal in accordance with Section 3.12.
The Stated Principal Balance of any Mortgage Loan that becomes a Liquidated Loan
will be zero on the Distribution Date following the Due Period in which such
Mortgage Loan becomes a Liquidated Loan. References herein to the Stated
Principal Balance the Mortgage Loans at any time shall mean the aggregate Stated
Principal Balances of all Mortgage Loans in the Trust Fund as of such time.

         STEPDOWN DATE: The earlier to occur of (i) the Distribution Date on
which the aggregate Certificate Principal Balance of the Senior Certificates is
reduced to zero and (ii) the later to occur of (a) the Distribution Date in
April 2007 or (b) the first Distribution Date on which the aggregate Certificate
Principal Balance of the Senior Certificates (after calculating anticipated
distributions on such Distribution Date) is less than or equal to 64.70% of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date.

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

         SUBSEQUENT RECOVERIES: Unexpected recoveries, net of reimbursable
expenses, with respect to Mortgage Loans that have been previously liquidated
and that resulted in a Realized Loss.

         SUBSERVICER:  As defined in Section 3.02(a).

         SUBSERVICING AGREEMENT:  As defined in Section 3.02(a).

         SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to


                                       41

<PAGE>



Section 2.03(c).

         SUBSTITUTION AMOUNT: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(c), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.

         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. Initially, this person shall be the
Trustee.

         TAX MATTERS PERSON CERTIFICATE: The Class A-R Certificate with a
Denomination of $0.05.

         THREE-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a Mortgage Rate
that is fixed for 36 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.

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

         TRIGGER EVENT: With respect to any Distribution Date on or after the
Stepdown Date, a Delinquency Trigger Event or a Cumulative Loss Trigger Event
with respect to that Distribution Date.

         TRUST FUND: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Certificate Account pursuant to Section 3.05(b)(ii); (ii) the
Certificate Account, the Distribution Account, the Carryover Reserve Fund, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) the Corridor Contract; (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 any insurance policies with respect
to the Mortgage Loan; and (vi) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.

         TRUSTEE: The Bank of New York, a New York banking corporation, 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.

         TRUSTEE ADVANCE RATE: With respect to any Advance made by the Trustee
pursuant to Section 4.01(b), a per annum rate of interest determined as of the
date of such Advance equal to the Prime Rate in effect on such date plus 5.00%.



                                       42

<PAGE>



         TRUSTEE FEE: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date.

         TRUSTEE FEE RATE: With respect to each Mortgage Loan, 0.009% per annum.

         TWO-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a Mortgage Rate
that is fixed for 24 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.

         UNCERTIFICATED ACCRUED INTEREST: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the related
Uncertificated Pass-Through Rate for such Distribution Date, accrued on the
Uncertificated Principal, immediately prior to such Distribution Date.
Uncertificated Accrued Interest for the Uncertificated Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months. For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC I Regular Interests for any Distribution Date, the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first, to Uncertificated Accrued Interest payable to REMIC I
Regular Interest LT-AA and REMIC I Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%,
respectively, and thereafter among REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT-A1, REMIC I Regular Interest LT-M1, REMIC I Regular Interest
LT- M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I
Regular Interest LT-M5, REMIC I Regular Interest LT-B and REMIC I Regular
Interest LT-ZZ, pro rata based on, and to the extent of, one month's interest at
the then applicable respective REMIC I Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC I Regular Interest.

         UNCERTIFICATED PASS-THROUGH RATE: The Uncertificated REMIC I
Pass-Through Rate.

         UNCERTIFICATED PRINCIPAL BALANCE: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of determination. The
Uncertificated Principal Balance of each Uncertificated Regular Interest shall
be reduced by all distributions of principal made on such Uncertificated Regular
Interest, as applicable, on such Distribution Date and, if and to the extent
necessary and appropriate, shall be further reduced in such Distribution Date by
Realized Losses. The Uncertificated Principal Balance of each Uncertificated
Regular Interest shall never be less than zero.

         UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC I
Regular Interest LT- AA, REMIC I Regular Interest LT-A1, REMIC I Regular
Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I Regular Interest LT-M3,
REMIC I Regular Interest LT-M4, REMIC I Regular Interest LT-M5, REMIC I Regular
Interest LT-B, REMIC I Regular Interest LT-ZZ, REMIC I Regular Interest LT-P and
REMIC I Regular Interest LT-AR, the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans.



                                       43

<PAGE>



         UNCERTIFICATED REGULAR INTERESTS: The REMIC I Regular Interests.

         UNDERWRITER'S EXEMPTION: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.

         UNPAID REALIZED LOSS AMOUNT: For any Class of Subordinate Certificates,
the portion of the aggregate Applied Realized Loss Amount previously allocated
to that Class remaining unpaid from prior Distribution Dates.

         VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificates for purposes of the voting provisions
hereunder. Voting Rights allocated to each Class of Certificates shall be
allocated 97% to the Certificates other than the Class A-R, Class C and Class P
Certificates (with the allocation among the Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes), and 1% to each of the Class A-R,
Class C and Class P Certificates. Voting Rights will be allocated among the
Certificates of each such Class in accordance with their respective Percentage
Interests.



                                       44

<PAGE>




                                   ARTICLE II.

                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

         Section 2.01 CONVEYANCE OF MORTGAGE LOANS.

                  (a) 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 Mortgage Loans, including all interest and
principal received and receivable by the Seller on or with respect to the
Mortgage Loans after the Cut-off Date (to the extent not applied in computing
the Cut-off Date Principal Balance thereof) or deposited into the Certificate
Account by the Seller as a Certificate Account Deposit as provided in this
Agreement, other than principal due on the Mortgage Loans on or prior to the
Cut-off Date and interest accruing prior to the Cut-off Date. The Seller
confirms that, concurrently with the transfer and assignment, it has deposited
into the Certificate Account the Certificate Account Deposit.

         Immediately upon the conveyance of the Mortgage Loans referred to in
the preceding paragraph, the Depositor sells, transfers, assigns, sets over and
otherwise conveys to the Trustee for benefit of the Certificateholders, without
recourse, all right title and interest in the Mortgage Loans.

                  The Seller further agrees to assign all of its right, title
and interest in and to the interest rate cap transaction evidenced by the
Confirmation And Agreement , and to cause all of its obligations in respect of
such transaction to be assumed by, the Trustee on behalf of the Trust Fund, on
the terms and conditions set forth in the Corridor Contract Assignment
Agreement.

                  (b) [reserved]

                  (c) [reserved]

                  (d) [reserved]

                  (e) [reserved]

                  (f) [reserved]

                  (g) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered to, and deposited with, the Trustee
(or, in the case of the Delay Delivery Mortgage Loans, will deliver to, and
deposit with, the Trustee within the time periods specified in the definition of
Delay Delivery Mortgage Loans) (except as provided in clause (vi) below) for the
benefit of the Certificateholders, the following documents or instruments with
respect to each such Mortgage Loan so assigned (with respect to each Mortgage
Loan, clause (i) through (vi) below,


                                       45

<PAGE>



together, the "Mortgage File" for each such Mortgage Loan):

                  (i) the original Mortgage Note, endorsed by the Seller or the
         originator of such Mortgage Loan, without recourse, in the following
         form: "Pay to the order of ________________ without recourse", with all
         intervening endorsements that show a complete chain of endorsement from
         the originator to the Seller, or, if the original Mortgage Note has
         been lost or destroyed and not replaced, an original lost note
         affidavit from the Seller, stating that the original Mortgage Note was
         lost or destroyed, together with a copy of the related Mortgage Note;

                  (ii) in the case of each Mortgage Loan that is not a MERS
         Mortgage Loan, the original recorded Mortgage, and in the case of each
         MERS Mortgage Loan, the original Mortgage, noting the presence of the
         MIN of the Mortgage Loan and language indicating that the Mortgage Loan
         is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
         recording indicated thereon, or a copy of the Mortgage certified by the
         public recording office in which such Mortgage has been recorded;

                  (iii) in the case of each Mortgage Loan that is not a MERS
         Mortgage Loan, a duly executed assignment of the Mortgage to
         "Asset-Backed Certificates, Series 2004-BC1, CWABS, Inc., by The Bank
         of New York, a New York banking corporation, as trustee under the
         Pooling and Servicing Agreement dated as of March 1, 2004, without
         recourse" (each such assignment, when duly and validly completed, to be
         in recordable form and sufficient to effect the assignment of and
         transfer to the assignee thereof, under the Mortgage to which such
         assignment relates);

                  (iv) the original recorded assignment or assignments of the
         Mortgage together with all interim recorded assignments of such
         Mortgage (noting the presence of a MIN in the case of each MERS
         Mortgage Loan);

                  (v) the original or copies of each assumption, modification,
         written assurance or substitution agreement, if any; and

                  (vi) the original or duplicate original lender's title policy
         or a printout of the electronic equivalent and all riders thereto or,
         in the event such original title policy has not been received from the
         insurer, such original or duplicate original lender's title policy and
         all riders thereto shall be delivered within one year of the Closing
         Date.

                  In addition, in connection with the assignment of any MERS
Mortgage Loan, the Seller agrees that it will cause, at the Seller's own
expense, the MERS(R) System to indicate (and provide evidence to the Trustee
that it has done so) that such Mortgage Loans have been assigned by the Seller
to the Trustee in accordance with this Agreement for the benefit of the
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 "[IDENTIFY TRUSTEE


                                       46

<PAGE>



SPECIFIC CODE]" in the field "[IDENTIFY THE FIELD NAME FOR TRUSTEE]" which
identifies the Trustee and (b) the code "[IDENTIFY SERIES SPECIFIC CODE NUMBER]"
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 the Master Servicer to, and the Master Servicer agrees
that it will not, 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.

                  In the event that in connection with any Mortgage Loan that is
not a MERS Mortgage Loan the Seller cannot deliver the original recorded
Mortgage or all interim recorded assignments of the Mortgage satisfying the
requirements of clause (ii), (iii) or (iv) concurrently with the execution and
delivery hereof, the Seller shall deliver or cause to be delivered to the
Trustee a true copy of such Mortgage and of each such undelivered interim
assignment of the Mortgage each certified by the Seller, the applicable title
company, escrow agent or attorney, or the originator of such Mortgage, as the
case may be, to be a true and complete copy of the original Mortgage or
assignment of Mortgage submitted for recording. For any such Mortgage Loan that
is not a MERS Mortgage Loan the Seller shall promptly deliver or cause to be
delivered to the Trustee such original Mortgage and such assignment or
assignments with evidence of recording indicated thereon upon receipt thereof
from the public recording official, or a copy thereof, certified, if
appropriate, by the relevant recording office, but in no event shall any such
delivery be made later than 270 days following the Closing Date; provided that
in the event that by such date the Seller is unable to deliver or cause to be
delivered each such Mortgage and each interim assignment by reason of the fact
that any such documents have not been returned by the appropriate recording
office, or, in the case of each interim assignment, because the related Mortgage
has not been returned by the appropriate recording office, the Seller shall
deliver or cause to be delivered such documents to the Trustee as promptly as
possible upon receipt thereof. If the public recording office in which a
Mortgage or interim assignment thereof is recorded retains the original of such
Mortgage or assignment, a copy of the original Mortgage or assignment so
retained, with evidence of recording thereon, certified to be true and complete
by such recording office, shall satisfy the Seller's obligations in Section
2.01. If any document submitted for recording pursuant to this Agreement is (x)
lost prior to recording or rejected by the applicable recording office, the
Seller shall immediately prepare or cause to be prepared a substitute and submit
it for recording, and shall deliver copies and originals thereof in accordance
with the foregoing or (y) lost after recording, the Seller shall deliver to the
Trustee a copy of such document certified by the applicable public recording
office to be a true and complete copy of the original recorded document. The
Seller shall promptly forward or cause to be forwarded to the Trustee (x) from
time to time additional original documents evidencing an assumption or
modification of a Mortgage Loan and (y) any other documents required to be
delivered by the Depositor or the Master Servicer to the Trustee within the time
periods specified in this Section 2.01.

                  With respect to each Mortgage Loan other than a MERS Mortgage
Loan as to which the related Mortgaged Property and Mortgage File are located in
(a) the State of California or (b) any other jurisdiction under the laws of
which the recordation of the assignment specified in clause (iii) above is not
necessary to protect the Trustee's and the Certificateholders, interest in the
related


                                       47

<PAGE>



Mortgage Loan, as evidenced by an Opinion of Counsel, delivered by the Seller to
the Trustee and a copy to the Rating Agencies, in lieu of recording the
assignment specified in clause (iii) above, the Seller may deliver an unrecorded
assignment in blank, in form otherwise suitable for recording to the Trustee;
provided that if the related Mortgage has not been returned from the applicable
public recording office, such assignment, or any copy thereof, of the Mortgage
may exclude the information to be provided by the recording office. As to any
Mortgage Loan other than a MERS Mortgage Loan, the procedures of the preceding
sentence shall be applicable only so long as the related Mortgage File is
maintained in the possession of the Trustee in the State or jurisdiction
described in such sentence. In the event that with respect to Mortgage Loans
other than MERS Mortgage Loans (i) the Seller, the Depositor or the Master
Servicer gives written notice to the Trustee that recording is required to
protect the right, title and interest of the Trustee on behalf of the
Certificateholders in and to any Mortgage Loan, (ii) a court recharacterizes the
sale of the Mortgage Loans as a financing, or (iii) as a result of any change in
or amendment to the laws of the State or jurisdiction described in the first
sentence of this paragraph or any applicable political subdivision thereof, or
any change in official position regarding application or interpretation of such
laws, including a holding by a court of competent jurisdiction, such recording
is so required, the Trustee shall complete the assignment in the manner
specified in clause (iii) of the second paragraph of this Section 2.01 and 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
the Master Servicer, at the Master Servicer's expense, to cause each such
previously unrecorded assignment to be submitted for recording as specified
above. In the event a Mortgage File is released to the Master Servicer as a
result of the Master Servicer's having completed a Request for Release in the
form of Exhibit M, the Trustee shall complete the assignment of the related
Mortgage in the manner specified in clause (iii) of the second paragraph of this
Section 2.01.

                  So long as the Trustee maintains an office in the State of
California, the Trustee shall maintain possession of and not remove or attempt
to remove from the State of California any of the Mortgage Files as to which the
related Mortgaged Property is located in such State. In the event that the
Seller fails to record an assignment of a Mortgage Loan as herein provided
within 90 days of notice of an event set forth in clause (i), (ii) or (iii) of
the above paragraph, the Master Servicer shall prepare and, if required
hereunder, file such assignments for recordation in the appropriate real
property or other records office. The Seller hereby appoints the Master Servicer
(and any successor servicer hereunder) as its attorney-in-fact with full power
and authority acting in its stead for the purpose of such preparation, execution
and filing.

                  In the case of Mortgage Loans that become the subject of a
Principal Prepayment between the Closing Date and the Cut-off Date, the Seller
shall deposit or cause to be deposited in the Certificate Account the amount
required to be deposited therein with respect to such payment pursuant to
Section 3.05 hereof.

                  Notwithstanding anything to the contrary in this Agreement,
within thirty days after the Closing Date, the Seller shall either (i) deliver
to the Trustee the Mortgage File as required pursuant to this Section 2.01 for
each Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay


                                       48

<PAGE>



Delivery Mortgage Loan or (B) substitute the Delay Delivery Mortgage Loan for a
Replacement Mortgage Loan, which repurchase or substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, provided that if the Seller fails to deliver a Mortgage File for any Delay
Delivery Mortgage Loan within the period provided in the prior sentence, the
cure period provided for in Section 2.02 or in Section 2.03 shall not apply to
the initial delivery of the Mortgage File for such Delay Delivery Mortgage Loan,
but rather the Seller shall have five (5) Business Days to cure such failure to
deliver; and provided further, that the Seller shall use its best efforts to
substitute rather than repurchase. The Seller shall promptly provide each Rating
Agency with written notice of any cure, repurchase or substitution made pursuant
to the proviso of the preceding sentence. On or before the thirtieth (30th) day
(or if such thirtieth day is not a Business Day, the succeeding Business Day)
after the Closing Date (in the case of the Mortgage Loans), the Trustee shall,
in accordance with the provisions of Section 2.02, send a Delay Delivery
Certification substantially in the form annexed hereto as Exhibit G-3 (with any
applicable exceptions noted thereon) for all Delay Delivery Mortgage Loan
delivered within thirty (30) days after such date. The Trustee will promptly
send a copy of such Delay Delivery Certification to each Rating Agency.

         Section 2.02      ACCEPTANCE OF THE MORTGAGE LOANS.

                  (a) The Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions noted in the Initial Certification
in the form annexed hereto as Exhibit G-1 and in the list of exceptions attached
thereto, of the documents referred to in clauses (i) and (iii) of Section
2.01(g) above with respect to the Mortgage Loans and all other assets included
in the Trust Fund and declares that it holds and will hold such documents and
the other documents delivered to it constituting the Mortgage Files, and that it
holds or will hold such other assets included in the Trust Fund, in trust for
the exclusive use and benefit of all present and future Certificateholders.

                  The Trustee agrees to execute and deliver on the Closing Date
to the Depositor, the Master Servicer and the Seller an Initial Certification
substantially in the form annexed hereto as Exhibit G-1 to the effect that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), the documents described in
Section 2.01(g)(i) and, in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the documents described in Section 2.01(g)(iii), with respect to
such Mortgage Loan are in the Trustee's possession, and based on its review and
examination and only as to the foregoing documents, such documents appear
regular on their face and relate to such Mortgage Loan. The Trustee agrees to
execute and deliver within 30 days after the Closing Date to the Depositor, the
Master Servicer and the Seller an Interim Certification substantially in the
form annexed hereto as Exhibit G-2 to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as not
covered by such certification), all documents required to be delivered to the
Trustee pursuant to this Agreement with respect to such Mortgage Loan are in its
possession (except those described in Section 2.01(g)(vi)) and based on its
review and examination and only as to the foregoing documents, (i) such
documents appear regular on their face and relate to such Mortgage Loan, and
(ii) the information set forth in items (i), (iv),


                                       49

<PAGE>



(v), (vi), (viii), (xi) and (xiv) of the definition of the "Mortgage Loan
Schedule" accurately reflects information set forth in the Mortgage File. On or
before the thirtieth (30th) day after the Closing Date (or if such thirtieth day
is not a Business Day, the succeeding Business Day), the Trustee shall deliver
to the Depositor, the Master Servicer and the Seller a Delay Delivery
Certification with respect to the Mortgage Loans substantially in the form
annexed hereto as Exhibit G-3, with any applicable exceptions noted thereon. The
Trustee shall be under no duty or obligation to inspect, review or examine such
documents, instruments, certificates or other papers to determine that the same
are genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.

                  Not later than 180 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Master Servicer and the Seller (and to any
Certificateholder that so requests) a Final Certification with respect to the
Mortgage Loans substantially in the form annexed hereto as Exhibit H, with any
applicable exceptions noted thereon.

                  In connection with the Trustee's completion and delivery of
such Final Certification, the Trustee shall review each Mortgage File with
respect to the Mortgage Loans to determine that such Mortgage File contains the
documents listed in Section 2.01(g). If, in the course of such review, the
Trustee finds any document or documents constituting a part of such Mortgage
File that do not meet the requirements of clauses (i)-(iv) and (vi) of Section
2.01(g), the Trustee shall include such exceptions in such Final Certification
(and the Trustee shall state in such Final Certification whether any Mortgage
File does not then include the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all riders thereto). If
the public recording office in which a Mortgage or assignment thereof is
recorded retains the original of such Mortgage or assignment, a copy of the
original Mortgage or assignment so retained, with evidence of recording thereon,
certified to be true and complete by such recording office, shall be deemed to
satisfy the requirements of clause (ii), (iii) or (iv) of Section 2.01(g), as
applicable. The Seller shall promptly correct or cure such defect referred to
above within 90 days from the date it was so notified of such defect and, if the
Seller does not correct or cure such defect within such period, the Seller shall
either (A) if the time to cure such defect expires prior to the end of the
second anniversary of the Closing Date, 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 (B) purchase
such Mortgage Loan from the Trust Fund within 90 days from the date the Seller
was notified of such defect in writing at the Purchase Price of such Mortgage
Loan; provided that any such substitution pursuant to (A) above or repurchase
pursuant to (B) above shall not be effected prior to the delivery to the Trustee
of the Opinion of Counsel required by Section 2.05 hereof and any substitution
pursuant to (A) above shall not be effected prior to the additional delivery to
the Trustee of a Request for Release substantially in the form of Exhibit N. No
substitution will be made in any calendar month after the Determination Date for
such month. The Purchase Price for any such Mortgage Loan shall be deposited by
the Seller in the Certificate Account and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit N hereto, the Trustee
shall release the related Mortgage File to the Seller and shall execute and
deliver at the Seller's request such instruments of transfer or assignment as
the Seller has prepared, in each case without


                                       50

<PAGE>



recourse, as shall be necessary to vest in the Seller, or a designee, the Trust
Fund's interest in any Mortgage Loan released pursuant hereto. If pursuant to
the foregoing provisions the Seller repurchases an Mortgage Loan that is a MERS
Mortgage Loan, the Master Servicer shall cause MERS to execute and deliver an
assignment of the Mortgage in recordable form to transfer the Mortgage from MERS
to the Seller and shall cause such Mortgage to be removed from registration on
the MERS(R) System in accordance with MERS' rules and regulations.

                  The Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. The Seller shall promptly deliver to the Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File that come into the possession of the
Seller from time to time.

                  It is understood and agreed that the obligation of the Seller
to substitute for or to purchase any Mortgage Loan that does not meet the
requirements of Section 2.02(a)(A) or (B) above shall constitute the sole remedy
respecting such defect available to the Trustee, the Depositor and any
Certificateholder against the Seller.

                  (b) [reserved]

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

                  (a) The Master Servicer hereby represents and warrants to the
Depositor, the Seller and the Trustee as follows, as of the date hereof with
respect to the Mortgage Loans:

                  (i) The Master Servicer is duly organized as a Texas limited
         partnership and is validly existing and in good standing under the laws
         of the State of Texas and is duly authorized and qualified to transact
         any and all business contemplated by this Agreement to be conducted by
         the Master Servicer 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 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) The Master Servicer has the full partnership power and
         authority to sell and 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 the part of the Master Servicer 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 Master Servicer, enforceable against the Master Servicer in


                                       51

<PAGE>



         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.

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer, the servicing of the Mortgage Loans by the Master
         Servicer 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 Master Servicer and will not (A) result in a material breach of
         any term or provision of the certificate of limited partnership,
         partnership agreement or other organizational document of the Master
         Servicer 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
         Master Servicer 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 Master Servicer of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over the
         Master Servicer; and the Master Servicer 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 Master Servicer's ability to perform or meet any of its obligations
         under this Agreement.

                  (iv) The Master Servicer 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.

                  (v) No litigation is pending or, to the best of the Master
         Servicer's knowledge, threatened, against the Master Servicer that
         would materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of the Master Servicer
         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 the execution, delivery
         and performance by the Master Servicer of, or compliance by the Master
         Servicer with, this Agreement or the consummation of the transactions
         contemplated hereby, or if any such consent, approval, authorization or
         order is required, the Master Servicer has obtained the same.

                  (vii) The Master 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 for as long as such Mortgage Loans are registered with


                                       52

<PAGE>



         MERS.

                  (b) The Seller hereby represents and warrants to the
Depositor, the Master Servicer and the Trustee as follows, as of the Cut-off
Date (unless otherwise indicated or the context otherwise requires, percentages
with respect to the Mortgage Loans are measured by the Cut-off Date Principal
Balance of the Mortgage Loans):

                  (i) The Seller is duly organized as a New York corporation and
         is validly existing and in good standing under the laws of the State of
         New York 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.

                  (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.

                  (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 and thereof 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


                                       53

<PAGE>



         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.

                  (vii) The information set forth on Exhibit F-1 hereto with
         respect to each Mortgage Loan is true and correct in all material
         respects as of the Closing Date.

                  (viii) The Seller will treat the transfer of the Mortgage
         Loans to the Depositor as a sale of the Mortgage Loans for all tax,
         accounting and regulatory purposes.

                  (ix) None of the Mortgage Loans are more than 60 days
         delinquent in payment of principal and interest.

                  (x) No Mortgage Loan secured by a first lien on the related
         Mortgaged Property had a Loan-to-Value Ratio at origination in excess
         of 100%.

                  (xi) Each Mortgage Loan is secured by a valid and enforceable
         first lien on the related Mortgaged Property, subject only to (1) the
         lien of non-delinquent current real property taxes and assessments, (2)
         covenants, conditions and restrictions, rights of way, easements and
         other matters of public record as of the date of recording of such
         Mortgage, such exceptions appearing of record being acceptable to
         mortgage lending institutions generally or specifically reflected in
         the appraisal made in connection with the origination of the related
         Mortgage Loan, and (3) other matters to which like properties are
         commonly subject that do not materially interfere with the benefits of
         the security intended to be provided by such Mortgage.

                  (xii) Immediately prior to the assignment of each Mortgage
         Loan to the Depositor, the Seller had good title to, and was the sole
         owner of, such Mortgage Loan free and clear of any pledge, lien,
         encumbrance or security interest and had full right and authority,
         subject


                                       54

<PAGE>



         to no interest or participation of, or agreement with, any other party,
         to sell and assign the same pursuant to this Agreement.

                  (xiii) There is no delinquent tax or assessment lien against
         any Mortgaged Property.

                  (xiv) There is no valid offset, claim, defense or counterclaim
         to any Mortgage Note or Mortgage, including the obligation of the
         Mortgagor to pay the unpaid principal of or interest on such Mortgage
         Note.

                  (xv) There are no mechanics' liens or claims for work, labor
         or material affecting any Mortgaged Property that are or may be a lien
         prior to, or equal with, the lien of such Mortgage, except those that
         are insured against by the title insurance policy referred to in item
         (xviii) below.

                  (xvi) As of the Closing Date, to the best of Seller's
         knowledge, each Mortgaged Property is free of material damage and is in
         good repair.

                  (xvii) As of the Closing Date neither the Seller nor any prior
         holder of any Mortgage has modified the Mortgage in any material
         respect (except that a Mortgage Loan may have been modified by a
         written instrument that has been recorded or submitted for recordation,
         if necessary, to protect the interests of the Certificateholders and
         the original or a copy of which has been delivered to the Trustee);
         satisfied, cancelled or subordinated such Mortgage in whole or in part;
         released the related Mortgaged Property in whole or in part from the
         lien of such Mortgage; or executed any instrument of release,
         cancellation, modification (except as expressly permitted above) or
         satisfaction with respect thereto.

                  (xviii) A lender's policy of title insurance together with a
         condominium endorsement and extended coverage endorsement, if
         applicable, in an amount at least equal to the Cut-off Date Stated
         Principal Balance of each such Mortgage Loan or a commitment (binder)
         to issue the same was effective on the date of the origination of each
         Mortgage Loan, each such policy is valid and remains in full force and
         effect, and each such policy was issued by a title insurer qualified to
         do business in the jurisdiction where the Mortgaged Property is located
         and acceptable to Fannie Mae or Freddie Mac and is in a form acceptable
         to Fannie Mae or Freddie Mac, which policy insures the Seller and
         successor owners of indebtedness secured by the insured Mortgage, as to
         the first priority lien, of the Mortgage subject to the exceptions set
         forth in paragraph (iv) above; to the best of the Seller's knowledge,
         no claims have been made under such mortgage title insurance policy and
         no prior holder of the related Mortgage, including the Seller, has
         done, by act or omission, anything that would impair the coverage of
         such mortgage title insurance policy.

                  (xix) No Mortgage Loan was the subject of a Principal
         Prepayment in full between the Closing Date and the Cut-off Date.



                                       55

<PAGE>



                  (xx) To the best of the Seller's knowledge, all of the
         improvements that were included for the purpose of determining the
         Appraised Value of the Mortgaged Property lie wholly within the
         boundaries and building restriction lines of such property, and no
         improvements on adjoining properties encroach upon the Mortgaged
         Property.

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

                  (xxii) The Mortgage Note and the related Mortgage are genuine,
         and each is the legal, valid and binding obligation of the maker
         thereof, enforceable in accordance with its terms and under applicable
         law, except that (a) the enforceability thereof 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. To the best of the
         Seller's knowledge, all parties to the Mortgage Note and the Mortgage
         had legal capacity to execute the Mortgage Note and the Mortgage and
         each Mortgage Note and Mortgage have been duly and properly executed by
         such parties.

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

                  (xxiv) The related Mortgage contains customary and enforceable
         provisions that render the rights and remedies of the holder thereof
         adequate for the realization against the Mortgaged Property of the
         benefits of the security, including, (i) in the case of a Mortgage
         designated as a deed of trust, by trustee's sale, and (ii) otherwise by
         judicial foreclosure.

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



                                       56

<PAGE>



                  (xxvi) Each Mortgage Note and each Mortgage is in
         substantially one of the forms attached hereto as Exhibit P acceptable
         in form to Fannie Mae or Freddie Mac.

                  (xxvii) There exist no deficiencies with respect to escrow
         deposits and payments, if such are required, for which customary
         arrangements for repayment thereof have not been made, and no escrow
         deposits or payments of other charges or payments due the Seller have
         been capitalized under the Mortgage or the related Mortgage Note.

                  (xxviii) The origination, underwriting, servicing and
         collection practices used by the Seller with respect to each Mortgage
         Loan have been in all respects legal, proper, prudent and customary in
         the mortgage lending and servicing business.

                  (xxix) There is no pledged account or other security other
         than real estate securing the Mortgagor's obligations.

                  (xxx) No Mortgage Loan has a shared appreciation feature, or
         other contingent interest feature.

                  (xxxi) Each Mortgage Loan contains a customary "due on sale"
         clause.

                  (xxxii) No more than approximately 6.13% of the Mortgage Loans
         are secured by two- to four-family dwellings. No more than
         approximately 5.23% of the Mortgage Loans are secured by condominium
         units. No more than approximately 0.16% of the Mortgage Loans are
         secured by high rise condominium units. No less than approximately
         78.41% of the Mortgage Loans are secured by single family detached
         dwellings. No more than approximately 0.11% of the Mortgage Loans are
         secured by manufactured housing. No more than approximately 9.56% of
         the Mortgage Loans are secured by PUDs.

                  (xxxiii) No Mortgage Loan had a principal balance in excess of
         $740,000 at origination.

                  (xxxiv) To the extent required under applicable law, each
         originator and subsequent mortgagee or servicer of the Mortgage Loan
         complied with all licensing requirements and was authorized to transact
         and do business in the jurisdiction in which the related Mortgaged
         Property is located at all times when it held or serviced the Mortgage
         Loan. Any and all requirements of any federal, state or local laws or
         regulations, including, without limitation, usury, truth-in-lending,
         real estate settlement procedures, consumer credit protection,
         anti-predatory lending, fair credit reporting, unfair collection
         practice, equal credit opportunity, fair housing and disclosure laws
         and regulations, applicable to the solicitation, origination,
         collection and servicing of such Mortgage Loan have been complied with
         in all material respects; and any obligations of the holder of the
         Mortgage Note, Mortgage and other loan documents have been complied
         with in all material respects; servicing of each Mortgage Loan has been
         in accordance with prudent mortgage servicing standards, any


                                       57

<PAGE>



         applicable laws, rules and regulations and in accordance with the terms
         of the Mortgage Notes, Mortgage and other loan documents, whether such
         origination and servicing was done by Seller, its affiliates, or any
         third party which originated the Mortgage Loan on behalf of, or sold
         the Mortgage Loan to, any of them, or any servicing agent of any of the
         foregoing;

                  (xxxv) Each Mortgage Loan was originated on or after April 4,
         2002;

                  (xxxvi) Each Two-Year Hybrid Mortgage Loan had an initial
         Adjustment Date no later than October 1, 2006; each Three-Year Hybrid
         Mortgage Loan had an initial Adjustment Date no later than December 12,
         2006; each Five-Year Hybrid Mortgage Loan had an initial Adjustment
         Date no later than December 1, 2008.

                  (xxxvii) Approximately 91.94% of the Mortgage Loans provide
         for a prepayment penalty.

                  (xxxviii) On the basis of representations made by the
         Mortgagors in their loan applications, no less than approximately
         99.66% of the owner-occupied Mortgage Loans are secured by
         owner-occupied Mortgaged Properties that are primary residences and no
         more than approximately 0.34% of the owner-occupied Mortgage Loans are
         secured by owner- occupied Mortgaged Properties that are secondary
         residences.

                  (xxxix) At the Cut-off Date, the improvements upon each
         Mortgaged Property are covered by a valid and existing hazard insurance
         policy with a generally acceptable carrier that provides for fire and
         extended coverage and coverage for such other hazards as are customary
         in the area where the Mortgaged Property is located in an amount that
         is at least equal to the lesser of (i) the maximum insurable value of
         the improvements securing such Mortgage Loan or (ii) the greater of (a)
         the outstanding principal balance of the Mortgage Loan and (b) an
         amount such that the proceeds of such policy shall be sufficient to
         prevent the Mortgagor and/or the mortgagee from becoming a co-insurer.
         If the Mortgaged Property is a condominium unit, it is included under
         the coverage afforded by a blanket policy for the condominium unit. All
         such individual insurance policies and all flood policies referred to
         in item (xl) below contain a standard mortgagee clause naming the
         Seller or the original mortgagee, and its successors in interest, as
         mortgagee, and the Seller has received no notice that any premiums due
         and payable thereon have not been paid; the Mortgage obligates the
         Mortgagor thereunder to maintain all such insurance, including flood
         insurance, at the Mortgagor's cost and expense, and upon the
         Mortgagor's failure to do so, authorizes the holder of the Mortgage to
         obtain and maintain such insurance at the Mortgagor's cost and expense
         and to seek reimbursement therefor from the Mortgagor.

                  (xl) If the Mortgaged Property is in an area identified in the
         Federal Register by the Federal Emergency Management Agency as having
         special flood hazards, a flood insurance policy in a form meeting the
         requirements of the current guidelines of the Flood Insurance
         Administration is in effect with respect to such Mortgaged Property
         with a


                                       58

<PAGE>



         generally acceptable carrier in an amount representing coverage not
         less than the least of (A) the original outstanding principal balance
         of the Mortgage Loan, (B) the minimum amount required to compensate for
         damage or loss on a replacement cost basis, or (C) the maximum amount
         of insurance that is available under the Flood Disaster Protection Act
         of 1973, as amended.

                  (xli) To the best of the Seller's knowledge, there is no
         proceeding occurring, pending or threatened for the total or partial
         condemnation of the Mortgaged Property.

                  (xlii) There is no material monetary default existing under
         any Mortgage or the related Mortgage Note and, to the best of the
         Seller's knowledge, there is no material event that, with the passage
         of time or with notice and the expiration of any grace or cure period,
         would constitute a default, breach, violation or event of acceleration
         under the Mortgage or the related Mortgage Note; and the Seller has not
         waived any default, breach, violation or event of acceleration.

                  (xliii) Each Mortgaged Property is improved by a one- to
         four-family residential dwelling, including condominium units and
         dwelling units in PUDs. To the best of the Seller's knowledge, no
         Mortgaged Property includes a cooperative or a mobile home or
         constitutes other than real property under state law.

                  (xliv) Each Mortgage Loan is being serviced by the Master
         Servicer.

                  (xlv) Any future advances made prior to the Cut-off Date have
         been consolidated with the outstanding principal amount secured by the
         Mortgage, and the secured principal amount, as consolidated, bears a
         single interest rate and single repayment term reflected on the
         Mortgage Loan Schedule. The consolidated principal amount does not
         exceed the original principal amount of the Mortgage Loan. The Mortgage
         Note does not permit or obligate the Master Servicer to make future
         advances to the Mortgagor at the option of the Mortgagor.

                  (xlvi) All taxes, governmental assessments, insurance
         premiums, water, sewer and municipal charges, leasehold payments or
         ground rents that previously became due and owing have been paid, or an
         escrow of funds has been established in an amount sufficient to pay for
         every such item that remains unpaid and that has been assessed, but is
         not yet due and payable. Except for (A) payments in the nature of
         escrow payments, and (B) interest accruing from the date of the
         Mortgage Note or date of disbursement of the Mortgage proceeds,
         whichever is later, to the day that precedes by one month the Due Date
         of the first installment of principal and interest, including without
         limitation, taxes and insurance payments, the Master Servicer has not
         advanced funds, or induced, solicited or knowingly received any advance
         of funds by a party other than the Mortgagor, directly or indirectly,
         for the payment of any amount required by the Mortgage.



                                       59

<PAGE>



                  (xlvii) The Mortgage Loans were underwritten in all material
         respects in accordance with customary and prudent underwriting
         guidelines generally used by originators of credit blemished quality
         mortgage loans.

                  (xlviii) Prior to the approval of the Mortgage Loan
         application, an appraisal of the related Mortgaged Property was
         obtained from a qualified appraiser, duly appointed by the originator,
         who had no interest, direct or indirect, in the Mortgaged Property or
         in any loan made on the security thereof, and whose compensation is not
         affected by the approval or disapproval of the Mortgage Loan; such
         appraisal is in a form acceptable to Fannie Mae and Freddie Mac.

                  (xlix) None of the Mortgage Loans is a graduated payment
         mortgage loan or a growing equity mortgage loan, and no Mortgage Loan
         is subject to a buydown or similar arrangement.

                  (l) The Mortgage Rates borne by the Mortgage Loans as of the
         Cut-off Date ranged from 4.360% per annum to 11.870% per annum and the
         weighted average Mortgage Rate as of the Cut-off Date was 7.124% per
         annum.

                  (li) The Mortgage Loans were selected from among the
         outstanding one- to four- family mortgage loans in the Seller's
         portfolio at the Closing Date, as to which the representations and
         warranties made as to the Mortgage Loans set forth in this Section
         2.03(b) can be made. No selection was made in a manner that would
         adversely affect the interests of Certificateholders.

                  (lii) The Gross Margins on the Adjustable Rate Mortgage Loans
         that are Mortgage Loans range from approximately 0.340% to 11.540% and
         the weighted average Gross Margin was approximately 6.334%.

                  (liii) Each Mortgage Loan has a payment date on or before the
         Due Date in the month of the first Distribution Date.

                  (liv) The Mortgage Loans, individually and in the aggregate,
         conform in all material respects to the descriptions thereof in the
         Prospectus Supplement.

                  (lv) There is no obligation on the part of the Seller under
         the terms of the Mortgage or related Mortgage Note to make payments in
         addition to those made by the Mortgagor.

                  (lvi) Any leasehold estate securing a Mortgage Loan has a term
         of not less than five years in excess of the term of the related
         Mortgage Loan.

                  (lvii) Each Mortgage Loan represents a "qualified mortgage"
         within the meaning


                                       60

<PAGE>



         of Section 860(a)(3) of the Code (but without regard to the rule in
         Treasury Regulation ss. 1.860G-2(f)(2) that treats a defective
         obligation as a qualified mortgage, or any substantially similar
         successor provision) and applicable Treasury regulations promulgated
         thereunder.

                  (lviii) No Mortgage Loan was either a "consumer credit
         contract" or a "purchase money loan" as such terms are defined in 16
         C.F.R. Section 433 nor is any Mortgage Loan a "mortgage" as defined in
         15 U.S.C. ss. 1602(aa).

                  (lix) The information set forth in the Prepayment Charge
         Schedule with respect to each Mortgage Loan is complete, true and
         correct in all material respects at the date or dates respecting which
         such information is furnished and each Prepayment Charge is permissible
         and enforceable in accordance with its terms under applicable law upon
         the Mortgagor's full and voluntary principal prepayment (except to the
         extent that: (1) the enforceability thereof may be limited by
         bankruptcy, insolvency, moratorium, receivership and other similar laws
         relating to creditors' rights generally; or (2) the collectibility
         thereof may be limited due to acceleration in connection with a
         foreclosure or other involuntary prepayment).

                  (lx) No Mortgage Loan is a "high cost home loan" as defined in
         the Georgia Fair Lending Act, as amended. No Mortgage Loan with a
         principal balance at origination (or modification) equal to or less
         than the mortgage loan balance limit of Fannie Mae in effect at the
         time of origination (or modification) and secured by owner-occupied
         real property located in the State of Georgia was originated (or
         modified) on or after October 1, 2002 through and including March 6,
         2003.

                  (lxi) No Mortgage Loan is a "high cost home loan" as defined
         in New York Banking Law 6-1.

                  (lxii) No Mortgage Loan is classified as (a) a high cost
         mortgage loan under the Home Ownership and Equity Protection Act of
         1994 or (b) a "high cost" loan under any other applicable state,
         federal or local law.

                  (c) Upon discovery by any of the parties hereto of a breach of
         a representation or warranty set forth in Section 2.03(a) or (b), that
         materially and adversely affects the interests of the
         Certificateholders in any Mortgage Loan, the party discovering such
         breach shall give prompt notice thereof to the other parties. Each of
         the Master Servicer and the Seller (each, a "Representing Party")
         hereby covenants with respect to a breach of the representations and
         warranties set forth in Sections 2.03(a) and (b), that within 90 days
         of the earlier of the discovery by such Representing Party or receipt
         of written notice by such Representing Party from any party of a breach
         of any representation or warranty set forth herein made 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, shall, (i) if such 90-day period
         expires prior to the second anniversary of the Closing Date, remove
         such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund


                                       61

<PAGE>



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 the Opinion of Counsel required by Section 2.05
hereof 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
substantially in the form of Exhibit M. Any Representing Party liable for a
breach under this Section 2.03 shall promptly reimburse the Master Servicer and
the Trustee for any expenses reasonably incurred by the Master Servicer or the
Trustee in respect of enforcing the remedies for such breach. To enable the
Master Servicer to amend the Mortgage Loan Schedule, any Representing Party
liable for a breach under this Section 2.03 shall, unless it cures such breach
in a timely fashion pursuant to this Section 2.03, promptly notify the Master
Servicer whether such Representing Party intends either to repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties described in this Section that are made to the
best of the Representing Party's knowledge, if it is discovered by any of the
Depositor, the Master Servicer, the Seller 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 Representing Party's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.

                  With respect to any Replacement Mortgage Loan or Loans, the
Seller delivering such Replacement Mortgage Loan shall deliver to the Trustee
for the benefit of the Certificateholders the related Mortgage Note, Mortgage
and assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as 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 delivering such Replacement
Loan on such Distribution Date. 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 Master 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 the Master
Servicer 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 delivering such
Replacement Mortgage Loan 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 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
to the Representing Party the Mortgage File relating to such Deleted Mortgage
Loan and held


                                       62

<PAGE>



for the benefit of the Certificateholders and shall execute and deliver at the
Master Servicer's direction such instruments of transfer or assignment as have
been prepared by the Master Servicer, 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.

                  For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such 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 case of Actuarial Mortgage Loans)
in the month of substitution) of all such Deleted Mortgage Loans. An amount
equal to the aggregate of the deficiencies described in the preceding sentence
(such amount, the "Substitution Adjustment Amount") shall be forwarded by the
Seller to the Master Servicer and deposited by the Master Servicer into the
Certificate Account not later than the Determination Date for the Distribution
Date relating to the Prepayment Period during which the related Mortgage Loan
became required to be purchased or replaced hereunder.

                  In the event that a Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.08 on the Determination Date for the Distribution Date in
the month following the month during which such Seller became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price, the delivery of the Opinion of Counsel required by Section 2.05, if any,
and the receipt of a Request for Release in the form of Exhibit N hereto, the
Trustee shall release the related Mortgage File held for the benefit of the
Certificateholders to such Seller, and the Trustee shall execute and deliver at
such Person's direction the related instruments of transfer or assignment
prepared by such 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 such 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 remedy 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 hereof shall survive delivery of the respective Mortgage Files to the
Trustee for the benefit of the Certificateholders.

         Section 2.04      REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

                  The Depositor hereby represents and warrants to the Seller,
the Master Servicer and the Trustee as follows, as of the date hereof:

                  (i) The Depositor is duly organized and is validly existing as
a corporation in


                                       63

<PAGE>



         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,
         reorganization, moratorium and other similar laws affecting creditors'
         rights generally and (ii) general principles of equity, regardless of
         whether enforcement is sought in a proceeding in equity or at 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 or compliance with the terms hereof
         and thereof 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 and thereof.

                  (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
with respect to each Mortgage Loan as of the Closing Date, that following the
transfer of the Mortgage Loans to it by the


                                       64

<PAGE>



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 the two immediately preceding paragraphs shall survive
delivery of the Mortgage Files to the Trustee. Upon discovery by the Depositor
or the Trustee of a breach of any of the foregoing representations and
warranties set forth in the immediately preceding paragraph (referred to herein
as a "breach"), which breach materially and adversely affects the interest of
the Certificateholders, the party discovering such breach shall give prompt
written notice to the others and to each Rating Agency. The Depositor hereby
covenants with respect to the representations and warranties made by it in this
Section 2.04 that within 90 days of the earlier of the discovery it or receipt
of written notice by it from any party of a breach of any representation or
warranty set forth herein made 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, shall
repurchase or replace the affected Mortgage Loan or Loans in accordance with the
procedure set forth in Section 2.03(c).

         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, 2.03
or 2.04 shall be made unless the Representing Party making such repurchase or
substitution 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 the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding. Any
Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such 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, the Seller, the Master
Servicer or the Trustee 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. In connection
therewith, the Trustee shall require the Seller, at the Seller's option, to
either (i) substitute, if the conditions in Section 2.03(b) 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


                                       65

<PAGE>



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 AUTHENTICATION AND DELIVERY OF CERTIFICATES.

                  The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has
executed, authenticated and delivered, to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.

         Section 2.07 COVENANTS OF THE MASTER SERVICER.

         The Master Servicer hereby covenants to the Depositor, the Seller and
the Trustee as follows:

                           (a) the Master Servicer shall comply in the
         performance of its obligations under this Agreement with all reasonable
         rules and requirements of the insurer under each Required Insurance
         Policy; and

                           (b) no written information, certificate of an
         officer, statement furnished in writing or written report delivered to
         the Depositor, any affiliate of the Depositor or the Trustee and
         prepared by the Master Servicer pursuant to this Agreement will contain
         any untrue statement of a material fact or omit to state a material
         fact necessary to make the information, certificate, statement or
         report not misleading.



                                       66

<PAGE>



                                  ARTICLE III.

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

         Section 3.01      MASTER SERVICER TO SERVICE MORTGAGE LOANS.

                  For and on behalf of the Certificateholders, the Master
Servicer shall service and administer the Mortgage Loans in accordance with
customary and usual standards of practice of prudent mortgage loan lenders in
the respective states in which the Mortgaged Properties are located. In
connection with such servicing and administration, the Master Servicer shall
have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, subject to the terms hereof (i) to execute and
deliver, on behalf of the Certificateholders and the Trustee, customary consents
or waivers and other instruments and documents, (ii) to consent to transfers of
any Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages (but only in the manner provided in this Agreement), (iii) to collect
any Insurance Proceeds and other Liquidation Proceeds, and (iv) subject to
Section 3.12(a), to effectuate foreclosure or other conversion of the ownership
of the Mortgaged Property securing any Mortgage Loan; provided that the Master
Servicer shall take no action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan or
the rights and interests of the Depositor and the Trustee under this Agreement.
The Master Servicer shall represent and protect the interest of the Trust Fund
in the same manner as it currently protects its own interest in mortgage loans
in its own portfolio in any claim, proceeding or litigation regarding a Mortgage
Loan and shall not make or permit any modification, waiver or amendment of any
term of any Mortgage Loan which would cause the Trust Fund to fail to qualify as
a REMIC or result in the imposition of any tax under Section 860(a) or 860(d) of
the Code, but in any case not in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, the Master Servicer, in its own name or in the name
of the Depositor and the Trustee, is hereby authorized and empowered by the
Depositor and the Trustee, when the Master 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 Mortgaged Properties held for the benefit of the
Certificateholders. The Master 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 Master 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 Master Servicer. The Master Servicer further is authorized and empowered
by the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it appropriate in its best judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of


                                       67

<PAGE>



assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns.

                  In accordance with the standards of the preceding paragraph,
the Master 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, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the 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.

                  The Master Servicer shall deliver a list of Servicing Officers
to the Trustee by the Closing Date.

         Section 3.02 SUBSERVICING; ENFORCEMENT OF THE OBLIGATIONS OF MASTER
                      SERVICER.

                  (a) The Master Servicer may arrange for the subservicing of
any Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that such
subservicing arrangement and the terms of the related subservicing agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Notwithstanding the
provisions of any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a subservicer or reference to actions taken through a Master Servicer or
otherwise, the Master Servicer shall remain obligated and liable to the
Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from the
subservicer and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
Every subservicing agreement entered into by the Master Servicer shall contain a
provision giving the successor Master Servicer the option to terminate such
agreement in the event a successor Master Servicer is appointed. All actions of
each subservicer performed pursuant to the related subservicing agreement shall
be performed as an agent of the Master Servicer with the same force and effect
as if performed directly by the Master Servicer.

                  (b) For purposes of this Agreement, the Master Servicer shall
be deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a subservicer regardless of whether
such payments are remitted by the subservicer to the Master Servicer.

         Section 3.03 RIGHTS OF THE DEPOSITOR, THE SELLER AND THE TRUSTEE IN
                      RESPECT OF THE MASTER SERVICER.


                                       68

<PAGE>




                  None of the Trustee, the Seller or the Depositor shall have
any responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise.

         Section 3.04 TRUSTEE TO ACT AS MASTER SERVICER.

                  In the event that the Master Servicer shall for any reason no
longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its designee shall thereupon assume all of the rights
and obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to Section 3.10 hereof or any acts or omissions of the predecessor Master
Servicer hereunder, (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02 or
2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant to
Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03 or the first paragraph of Section
6.02 hereof). If the Master Servicer shall for any reason no longer be the
Master Servicer (including by reason of any Event of Default), the Trustee (or
any other successor servicer) may, at its option, succeed to any rights and
obligations of the Master Servicer under any subservicing agreement in
accordance with the terms thereof; provided that the Trustee (or any other
successor servicer) shall not incur any liability or have any obligations in its
capacity as servicer under a subservicing agreement arising prior to the date of
such succession unless it expressly elects to succeed to the rights and
obligations of the Master Servicer thereunder; and the Master Servicer shall not
thereby be relieved of any liability or obligations under the subservicing
agreement arising prior to the date of such succession.

                  The Master Servicer shall, upon request of the Trustee, but at
the expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.

         Section 3.05 COLLECTION OF MORTGAGE LOAN PAYMENTS; CERTIFICATE ACCOUNT;
                      DISTRIBUTION ACCOUNT; SELLER SHORTFALL INTEREST
                      REQUIREMENT.

                  (a) The Master Servicer shall make reasonable efforts in
accordance with customary and usual standards of practice of prudent mortgage
lenders in the respective states in which the Mortgaged Properties are located
to collect all payments called for under the terms and provisions of the
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 Master Servicer may in its discretion (i)
waive any late payment charge or any Prepayment Charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due dates
for payments due on a Mortgage Note for a period not greater than 270 days.


                                       69

<PAGE>



In the event of any such arrangement, the Master 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. The Master 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.

                  (b) The Master Servicer shall establish and maintain a
         Certificate Account into which the Master Servicer shall deposit or
         cause to be deposited on a daily basis within two Business Days of
         receipt, except as otherwise specifically provided herein, the
         following payments and collections remitted by Subservicers or received
         by it in respect of Mortgage Loans subsequent to the Cut-off Date
         (other than in respect of principal and interest due on the Mortgage
         Loans before the Cut-off Date) and the following amounts required to be
         deposited hereunder:

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

                  (ii) all payments on account of interest on the Mortgage Loans
         net of the related Servicing Fee permitted under Section 3.15, other
         than interest accrued on the Mortgage Loans prior to the Cut-off Date,
         and the Certificate Account Deposit;

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

                  (iv) all Compensating Interest;

                  (v) any amount required to be deposited by the Master Servicer
         pursuant to Section 3.05(f) in connection with any losses on Permitted
         Investments;

                  (vi) any amounts required to be deposited by the Master
         Servicer pursuant to Section 3.10 hereof;

                  (vii) the Purchase Price and any Substitution Adjustment
         Amount;

                  (viii) all Advances made by the Master Servicer pursuant to
         Section 4.01;

                  (ix) the Seller Shortfall Interest Requirement;

                  (x) all Prepayment Charges collected; and



                                       70

<PAGE>



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

                  The foregoing requirements for remittance by the Master
Servicer into the Certificate Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of prepayment penalties, late payment charges or assumption fees, if
collected, need not be remitted by the Master Servicer. In the event that the
Master Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw or direct the institution maintaining the Certificate Account, to
withdraw such amount from the Certificate 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 Certificate
Account, that describes the amounts deposited in error in the Certificate
Account. The Master Servicer shall maintain adequate records with respect to all
withdrawals made pursuant to this Section. All funds deposited in the
Certificate Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.08.

                  (c) The Trustee shall establish and maintain, on behalf of the
         Certificateholders, the Distribution Account. The Trustee shall,
         promptly upon receipt, deposit in the Distribution Account and retain
         therein the following:

                  (i) the aggregate amount remitted by the Master Servicer
         pursuant to the second paragraph of Section 3.08(a); and

                  (ii) any amount required to be deposited by the Master
         Servicer pursuant to Section 3.05(f) in connection with any losses on
         Permitted Investments.

                  The foregoing requirements for remittance by the Master
Servicer and deposit by the Trustee into the Distribution Account shall be
exclusive. In the event that the Master Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time direct the Trustee to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering a written
notice to the Trustee that describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Master Servicer.

                  (d) No later than 1:00 p.m. Pacific time on the Business Day
prior to the Master Servicer Advance Date in April 2004, the Seller shall remit
to the Master Servicer, and the Master Servicer shall deposit in the Certificate
Account, the Seller Shortfall Interest Requirement (if any) for such Master
Servicer Advance Date.

                  (e) [reserved].


                                       71

<PAGE>




                  (f) Each institution that maintains the Certificate Account or
the Distribution Account shall invest the funds in each such account, as
directed by the Master Servicer, in Permitted Investments, which shall mature
not later than (x) in the case of the Certificate Account, the second Business
Day next preceding the related Distribution Account Deposit Date (except that if
such Permitted Investment is an obligation of the institution that maintains
such Certificate Account, then such Permitted Investment shall mature not later
than the Business Day next preceding such Distribution Account Deposit Date) and
(y) in the case of the Distribution Account, the Business Day immediately
preceding the first Distribution Date that follows the date of such investment
(except that if such Permitted Investment is an obligation of the institution
that maintains such Distribution Account, then such Permitted Investment shall
mature not later than such Distribution Date), in each case, 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. In
the case of the Certificate Account and the Distribution Account, all income and
gain net of any losses realized from any such investment shall be for the
benefit of the Master Servicer as servicing compensation and shall be remitted
to it monthly as provided herein, all income and gain net of any losses realized
from any such investment shall be for the benefit of the Seller and shall be
remitted to the Seller as provided herein. The amount of any losses incurred in
the Certificate Account or the Distribution Account in respect of any such
investments shall be deposited by the Master Servicer in the Certificate Account
or paid to the Trustee for deposit into the Distribution Account out of the
Master Servicer's own funds immediately as realized. Any losses incurred in the
Carryover Reserve Fund in respect of any such investments shall be charged
against amounts on deposit in the Carryover Reserve Fund (or such investments)
immediately as realized. The Trustee shall not be liable for the amount of any
loss incurred in respect of any investment or lack of investment of funds held
in the Certificate Account, the Distribution Account, the Carryover Reserve Fund
and made in accordance with this Section 3.05 (or in the case of the Carryover
Reserve Fund, Section 4.08).

                  (g) The Master Servicer shall give at least 30 days advance
notice to the Trustee, the Seller, each Rating Agency and the Depositor of any
proposed change of location of the Certificate Account prior to any change
thereof. The Trustee shall give at least 30 days advance notice to the Master
Servicer, the Seller, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account, the Carryover Reserve Fund
prior to any change thereof.

                  (h) The Trustee shall establish and maintain, on behalf of the
Class P Certificateholders, the Class P Distribution Account. Funds in the Class
P Distribution Account shall be held in trust for the Class P Certificateholders
for the uses and purposes set forth in this Agreement. Such funds may not be
invested.

         Section 3.06 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS; ESCROW
                      ACCOUNTS.

                  To the extent required by the related Mortgage Note, the
Master Servicer shall establish and maintain one or more accounts (each, an
"Escrow Account") and deposit and retain


                                       72

<PAGE>



therein all collections from the Mortgagors (or advances by the Master Servicer)
for the payment of taxes, assessments, hazard insurance premiums or comparable
items for the account of the Mortgagors. Nothing herein shall require the Master
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 Master Servicer out of related collections for any payments made
pursuant to Sections 3.01 hereof (with respect to taxes and assessments and
insurance premiums) and 3.10 hereof (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 Mortgagors on balances in the Escrow Account or to clear and terminate
the Escrow Account at the termination of this Agreement in accordance with
Section 9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.

         Section 3.07 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
                      THE MORTGAGE LOANS.

                  The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage Loans
and all accounts, insurance policies and other matters relating to this
Agreement, such access being afforded without charge, but only upon reasonable
request and during normal business hours at the offices of the Master Servicer
designated by it.

                  Upon reasonable advance notice in writing if required by
federal regulation, the Master Servicer will provide to each Certificateholder
or Certificate Owner that is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder or
Certificate Owner to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Master Servicer shall be entitled to be reimbursed by each such
Certificateholder or Certificate Owner for actual expenses incurred by the
Master Servicer in providing such reports and access.

         Section 3.08 PERMITTED WITHDRAWALS FROM THE CERTIFICATE ACCOUNT,
                      DISTRIBUTION ACCOUNT AND THE CARRYOVER RESERVE FUND.

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

                  (i) to pay to the Master Servicer (to the extent not
         previously paid to or withheld by the Master Servicer), as servicing
         compensation in accordance with Section 3.15, 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


                                       73

<PAGE>



         other amounts set forth in Section 3.15;

                  (ii) to reimburse each of the Master Servicer and the Trustee
         for Advances made by it with respect to the Mortgage Loans, such right
         of reimbursement pursuant to this subclause (ii) being limited to
         amounts received on particular Mortgage Loan(s) (including, for this
         purpose, Liquidation Proceeds) that represent late recoveries of
         payments of principal and/or interest on such particular Mortgage
         Loan(s) in respect of which any such Advance was made;

                  (iii) to reimburse each of the Master Servicer and the Trustee
         for any Nonrecoverable Advance previously made by it;

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

                  (v) to pay the Master Servicer any unpaid Servicing Fees and
         to reimburse it for any unreimbursed Servicing Advances, the Master
         Servicer's right to reimbursement of Servicing Advances pursuant to
         this subclause (v) with respect to any Mortgage Loan being limited to
         amounts received on particular Mortgage Loan(s) (including, for this
         purpose, Liquidation Proceeds and purchase and repurchase proceeds)
         that represent late recoveries of the payments for which such advances
         were made pursuant to Section 3.01 or Section 3.06;

                  (vi) to pay to the Seller, the Depositor or the Master
         Servicer, as applicable, with respect to each Mortgage Loan or property
         acquired in respect thereof that has been purchased pursuant to Section
         2.02, 2.03 or 3.12, all amounts received thereon and not taken into
         account in determining the related Stated Principal Balance of such
         repurchased Mortgage Loan;

                  (vii) to reimburse the Seller, the Master Servicer or the
         Depositor for expenses incurred by any of them in connection with the
         Mortgage Loans or Certificates and reimbursable pursuant to Section
         6.03 hereof provided that such amount shall only be withdrawn following
         the withdrawal from the Certificate Account for deposit into the
         Distribution Account pursuant to the following paragraph;

                  (viii) to withdraw pursuant to Section 3.05 any amount
         deposited in the Certificate Account and not required to be deposited
         therein; and

                  (ix) to clear and terminate the Certificate Account upon
         termination of this Agreement pursuant to Section 9.01 hereof.

                  In addition, no later than 1:00 p.m. Pacific time on the
Distribution Account Deposit Date, the Master Servicer shall withdraw from the
Certificate Account and remit to the Trustee the


                                       74

<PAGE>



Interest Remittance Amount and the Principal Remittance Amount for such
Distribution Date to the extent on deposit in the Certificate Account, and the
Trustee shall deposit such amount in the Distribution Account.

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

                  (b) The Trustee shall withdraw funds from the Distribution
         Account for distribution to the Certificateholders in the manner
         specified in this Agreement (and to withhold from the amounts so
         withdrawn, the amount of any taxes that it is authorized to retain
         pursuant to the last paragraph of Section 8.11). In addition, the
         Trustee may from time to time make withdrawals from the Distribution
         Account for the following purposes:

                  (i) to pay to the Master Servicer, as additional servicing
         compensation, earnings on or investment income with respect to funds in
         or credited to the Distribution Account;

                  (ii) to pay the Trustee the Trustee Fee on each Distribution
         Date;

                  (iii) to withdraw pursuant to Section 3.05 any amount
         deposited in the Distribution Account and not required to be deposited
         therein;

                  (iv) to reimburse the Trustee for any unreimbursed Advances
         made by it pursuant to Section 4.01(b) hereof, such right of
         reimbursement pursuant to this subclause (iv) being limited to (x)
         amounts received on the related Mortgage Loan(s) in respect of which
         any such Advance was made and (y) amounts not otherwise reimbursed to
         the Trustee pursuant to Section 3.08(a)(ii) hereof;

                  (v) to reimburse the Trustee for any Nonrecoverable Advance
         previously made by the Trustee pursuant to Section 4.01(b) hereof, such
         right of reimbursement pursuant to this subclause (v) being limited to
         amounts not otherwise reimbursed to the Trustee pursuant to Section
         3.08(a)(iii) hereof; and

                  (vi) to clear and terminate the Distribution Account upon
         termination of the Agreement pursuant to Section 9.01 hereof.

                  (c) The Trustee shall withdraw funds from the Carryover
         Reserve Fund for distribution to the Certificateholders in the manner
         specified in this Agreement (and to withhold from the amounts so
         withdrawn, the amount of any taxes that it is authorized to retain
         pursuant to


                                       75

<PAGE>



the last paragraph of Section 8.11). In addition, the Trustee may from time to
time make withdrawals from the Carryover Reserve Fund for the following
purposes:

                  (i) to withdraw pursuant to Section 3.05 any amount deposited
         in the Carryover Reserve Fund and not required to be deposited therein;
         and

                  (ii) to clear and terminate the Carryover Reserve Fund upon
         termination of the Agreement pursuant to Section 9.01 hereof.

         Section 3.09      [Reserved.]

         Section 3.10      MAINTENANCE OF HAZARD INSURANCE.

                  The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the related Mortgagor and/or
mortgagee from becoming a co- insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Master Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Master Servicer's normal servicing
procedures) shall be deposited in the Certificate Account. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section 3.08
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage 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 is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Master Servicer shall cause flood insurance to be maintained with respect to
such Mortgage Loan. Such flood insurance shall be in an amount equal to the
lesser of (i) the original principal balance of the related Mortgage Loan, (ii)
the replacement value of the improvements that are part of such Mortgaged
Property, or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended.

                  Section 3.11 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
                               AGREEMENTS.


                                       76

<PAGE>




                  (a) Except as otherwise provided in this Section 3.11(a), when
any property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master 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 Master Servicer is not 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 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 Master 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 Master Servicer is authorized, subject to Section
3.11(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 Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(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 Master Servicer shall not be deemed to be in
default under this Section 3.11(a) by reason of any transfer or assumption that
the Master Servicer reasonably believes it is restricted by law from preventing.

                  (b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.11(a) hereof, in any
case in which a 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 Mortgage Loan, the
Master 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 Maximum Mortgage Rate, the Minimum Mortgage Rate, the
Gross Margin, the Periodic Rate Cap, the Adjustment Date and any other term
affecting the amount or timing of payment on the Mortgage Loan) may be changed.
In addition, the substitute Mortgagor and the


                                       77

<PAGE>



Mortgaged Property must be acceptable to the Master Servicer in accordance with
its underwriting standards as then in effect. The Master 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 Master Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Master Servicer as additional servicing compensation.

                  Section 3.12 REALIZATION UPON DEFAULTED MORTGAGE LOANS;
                               DETERMINATION OF EXCESS PROCEEDS AND REALIZED
                               LOSSES; REPURCHASE OF CERTAIN MORTGAGE LOANS.

                  (a) The Master 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 Master
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 Master 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 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 Certificate Account pursuant to
Section 3.08 hereof). The Master Servicer shall be responsible for all other
costs and expenses incurred by it in any such proceedings; provided that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Master Servicer has knowledge that a Mortgaged Property that the Master 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 Master Servicer, the Master Servicer will, 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
Master Servicer shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master 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
Master Servicer deems to be in the best interest of the Master


                                       78

<PAGE>



Servicer and the Certificateholders for the period prior to the sale of such REO
Property. The Master 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 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 Certificate Account no later than the close of
business on each Determination Date. The Master Servicer shall perform the tax
reporting and withholding related to foreclosures, abandonments and cancellation
of indebtedness income as specified by Sections 1445, 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 Master Servicer shall dispose of such Mortgaged
Property as soon as practicable in a manner that maximizes the Liquidation
Proceeds, but in no event later than three years after its acquisition by the
Trust Fund or, at the expense of the Trust Fund, the Master Servicer shall
request, 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. In the
event the Trustee shall have been supplied with an Opinion of Counsel (such
opinion not to be an expense of the Trustee) 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 the
Trust Fund as defined in section 860F of the Code or cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding,
the Trust Fund may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel) after the expiration of such
three-year period. 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 the Trust
Fund 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 Master Servicer has agreed to indemnify and hold harmless
the Trust Fund with respect to the imposition of any such taxes.

                  The decision of the Master Servicer to foreclose on a
defaulted Mortgage Loan shall be subject to a determination by the Master
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 Master 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 this Agreement, to be payments on account


                                       79

<PAGE>



of principal and interest on the related Mortgage Notes and shall be deposited
into the Certificate 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 Master Servicer as provided above, shall be
deposited in the Certificate Account on the next succeeding Determination Date
following receipt thereof for distribution on the related Distribution Date,
except that any Excess Proceeds shall be retained by the Master 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, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second,
to reimburse the Master Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; 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 Due Date occurring in 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 Master Servicer shall
determine the respective aggregate amounts of Excess Proceeds and Realized
Losses, if any, for the related Prepayment Period.

                  (c) The Master Servicer, in its sole discretion, shall have
the right to elect (by written notice sent to the Trustee) to purchase for its
own account from the Trust Fund any Mortgage Loan that is 150 days or more
delinquent at a price equal to the Purchase Price; provided, however, that the
Master Servicer may only exercise this right on or before the last day of the
calendar month in which such Mortgage Loan became 150 days delinquent (such
month, the "Eligible Repurchase Month"); provided further, that any such
Mortgage Loan which becomes current but thereafter becomes delinquent may be
purchased by the Master Servicer pursuant to this Section in any ensuing
Eligible Repurchase Month. The Purchase Price for any Mortgage Loan purchased
hereunder shall be delivered to the Trustee for deposit in the Certificate
Account and the Trustee, upon receipt of such deposit and a Request for Release
from the Master Servicer in the form of Exhibit N hereto, shall release or cause
to be released to the purchaser of such Mortgage Loan the related Mortgage File
and shall execute and deliver such instruments of transfer or assignment
prepared by the purchaser of such Mortgage Loan, in each case without recourse,
as shall be necessary to vest in the purchaser of such Mortgage Loan any
Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan
shall succeed to all the Trustee's right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The purchaser of such
Mortgage Loan shall thereupon own such


                                       80

<PAGE>



Mortgage Loan, and all security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.

         Section 3.13      TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.

                  Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Master Servicer will promptly
notify the Trustee by delivering a Request for Release substantially in the form
of Exhibit N. Upon receipt of such request, the Trustee shall promptly release
the related Mortgage File to the Master Servicer, and the Trustee shall at the
Master Servicer's direction execute and deliver to the Master Servicer the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage in each case
provided by the Master Servicer, together with the Mortgage Note with written
evidence of cancellation thereon. The Master Servicer is authorized to cause the
removal from the registration on the MERS(R) System of such Mortgage and to
execute and deliver, on behalf of the Trust Fund and the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation or of
partial or full release. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account, the Distribution Account, the Carryover Reserve Fund or the related
subservicing account. From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such purpose,
collection under any policy of flood insurance any fidelity bond or errors or
omissions policy, or for the purposes of effecting a partial release of any
Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Trustee shall, upon delivery to the Trustee
of a Request for Release in the form of Exhibit M signed by a Servicing Officer,
release the Mortgage File to the Master Servicer. Subject to the further
limitations set forth below, the Master Servicer shall cause the Mortgage File
or documents so released to be returned to the Trustee when the need therefor by
the Master Servicer no longer exists, unless the Mortgage Loan is liquidated and
the proceeds thereof are deposited in the Certificate Account, in which case the
Trustee shall deliver the Request for Release to the Master Servicer.

                  If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered to
the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Master Servicer shall cause possession of any Mortgage File or of the documents
therein that shall have been released by the Trustee to be returned to the
Trustee within 21 calendar days after possession thereof shall have been
released by the Trustee unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Certificate Account, and the Master Servicer shall have delivered to the Trustee
a Request for Release in the form of


                                       81

<PAGE>



Exhibit N or (ii) the Mortgage File or document shall have been delivered to an
attorney or to a public trustee or other public official as required by law for
purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property and the Master Servicer shall have
delivered to the Trustee an Officer's Certificate of a Servicing Officer
certifying as to the name and address of the Person to which the Mortgage File
or the documents therein were delivered and the purpose or purposes of such
delivery.

         Section 3.14 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
                      SERVICER TO BE HELD FOR THE TRUSTEE.

                  Notwithstanding any other provisions of this Agreement, the
Master Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds, Subsequent Recoveries
or Insurance Proceeds in respect of any Mortgage Loan. All Mortgage Files and
funds collected or held by, or under the control of, the Master 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 Certificate Account, shall be held by the Master
Servicer for and on behalf of the Trust Fund and shall be and remain the sole
and exclusive property of the Trust Fund, subject to the applicable provisions
of this Agreement. The Master Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Certificate Account, Distribution Account or Carryover Reserve Fund or in any
Escrow Account (as defined in Section 3.06), 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 Master
Servicer shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Master Servicer under this
Agreement.

         Section 3.15 SERVICING COMPENSATION.

                  As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain or withdraw from the Certificate Account
out of each payment of interest on a Mortgage Loan included in the Trust Fund an
amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.

                  Additional servicing compensation in the form of Excess
Proceeds, assumption fees, late payment charges, Prepayment Interest Excess, and
all income and gain net of any losses realized from Permitted Investments shall
be retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.05 or 3.12(a) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities


                                       82

<PAGE>



hereunder (including payment of any premiums for hazard insurance, as required
by Section 3.10 hereof and maintenance of the other forms of insurance coverage
required by Section 3.10 hereof) and shall not be entitled to reimbursement
therefor except as specifically provided in Sections 3.08 and 3.12 hereof.

         Section 3.16      ACCESS TO CERTAIN DOCUMENTATION.

                  The Master Servicer shall provide to the OTS and the FDIC and
to comparable regulatory authorities supervising Holders of the Certificates or
Certificate Owners and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. Such access
shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices of the Master Servicer
designated by it. Nothing in this Section shall limit the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.

         Section 3.17      ANNUAL STATEMENT AS TO COMPLIANCE.

                  The Master Servicer shall deliver to the Depositor and the
Trustee on or before the 80th day after the end of the Master Servicer's fiscal
year, commencing with its 2004 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of the performance of the Master
Servicer under this Agreement has been made under such officer's supervision and
(ii) to the best of such officer's knowledge, based on such review, the Master
Servicer has fulfilled all 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 officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Subservicer has
fulfilled all its obligations under its Subservicing 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 officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
statement is delivered by the Master Servicer to the Trustee.

         Section 3.18   ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
                        STATEMENT; FINANCIAL STATEMENTS.

                  On or before the later of (i) the 80th day after the end of
the Master Servicer's fiscal year, commencing with its 2004 fiscal year or (ii)
within 30 days of the issuance of the annual audited financial statements
beginning with the audit for the period ending in 2004, the Master Servicer at
its expense shall cause a nationally recognized firm of independent public
accountants


                                       83

<PAGE>



(who may also render other services to the Master Servicer, the Seller or any
affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a report to the Trustee, Depositor and the Seller
in compliance with the Uniform Single Attestation Program for Mortgage Bankers.
Copies of such report shall be provided by the Trustee to any Certificateholder
upon request at the Master Servicer's expense, provided such report is delivered
by the Master Servicer to the Trustee. Upon written request, the Master Servicer
shall provide to the Certificateholders its publicly available annual financial
statements (or, for so long as Countrywide Home Loans Servicing LP is the Master
Servicer hereunder, the Master Servicer's parent company's publicly available
annual financial statements), if any, promptly after they become available.

         Section 3.19      THE CORRIDOR CONTRACT.

                  The Seller shall assign all of its right, title and interest
in and to the interest rate cap transaction evidenced by the Corridor Contract
to, and shall cause all of its obligations in respect of such transaction to be
assumed by, the Trustee on behalf of the Trust Fund, on the terms and conditions
set forth in the Corridor Contract Assignment Agreement. The Corridor Contract
will be an asset of the Trust Fund but will not be an asset of any REMIC. The
Master Servicer, on behalf of the Trustee, shall deposit any amounts received
from time to time with respect to the Corridor Contract into the Carryover
Reserve Fund.

                  The Master Servicer, on behalf of the Trustee, shall prepare
and deliver any notices required to be delivered under the Corridor Contract.

                  The Master Servicer, on behalf of the Trustee, shall act as
calculation agent and/or shall terminate the Corridor Contract upon the
occurrence of certain events of default or termination events to the extent
specified thereunder. Upon any such termination, the Corridor Contract
Counterparty will be obligated to pay the Trustee or the Master Servicer for the
benefit of the Trust Fund an amount in respect of such termination. Any amounts
received by the Trustee or the Master Servicer for the benefit of the Trust
Fund, as the case may be, in respect of such termination shall be deposited and
held in the Carryover Reserve Fund to pay Net Rate Carryover for the
Certificates (by deposit of the amount of any such Net Rate Carryover in the
Carryover Reserve Fund for payment to the Certificateholders) as provided in
Section 4.04(a) on Distribution Dates following such termination to and
including the Corridor Contract Termination Date. On the Corridor Contract
Termination Date, after all other distributions on such date, if any such
amounts in respect of early termination remain in the Carryover Reserve Fund,
such amounts shall be distributed by the Trustee to the Class C
Certificateholder.

         Section 3.20      PREPAYMENT CHARGES.

                  (a) Notwithstanding anything in this Agreement to the
contrary, in the event of a Principal Prepayment in full or in part of a
Mortgage Loan, the Master Servicer may not waive any Prepayment Charge or
portion thereof required by the terms of the related Mortgage Note unless (i)
the Master Servicer determines that such waiver would maximize recovery of
Liquidation Proceeds


                                       84

<PAGE>



for such Mortgage Loan, taking into account the value of such Prepayment Charge,
or (ii) (A) the enforceability thereof is limited (1) by bankruptcy, insolvency,
moratorium, receivership, or other similar law relating to creditors' rights
generally or (2) due to acceleration in connection with a foreclosure or other
involuntary payment, or (B) the enforceability is otherwise limited or
prohibited by applicable law. In the event of a Principal Prepayment in full or
in part with respect to any Mortgage Loan, the Master Servicer shall deliver to
the Trustee an Officer's Certificate substantially in the form of Exhibit T no
later than the third Business Day following the immediately succeeding
Determination Date with a copy to the Class P Certificateholders. If the Master
Servicer has waived or does not collect all or a portion of a Prepayment Charge
relating to a Principal Prepayment in full or in part due to any action or
omission of the Master Servicer, other than as provided above, the Master
Servicer shall deliver to the Trustee, together with the Principal Prepayment in
full or in part, the amount of such Prepayment Charge (or such portion thereof
as had been waived) for deposit into the Certificate Account (not later than the
immediately succeeding Master Servicer Advance Date, in the case of such
Prepayment Charge) for distribution in accordance with the terms of this
Agreement.

                  (b) Upon discovery by the Master Servicer or a Responsible
Officer of the Trustee of a breach of the foregoing subsection (a), the party
discovering the breach shall give prompt written notice to the other parties.

                  (c) The Seller represents and warrants to the Depositor and
the Trustee, as of the Closing Date, that the information in the Prepayment
Charge Schedule (including the attached prepayment charge summary) is complete
and accurate in all material respects at the dates as of which the information
is furnished and each Prepayment Charge is permissible and enforceable in
accordance with its terms under applicable state law, except as the
enforceability thereof is limited due to acceleration in connection with a
foreclosure or other involuntary payment.

                  (d) Upon discovery by the Master Servicer or a Responsible
Officer of the Trustee of a breach of the foregoing clause (c) that materially
and adversely affects right of the Holders of the Class P Certificates to any
Prepayment Charge, the party discovering the breach shall give prompt written
notice to the other parties. Within 60 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of breach, the
Master Servicer shall cure the breach in all material respects or shall pay into
the Certificate Account the amount of the Prepayment Charge that would otherwise
be due from the Mortgagor, less any amount representing such Prepayment Charge
previously collected and paid by the Master Servicer into the Certificate
Account.



                                       85

<PAGE>



                                   ARTICLE IV.

                                DISTRIBUTIONS AND
                         ADVANCES BY THE MASTER SERVICER

         Section 4.01      ADVANCES.

                  (a) The Master Servicer shall determine on or before each
Master Servicer Advance Date whether it is required to make an Advance pursuant
to the definition thereof. If the Master Servicer determines it is required to
make an Advance, it shall, on or before the Master Servicer Advance Date, either
(i) deposit into the Certificate Account an amount equal to the Advance or (ii)
make an appropriate entry in its records relating to the Certificate Account
that any Amount Held for Future Distribution has been used by the Master
Servicer in discharge of its obligation to make any such Advance. Any funds so
applied shall be replaced by the Master Servicer by deposit in the Certificate
Account no later than the close of business on the next Master Servicer Advance
Date. The Master Servicer shall be entitled to be reimbursed from the
Certificate Account for all Advances of its own funds made pursuant to this
Section as provided in Section 3.08. The obligation to make Advances with
respect to any Mortgage Loan shall continue if such Mortgage Loan has been
foreclosed or otherwise terminated and the related Mortgaged Property has not
been liquidated.

                  (b) If the Master Servicer determines that it will be unable
to comply with its obligation to make the Advances as and when described in the
second sentence of Section 4.01(a), it shall use its best efforts to give
written notice thereof to the Trustee (each such notice a "Trustee Advance
Notice"; and such notice may be given by telecopy), not later than 3:00 P.M.,
New York time, on the Business Day immediately preceding the related Master
Servicer Advance Date, specifying the amount that it will be unable to deposit
(each such amount an "Advance Deficiency") and certifying that such Advance
Deficiency constitutes an Advance hereunder and is not a Nonrecoverable Advance.
If the Trustee receives a Trustee Advance Notice on or before 3:30 P.M., New
York time on a Master Servicer Advance Date, the Trustee shall, not later than
3:00 P.M., New York time, on the related Distribution Date, deposit in the
Distribution Account an amount equal to the Advance Deficiency identified in
such Trustee Advance Notice unless it is prohibited from so doing by applicable
law. Notwithstanding the foregoing, the Trustee shall not be required to make
such deposit if the Trustee shall have received written notification from the
Master Servicer that the Master Servicer has deposited or caused to be deposited
in the Certificate Account an amount equal to such Advance Deficiency. All
Advances made by the Trustee pursuant to this Section 4.01(b) shall accrue
interest on behalf of the Trustee at the Trustee Advance Rate from and including
the date such Advances are made to but excluding the date of repayment, with
such interest being an obligation of the Master Servicer and not the Trust Fund.
The Master Servicer shall reimburse the Trustee for the amount of any Advance
made by the Trustee pursuant to this Section 4.01(b) together with accrued
interest, not later than 6:00 P.M., New York time on the Business Day following
the related Distribution Date. In the event that the Master Servicer does not
reimburse the Trustee in accordance with the requirements of the preceding
sentence, the Trustee shall immediately (a)


                                       86

<PAGE>



terminate all of the rights and obligations of the Master Servicer under this
Agreement in accordance with Section 7.01 and (b) subject to the limitations set
forth in Section 3.04, assume all of the rights and obligations of the Master
Servicer hereunder.

                  (c) The Master Servicer, not later than the close of business
on the second Business Day immediately preceding each Distribution Date, shall
deliver to the Trustee a report (in the form and substance reasonably
satisfactory to the Trustee) that indicates (i) the Mortgage Loans with respect
to which the Master Servicer has determined that the related Scheduled Payments
should be advanced and (ii) the amount of the related Scheduled Payments. The
Master Servicer shall deliver to the Trustee on the related Master Servicer
Advance Date an Officer's Certificate of a Servicing Officer indicating the
amount of any proposed Advance determined by the Master Servicer to be a
Nonrecoverable Advance.

         Section 4.02  REDUCTION OF SERVICING COMPENSATION IN CONNECTION WITH
                       PREPAYMENT INTEREST SHORTFALLS.

                  In the event that any Mortgage Loan is the subject of a
Prepayment Interest Shortfall, the Master Servicer shall, to the extent of
one-half of the Servicing Fee for such Distribution Date, deposit into the
Certificate Account, as a reduction of the Servicing Fee (but not in excess of
one- half thereof) for such Distribution Date, no later than the close of
business on the Business Day immediately preceding such Distribution Date, an
amount equal to the Prepayment Interest Shortfall; and in case of such deposit,
the Master Servicer shall not be entitled to any recovery or reimbursement from
the Depositor, the Trustee, the Trust Fund or the Certificateholders.

         Section 4.03      [Reserved]

         Section 4.04      DISTRIBUTIONS.

                  (a) On each Distribution Date, the Interest Funds for such
Distribution Date shall be allocated by the Trustee from the Distribution
Account in the following order of priority, until such Interest Funds have been
fully disbursed:

                  (i) to the Class A-1 Certificates, the Class A-1 Current
         Interest and any Class A-1 Interest Carry Forward Amount;

                  (ii) to the Class M-1 Certificates, the Class M-1 Current
         Interest;

                  (iii) to the Class M-2 Certificates, the Class M-2 Current
         Interest;

                  (iv) to the Class M-3 Certificates, the Class M-3 Current
         Interest;

                  (v) to the Class M-4 Certificates, the Class M-4 Current
         Interest;



                                       87

<PAGE>



                  (vi) to the Class M-5 Certificates, the Class M-5 Current
         Interest;

                  (vii) to the Class B Certificates, the Class B Current
         Interest; and

                  (viii) any remainder, as part of the Excess Cashflow.

                  (b) On each Distribution Date on or prior to the Corridor
Contract Termination Date, amounts received in respect of the Corridor Contract
for such Distribution Date will be deposited in the Carryover Reserve Fund to be
distributed to each Class of Certificates (other than the Class A-R and Class P
Certificates) pursuant to Sections 4.04(e)(xiv), (xv) and (xvi); provided,
however, that if the Corridor Contract is subject to early termination, early
termination payments shall be held by the Trustee until the Corridor Contract
Termination Date and deposited in the Carryover Reserve Fund, as necessary, to
pay any Net Rate Carryover as provided in Section 3.19.

                  (c) Upon the earlier of (a) the exercise of the Optional
Termination by the Master Servicer pursuant to Section 9.01 and (b) the Class P
Principal Distribution Date, all funds on deposit in the Class P Distribution
Account shall be distributed the Class P Certificates.

                  (d) On each Distribution Date, the Principal Distribution
         Amount for such Distribution Date shall be allocated by the Trustee
         from the Distribution Account in the following order of priority until
         such Principal Distribution Amount has been fully distributed:

                  (i) with respect to any Distribution Date prior to the
         Stepdown Date or as to which a Trigger Event is in effect:

                           (A) sequentially, to the Class A-R, Class A-1, Class
                  M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class B
                  Certificates, in that order, in each case until the
                  Certificate Principal Balance thereof is reduced to zero;

                           (B) any remainder, as part of the Excess Cashflow.

                  (ii) with respect to each Distribution Date on and after the
         Stepdown Date and as to which a Trigger Event is not in effect:

                           (A) to the Class A-1 Certificates, the Class A-1
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

                           (B) to the Class M-1 Certificates, the Class M-1
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

                           (C) to the Class M-2 Certificates, the Class M-2
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;



                                       88

<PAGE>



                           (D) to the Class M-3 Certificates, the Class M-3
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

                           (E) to the Class M-4 Certificates, the Class M-4
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

                           (F) to the Class M-5 Certificates, the Class M-5
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

                           (G) to the Class B Certificates, the Class B
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero; and

                           (H) any remainder, as part of the Excess Cashflow.

                  (e) With respect to any Distribution Date, any Excess Cashflow
and Corridor Contract Payment Amount (with respect to clauses (xiv) through
(xvii) below) will be paid to the classes of Certificates as follows:

                  (i) from Excess Cashflow, to the holders of the Class or
         Classes of Offered Certificates then entitled to receive distributions
         in respect of principal, in an amount equal to the Extra Principal
         Distribution Amount, payable to such holders as part of the Principal
         Distribution Amount pursuant to Section 4.04(d) above;

                  (ii) from any remaining Excess Cashflow, to the holders of the
         Class M-1, Certificates, in an amount equal to any unpaid Interest
         Carry Forward Amount for such Class;;

                  (iii) from any remaining Excess Cashflow, to the holders of
         the Class M-1 Certificates, in an amount equal to the Unpaid Realized
         Loss Amounts for such Class;;

                  (iv) from any remaining Excess Cashflow, to the holders of the
         Class M-2, Certificates, in an amount equal to any unpaid Interest
         Carry Forward Amount for such Class;
                  (v) from any remaining Excess Cashflow, to the holders of the
         Class M-2 Certificates, in an amount equal to the Unpaid Realized Loss
         Amounts for such Class;

                  (vi) from any remaining Excess Cashflow, to the holders of the
         Class M-3 Certificates, in an amount equal to any unpaid Interest Carry
         Forward Amount for such Class;

                  (vii) from any remaining Excess Cashflow, to the holders of
         the Class M-3 Certificates, in an amount equal to the Unpaid Realized
         Loss Amounts for such Class;



                                       89

<PAGE>



                  (viii) from any remaining Excess Cashflow, to the holders of
         the Class M-4 Certificates, in an amount equal to any unpaid Interest
         Carry Forward Amount for such Class;

                  (ix) from any remaining Excess Cashflow, to the holders of the
         Class M-4 Certificates, in an amount equal to the Unpaid Realized Loss
         Amounts for such Class;

                  (x) from any remaining Excess Cashflow, to the holders of the
         Class M-5 Certificates, in an amount equal to any unpaid Interest Carry
         Forward Amount for such Class;

                  (xi) from any remaining Excess Cashflow, to the holders of the
         Class M-5 Certificates, in an amount equal to the Unpaid Realized Loss
         Amounts for such Class;

                  (xii) from any remaining Excess Cashflow, to the holders of
         the Class B Certificates, in an amount equal to any unpaid Interest
         Carry Forward Amount for such Class;

                  (xiii) from any remaining Excess Cashflow, to the holders of
         the Class B Certificates, in an amount equal to the Unpaid Realized
         Loss Amounts for such Class;

                  (xiv) from the Corridor Contract Payment Amount, to the Class
         A-1, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class B
         Certificates, on a pro rata basis, based on the Certificate Principal
         Balances thereof, to the extent needed to pay any related Net Rate
         Carryover for each such class; provided that any Corridor Contract
         Payment Amount remaining after such allocation to pay Net Rate
         Carryover based on the Certificate Principal Balances of these
         Certificates will be distributed to each such class of Certificates
         with respect to which there remains any unpaid Net Rate Carryover
         (after the distribution based on Certificate Principal Balances), pro
         rata, based on the amount of such unpaid Net Rate Carryover, until
         reduced to zero;

                  (xv) from any remaining Excess Cashflow and from any remaining
         Corridor Contract Payment Amount as provided in clause (xiv) above, to
         the Class A-1, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5
         and Class B Certificates, on a pro rata basis, based on the Certificate
         Principal Balances thereof, to the extent needed to pay any remaining
         Net Rate Carryover for each such class; provided that any Excess
         Cashflow remaining after such allocation to pay Net Rate Carryover
         based on the Certificate Principal Balances of these Certificates will
         be distributed to each such class of Certificates with respect to which
         there remains any unpaid Net Rate Carryover (after the distribution
         based on Certificate Principal Balances), pro rata, based on the amount
         of such unpaid Net Rate Carryover, until reduced to zero;

                  (xvi) from any remaining Excess Cashflow and Corridor Contract
         Payment


                                       90

<PAGE>



         Amount, to the Class C Certificates, (x) the Class C Current Interest
         and (y) any remaining Excess Cashflow shall be paid to the Class C
         Certificates to reduce the Class C Notional Amount, until the Class C
         Notional Amount has been reduced to zero; and

                  (xvii) any remaining Excess Cashflow and Corridor Contract
         Payment Amount, to the Class A-R Certificates.

                  (f) On each Distribution Date, all Prepayment Charges
         (including amounts deposited in connection with the full or partial
         waiver of such Prepayment Charges pursuant to Section 3.20) shall be
         distributed to the Class P Certificates.

                  (g) To the extent that a Class of Certificates (other than the
         Class A-R, Class C and Class P Certificates) receives interest in
         excess of the Net Rate Cap, such interest shall be treated as having
         been paid to the Carryover Reserve Fund and then paid by the Carryover
         Reserve Fund to such Certificateholders.

                  (h) [reserved]

                  (i) On each Distribution Date, the Trustee shall allocate the
         Applied Realized Loss Amount to reduce the Certificate Principal
         Balances of the Subordinate Certificates in the following order of
         priority:

                  (i) to the Class B Certificates until the Class B Certificate
         Principal Balance is reduced to zero;

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

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

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

                  (v) to the Class M-2 Certificates until the Class M-2
         Certificate Principal Balance is reduced to zero; and

                  (vi) to the Class M-1 Certificates until the Class M-1
         Certificate Principal Balance is reduced to zero.

                  (j) Subject to Section 9.02 hereof respecting the final
         distribution, on each Distribution Date the Trustee shall make
         distributions to each Certificateholder of record on the preceding
         Record Date either by wire transfer in immediately available funds to
         the account of such


                                       91

<PAGE>



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 9.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the name
of a Depository shall be made to such Depository in immediately available funds.

                  On or before 5:00 p.m. Pacific time on the fifth Business Day
following each Determination Date (but in no event later than 5:00 p.m. Pacific
time on the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to by the Master Servicer and the Trustee such as to permit the Trustee
to prepare the Monthly Statement to Certificateholders and make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Trustee shall not be responsible to recompute, recalculate or verify information
provided to it by the Master Servicer and shall be permitted to conclusively
rely on any information provided to it by the Master Servicer.

         Section 4.05      MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.

                  (a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Holder of a Class
of Certificates of the Trust Fund, the Master Servicer, the Seller and the
Depositor a statement setting forth for the 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 and (B) the
         aggregate of all scheduled payments of principal included therein;

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

                  (iii) any Interest Carry Forward Amount for each Class;

                  (iv) the Certificate Principal Balance of each Class after
         giving effect (i) to all distributions allocable to principal on such
         Distribution Date and (ii) the allocation of any Applied Realized Loss
         Amounts for such Distribution Date;

                  (v) the aggregate of the Stated Principal Balances of the
         Mortgage Loans for the Mortgage Pool;

                  (vi) the related amount of the Servicing Fees paid to or
         retained by the Master


                                       92

<PAGE>



         Servicer for the related Due Period;

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

                  (viii) with respect to the April 2004 Distribution Date, the
         Seller Shortfall Interest Requirement (if any) for the related Master
         Servicer Advance Date;

                  (ix) the amount of Advances included in the distribution on
         such Distribution Date;

                  (x) the cumulative amount of Applied Realized Loss Amounts to
         date;

                  (xi) the number and aggregate principal amounts of Mortgage
         Loans: (A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1)
         30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, and (B) in
         foreclosure and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3)
         90 or more days, in each case as of the close of business on the last
         day of the calendar month preceding such Distribution Date;

                  (xii) with respect to any Mortgage Loan that became an REO
         Property during the preceding calendar month, the loan number and
         Stated Principal Balance of such Mortgage Loan;

                  (xiii) and the aggregate Stated Principal Balances of any
         Mortgage Loans converted to REO Properties as of the close of business
         on the Determination Date preceding such Distribution Date;

                  (xiv) the aggregate Stated Principal Balances of all
         Liquidated Loans;

                  (xv) with respect to any Liquidated Loan, the loan number and
         Stated Principal Balance relating thereto;

                  (xvi) whether a Trigger Event is in effect;

                  (xvii) any Net Rate Carryover paid on each Class of
         Certificates (other than the Class A-R, Class C and Class P
         Certificates) and any remaining Net Rate Carryover remaining on each
         Class of Certificates (other than the Class A-R, Class C and Class P
         Certificates) on such Distribution Date;

                  (xviii) the amount of Prepayment Charges collected or waived
         by the Master Servicer;

                  (xix) [reserved];


                                       93

<PAGE>




                  (xx) [reserved]; and

                  (xxi) the amount, if any, received under the Corridor Contract
         for such Distribution Date.

                  (b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the Master Servicer. The Trustee
will send a copy of each statement provided pursuant to this Section 4.05 to
each Rating Agency. The Trustee may make the above information available to
Certificateholders via the Trustee's website at HTTP://WWW.MBSREPORTING.COM.

                  (c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished 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), (a)(ii) and (a)(vi) of this Section
4.05 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 Class A-R Certificates the Form 1066 and
each Form 1066Q and shall respond promptly to written requests made not more
frequently than quarterly by any Holder of Class A-R Certificates with respect
to the following matters:

                  (i) The original projected principal and interest cash flows
         on the Closing Date on each related 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 related
         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 related
         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


                                       94

<PAGE>



         indebtedness income of the related 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 the
         related REMIC; and

                  (vii) Any taxes (including penalties and interest) imposed on
         the related 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 8.11.

         Section 4.06      [Reserved]

         Section 4.07      [Reserved]

         Section 4.08      CARRYOVER RESERVE FUND.

                  (a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the
Certificates, the Carryover Reserve Fund. The Carryover Reserve Fund shall be an
Eligible Account, and funds on deposit therein shall be held separate and apart
from, and shall not be commingled with, any other moneys, including without
limitation, other moneys held by the Trustee pursuant to this Agreement.

                  (b) The Trustee shall make withdrawals from the Carryover
Reserve Fund to make distributions of amounts payable from the Corridor Contract
to the Certificates pursuant to paragraph (e) of Section 4.04 hereof. Any
amounts remaining after the distributions required pursuant to preceding
sentence shall be distributed to the Class C Certificates; provided, however,
that if the Corridor Contract is subject to early termination, early termination
payments received on such Corridor Contract will be held by the Trustee until
the Corridor Contract Termination Date and deposited in the Carryover Reserve
Fund as necessary to cover any Net Rate Carryover on the Certificates entitled
thereto on future Distribution Dates.

                  (c) Funds in the Carryover Reserve Fund may be invested in
Permitted Investments. Any earnings on such amounts shall be payable to the
Class C Certificates. The Class C Certificates shall evidence ownership of the
Carryover Reserve Fund for federal tax purposes and the Holders thereof
evidencing not less than 50% of the Voting Rights of such Class shall direct the
Trustee in writing as to the investment of amounts therein. In the absence of
such written direction, all funds in the Carryover Reserve Fund shall be
invested by the Trustee in The Bank of New York cash reserves.

                  (d) Upon termination of the Trust Fund, any amounts remaining
in the Carryover


                                       95

<PAGE>



Reserve Fund shall be distributed to the Holders of the Class C Certificates in
the same manner as if distributed pursuant to Section 4.04(f) hereof.

         Section 4.09 DISTRIBUTIONS ON THE REMIC I REGULAR INTERESTS.

                  (a)(1)(A) On each Distribution Date, the following amounts, in
the following order of priority, 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 AR Certificates (in respect
of the Class R-I Interest), as the case may be:

                           (i) first, (a) to Holders of REMIC I Regular Interest
LT-AA, REMIC Regular Interest LT-A1, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC Regular Interest LT-M3, REMIC Regular Interest
LT-M4, REMIC Regular Interest LT-M5, REMIC Regular Interest LT-B, REMIC I
Regular Interest LT-ZZ, REMIC I Regular Interest LT-P and REMIC I Regular
Interest LT-AR, pro rata, in an amount equal to (A) the Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates. Amounts payable as
Uncertificated Accrued Interest in respect of REMIC I Regular Interest LT-ZZ
shall be reduced and deferred when the REMIC I Overcollateralized Amount is less
than the REMIC I Overcollateralization Target Amount, by the lesser of (x) the
amount of such difference and (y) the REMIC I Regular Interest LT-ZZ Maximum
Interest Deferral Amount and such amount will be payable to the Holders of REMIC
I Regular Interest LT-A1, REMIC I Regular Interest LT-M1, REMIC I Regular
Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC Regular Interest LT-M4,
REMIC Regular Interest LT-M5, and REMIC Regular Interest LT-B in the same
proportion as the Overcollateralization Increase Amount is allocated to the
Corresponding Certificates and the Uncertificated Principal Balance of REMIC I
Regular Interest LT-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 Available Funds for such
Distribution Date after the distributions made pursuant to clause (i) above,
allocated as follows:

                  (a) to the Holders of REMIC I Regular Interest LT-AA and REMIC
I Regular Interest LT-P, 98.00% of such remainder (other than amounts payable
under clause (d) below), until the Uncertificated Principal Balance of such
REMIC I Regular Interest is reduced to zero, provided, however, that REMIC I
Regular Interest LT-P shall not be reduced until the Distribution Date
immediately following the expiration of the latest Prepayment Charge as
identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC I Regular
Interest LT-P, until $100 has been distributed pursuant to this clause;

                  (b) to the Holders of REMIC I Regular Interest LT-A1, REMIC I
Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I Regular Interest
LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular Interest LT-M5, REMIC I
Regular Interest LT-B, and REMIC


                                       96

<PAGE>



Regular Interest LT-R, 1.00% of such remainder (other than amounts payable under
clause (d) below), 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;

                  (c) to the Holders of REMIC I Regular Interest LT-ZZ, 1.00% of
such remainder (other than amounts payable under clause (d) below), until the
Uncertificated Principal Balance of such REMIC I Regular Interest is reduced to
zero; then

                  (d) any remaining amount to the Holders of the Class AR
Certificates (in respect of the Class R-I Interest); and

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to Holders of (i) REMIC I Regular Interest LT-AA and REMIC I Regular Interest
LT-P, in that order and (ii) REMIC I Regular Interest LT-P, respectively;
provided that REMIC I Regular Interest LT-P shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC I Regular
Interest LT-P, until $100 has been distributed pursuant to this clause.

                  On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC I to the Holders of REMIC I Regular Interest
LT-P. The payment of the foregoing amounts to the Holders of REMIC I Regular
Interest LT-P shall not reduce the Uncertificated Principal Balance thereof.

         Section 4.10      [Reserved].

         Section 4.11 ALLOCATION OF REALIZED LOSSES ON THE REMIC I REGULAR
                      INTERESTS.

                  All Realized Losses on the Mortgage Loans shall be allocated
by the Trustee on each Distribution Date to the following REMIC I Regular
Interests in the specified percentages, as follows: first, to Uncertificated
Interest payable to the REMIC I Regular Interest LT-AA and REMIC I Regular
Interest LT-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 the REMIC I Regular Interest LT-AA and REMIC I Regular
Interest LT-ZZ up to an aggregate amount equal to the REMIC I Principal Loss
Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC I Regular Interest LT-AA, REMIC I Regular Interest
LT-B and REMIC I Regular Interest LT-ZZ, 98%, 1.00% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC I Regular Interest LT-B has been
reduced to zero; fourth to the Uncertificated Principal Balances of REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-M5 and REMIC I Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LT-M5 has been reduced to zero; fifth


                                       97

<PAGE>



to the Uncertificated Principal Balances of REMIC I Regular Interest LT-AA,
REMIC I Regular Interest LT-M4 and REMIC I Regular Interest LT-ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M4 has been reduced to zero; sixth to the Uncertificated Principal
Balances of REMIC I Regular Interest LT-AA, REMIC I Regular Interest LT-M3 and
REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M3 has been
reduced to zero; seventh to the Uncertificated Principal Balances of REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-M2 and REMIC I Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LT-M2 has been reduced to zero; and eighth
to the Uncertificated Principal Balances of REMIC I Regular Interest LT-AA,
REMIC I Regular Interest LT-M1 and REMIC I Regular Interest LT-ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M1 has been reduced to zero.]

         Section 4.12      The Class P Certificates.

         On the Closing Date, $100 shall be deposited into the Class P
Distribution Account and shall be held in trust for the benefit of the Class P
Certificateholders for payment pursuant to Section 4.04 upon the earlier of (a)
the exercise of the Optional Termination by the Master Servicer pursuant to
Section 9.01 and (b) the Class P Principal Distribution Date. Such funds may not
be invested.





                                       98

<PAGE>



                                   ARTICLE V.

                                THE CERTIFICATES

         Section 5.01 THE CERTIFICATES.

                  The Certificates shall be substantially in the forms attached
hereto as Exhibits A-1 through A-7, B, C and D. The Certificates shall be
issuable in registered form, in the minimum dollar denominations, integral
dollar multiples in excess thereof and aggregate dollar denominations as set
forth in the following table:


                                             Integral                Original
                                             Multiples              Certificate
                          Minimum          in Excess of              Principal
      Class            Denomination           Minimum                 Balance
       A-1                $20,000              $1,000             $859,560,00
       A-R                $99.95(1)               N/A                    $100
       M-1                $20,000              $1,000             $65,000,000
       M-2                $20,000              $1,000             $52,000,000
       M-3                $20,000              $1,000             $15,600,000
       M-4                $20,000              $1,000             $15,600,000
       M-5                $20,000              $1,000             $13,000,000
        B                 $20,000              $1,000             $10,400,000
        C                      20%                  1%          $8,839,900.00
        P                      20%                  1%                   $100

(1) The Tax Matters Person Certificate may be issued in a denomination of $0.05.

                  The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. 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 a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the written direction of the Depositor, or any affiliate thereof.

         Section 5.02 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 5.09 hereof, 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,


                                       99

<PAGE>



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 state securities laws, in order to assure
compliance with the Securities Act and such state securities 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 J (the
"Transferor Certificate") and (i) deliver a letter in substantially the form of
either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the
Certificateholder desiring to effect such transfer an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act. 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 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 and the Master Servicer 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


                                       100

<PAGE>



to effect such Transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor, the Seller and the Master Servicer 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 or a
Subordinate 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 (in the event such
Certificate is a Private Certificate that is a Definitive Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit K or Exhibit L,
or in the event such Certificate is a Class A-R Certificate, such requirement is
satisfied only by the Trustee's receipt of a representation letter from the
transferee substantially in the form of Exhibit I), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section 406
of ERISA or a plan or arrangement subject to Section 4975 of the Code, nor a
Person acting on behalf of any such plan or arrangement or using the assets of
any such plan or arrangement to effect such transfer, or (ii) in the case of the
Subordinate Certificates, a representation from the transferee of such
Certificates that (A) it has acquired and is holding such Certificate in
reliance on the Underwriters' Exemption and that it understands that there are
certain conditions to the availability of the Underwriters' Exemption, including
that the Certificate must be rated, at the time of purchase, not less than
"BBB-" or its equivalent by one of the Rating Agencies or (B) the purchaser is
an insurance company which is purchasing such Certificates with funds contained
in an "insurance company general account" (as such term is defined in Section
V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and the
conditions of Sections I and III of PTCE 95-60 have been satisfied or (iii) in
the case of the Class C Certificates or the Class P Certificates if such
Certificates have been offered in a placement or underwriting which meets the
requirements of the Underwriter's Exemption, a representation that the purchaser
is an insurance company which is purchasing such Certificates with funds
contained in or "insurance company general account" (as such term is defined in
Section V(e) of PTCE 95-60) and the conditions of sections I and III of PTCE
95-60 have been satisfied, or in the case of any ERISA-Restricted Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement 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 or arrangement, or
using such plan's or arrangement's assets, an opinion of counsel satisfactory to
the Trustee, for the benefit of the Trustee, the Seller, the Depositor and the
Master Servicer, and on which they may rely, which opinion of counsel shall not
be an expense of either the Trustee or the Trust Fund, addressed to the Trustee
to the effect that the purchase and holding of such ERISA-Restricted Certificate
is permissible under applicable law, will not constitute or result in a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code and will not subject the Depositor, the Seller, the Master Servicer or
Trustee to any obligation, or liability (including liabilities or obligations
under ERISA or Section 4975 of the Code) in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the preceding
sentence, with respect to an ERISA-Restricted Certificate that is not a
Book-Entry Certificate or a Class A-R Certificate, in the event the
representation letter referred to in the preceding sentence is not so furnished,
such representation shall be deemed to have been made to the Trustee by the
transferee's


                                       101

<PAGE>



(including an initial acquiror's) acceptance of such ERISA-Restricted
Certificate. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA-Restricted Certificate or a Subordinate Certificate to or
on behalf of an employee benefit plan subject to ERISA or the Code without the
delivery to the Trustee of a representation or an opinion of counsel
satisfactory to the Trustee as described above shall be void and of no effect.
Any purported beneficial owner whose acquisition or holding of the Certificate
or interest therein was effected in violation of the conditions described in
this paragraph shall indemnify and hold harmless the Depositor, the Trustee, the
Master Servicer, the Seller, any Subservicer and the Trust Fund from and against
any and all liabilities, claims, costs or expenses incurred by those parties as
a result of that acquisition or holding.

                  To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of Transfer of any ERISA- Restricted Certificate that is in
fact not permitted by this Section 5.02(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 so long as the Transfer
was registered by the Trustee in accordance with the foregoing requirements.

                  (c) Each Person who has or who acquires any Ownership Interest
in a Class A-R 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 Class A-R
Certificate are expressly subject to the following provisions:

                  (i) Each Person holding or acquiring any Ownership Interest in
         a Class A-R 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 Class A-R Certificate may be
         registered on the Closing Date or thereafter transferred, and the
         Trustee shall not register the Transfer of any Class A-R Certificate
         unless, in addition to the representation letters 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 I.

                  (iii) Each Person holding or acquiring any Ownership Interest
         in a Class A-R 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 Class A-R 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 Class A-R Certificate and (C) not to Transfer its Ownership Interest
         in a Class A-R Certificate or to cause the Transfer of an Ownership
         Interest in a Class A-R 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 Class A-


                                       102

<PAGE>



         R Certificate in violation of the provisions of this Section 5.02(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 Class A-R Certificate in violation of the provisions of this
         Section 5.02(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 Class A-R Certificate. The Trustee
         shall be under no liability to any Person for any registration of
         Transfer of a Class A-R Certificate that is in fact not permitted by
         Section 5.02(b) and this Section 5.02(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, Transferor Certificate and either the Rule 144A
         Letter or the Investment Letter. The Trustee shall be entitled but not
         obligated to recover from any Holder of a Class A-R 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
         Transferee, all payments made on such Class A-R 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.

                  (v) The Depositor shall use its best efforts to make
         available, upon receipt of written request from the Trustee, all
         information necessary to compute any tax imposed under Section 860E(e)
         of the Code as a result of a Transfer of an Ownership Interest in a
         Class A-R Certificate to any Holder who is not a Permitted Transferee.

                  The restrictions on Transfers of a Class A-R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class A-R 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 Trust Fund, the Trustee,
the Seller or the Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder 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 Class A-R 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 Class A-R 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 Class A-R
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 representation letters
and opinions referred to above in this Section 5.02 in connection with any
Transfers shall be at the expense of the parties to such Transfers.

         Section 5.03   MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

                  If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives


                                       103

<PAGE>



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
Master Servicer and 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 5.03, 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 5.03 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 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.

         Section 5.04   PERSONS DEEMED OWNERS.

                  The Master Servicer, the Trustee and any agent of the Master
Servicer or 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 Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the contrary.

         Section 5.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.

                  If three or more Certificateholders and/or Certificate Owners
(a) request such information in writing from the Trustee, (b) state that such
Certificateholders and/or Certificate Owners desire to communicate with other
Certificateholders and/or Certificate Owners with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders and/or Certificate Owners propose to
transmit or if the Depositor or Master Servicer 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, the Master Servicer or
such Certificateholders and/or Certificate Owners at such recipients' expense
the most recent list of the Certificateholders and/or Certificate Owners of the
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder or Certificate Owner, 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 5.06   BOOK-ENTRY CERTIFICATES.

                  The Regular 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


                                       104

<PAGE>



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 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of such Certificates pursuant to Section 5.08:

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

                  (b) the Depositor, the Seller, the Master Servicer 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 5.08, 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.

                  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 5.07      NOTICES TO DEPOSITORY.



                                       105

<PAGE>



                  Whenever any notice or other communication is required to be
given to Certificateholders of the 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 5.08      DEFINITIVE CERTIFICATES.

                  If, after Book-Entry Certificates have been issued with
respect to any Certificates, (a) the Depositor 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 Certificate Owners of such Class 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 authenticate 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 5.09      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 in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its offices at 101 Barclay Street, New York, New
York 10286, Attention: Corporate Trust MBS Administration, as offices for such
purposes. The Trustee will give prompt written notice to the Certificateholders
of any change in such location of any such office or agency.




                                       106

<PAGE>



                                   ARTICLE VI.

                THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER

         Section 6.01  RESPECTIVE LIABILITIES OF THE DEPOSITOR, THE MASTER
                       SERVICER AND THE SELLER.

                  The Depositor, the Master Servicer and the Seller shall each
be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.

         Section 6.02  MERGER OR CONSOLIDATION OF THE DEPOSITOR, THE MASTER
                       SERVICER OR THE SELLER.

                  Each of the Depositor and the Seller will keep in full effect
its existence, rights and franchises as a corporation under the laws of the
United States or under the laws of one of the states thereof and will each
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, or any of the
Mortgage Loans and to perform its duties under this Agreement. The Master
Servicer will keep in effect its existence, rights and franchises as a limited
partnership under the laws of the United States or under the laws of one of the
states thereof and will obtain and preserve its qualification or registration to
do business as a foreign partnership in each jurisdiction in which such
qualification or registration is or shall be necessary to protect the validity
and enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.

                  Any Person into which the Depositor, the Master Servicer or
the Seller may be merged or consolidated, or any Person resulting from any
merger or consolidation to which the Depositor, the Master Servicer or the
Seller shall be a party, or any person succeeding to the business of the
Depositor, the Master Servicer or the Seller, shall be the successor of the
Depositor, the Master Servicer or the Seller, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided that the successor or surviving Person to the Master Servicer shall be
qualified to service mortgage loans on behalf of Fannie Mae or Freddie Mac.

         Section 6.03  LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SELLER, THE
                       MASTER SERVICER AND OTHERS.

                  None of the Depositor, the Seller, the Master Servicer or any
of the directors, officers, employees or agents of the Depositor, the Seller or
the Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided that this provision shall not protect the Depositor, the Seller, the
Master Servicer or any such Person against any breach of representations or
warranties made by it herein or protect the Depositor, the Seller, the Master
Servicer or any such Person from any liability that would otherwise be imposed
by reasons


                                       107

<PAGE>



of willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Depositor, the Seller, the Master Servicer and any director, officer,
employee or agent of the Depositor, the Seller or the Master Servicer may rely
in good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
the Seller, the Master Servicer and any director, officer, employee or agent of
the Depositor, the Seller or the Master Servicer shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the Certificates, other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. None of the Depositor,
the Seller or the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and that in its opinion may involve it in any expense or
liability; provided that any of the Depositor, the Seller or the Master Servicer
may, in its discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto and interests of the Trustee and 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 Depositor, the Seller and the Master Servicer shall be entitled to be
reimbursed therefor out of the Certificate Account as provided by Section 3.08
hereof.

         Section 6.04      LIMITATION ON RESIGNATION OF MASTER SERVICER.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a successor servicer to such
appointment shall have assumed the Master Servicer's responsibilities, duties,
liabilities and obligations hereunder.

         Section 6.05      ERRORS AND OMISSIONS INSURANCE; FIDELITY BONDS.

                  The Master Servicer shall, for so long as it acts as servicer
under this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Fannie Mae or Freddie Mac for
persons performing servicing for mortgage loans purchased by Fannie Mae or
Freddie Mac. In the event that any such policy or bond ceases to be in effect,
the Master Servicer shall use its reasonable best efforts to obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.


                                       108

<PAGE>






                                  ARTICLE VII.

                     DEFAULT; TERMINATION OF MASTER SERVICER

         Section 7.01      EVENTS OF DEFAULT.

                  "Event of Default," wherever used herein, means any one of the
following events:

                  (i) any failure by the Master Servicer to deposit in the
         Certificate Account or the Distribution Account or remit to the Trustee
         any payment (excluding a payment required to be made under Section 4.01
         hereof) required to be made under the terms of this Agreement, which
         failure shall continue unremedied for five calendar days and, with
         respect to a payment required to be made under Section 4.01 hereof, for
         one Business Day, after the date on which written notice of such
         failure shall have been given to the Master Servicer by the Trustee,
         the Seller or the Depositor, or to the Trustee and the Master Servicer
         by the Holders of Certificates evidencing not less than 25% of the
         Voting Rights evidenced by the Certificates; or

                  (ii) any failure by the Master Servicer to observe or perform
         in any material respect any other of the covenants or agreements on the
         part of the Master Servicer contained in this Agreement or any
         representation or warranty shall prove to be untrue, which failure or
         breach shall continue unremedied for a period of 60 days after the date
         on which written notice of such failure shall have been given to the
         Master Servicer by the Trustee or the Depositor, or to the Trustee by
         the Holders of Certificates evidencing not less than 25% of the Voting
         Rights evidenced by the Certificates; provided that the sixty-day cure
         period shall not apply to the initial delivery of the Mortgage File for
         Delay Delivery Mortgage Loans nor the failure to repurchase or
         substitute in lieu thereof; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises for the appointment of a
         receiver or liquidator in any insolvency, readjustment of debt,
         marshalling of assets and liabilities or similar proceedings, or for
         the winding-up or liquidation of its affairs, shall have been entered
         against the Master Servicer and such decree or order shall have
         remained in force undischarged or unstayed for a period of 60
         consecutive days; or

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

                  (v) the Master Servicer shall admit in writing its inability
         to pay its debts generally as they become due, file a petition to take
         advantage of, or commence a voluntary case under, any applicable
         insolvency or reorganization statute, make an assignment for the


                                       109

<PAGE>



         benefit of its creditors, or voluntarily suspend payment of its
         obligations; or

                  (vi) the Master Servicer shall fail to reimburse in full the
         Trustee not later than 6:00 P.M., New York time on the Business Day
         following the related Distribution Date Date any Advance made by the
         Trustee pursuant to Section 4.01(b) together with accrued and unpaid
         interest.

                  If an Event of Default shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been remedied,
the Trustee shall, but only at the direction of the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates,
by notice in writing to the Master Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof, other than
its rights as a Certificateholder hereunder. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer hereunder, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee. The Trustee shall thereupon make any
Advance described in Section 4.01 hereof subject to Section 3.04 hereof. The
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Master Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Master Servicer
to pay amounts owed pursuant to Article VIII. The Master Servicer agrees to
cooperate with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be credited
to the Certificate Account, or thereafter be received with respect to the
Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of the
occurrence of an Event of Default.

                  Notwithstanding any termination of the activities of a Master
Servicer hereunder, such Master Servicer shall be entitled to receive, out of
any late collection of a Scheduled Payment on a Mortgage Loan that was due prior
to the notice terminating such Master Servicer's rights and obligations as
Master Servicer hereunder and received after such notice, that portion thereof
to which such Master Servicer would have been entitled pursuant to Sections
3.08(a)(i) through (viii), and any other amounts payable to such Master Servicer
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.

         Section 7.02      TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

                  On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating


                                       110

<PAGE>



thereto placed on the Master Servicer by the terms and provisions hereof and
applicable law including the obligation to make advances pursuant to Section
4.01. As compensation therefor, the Trustee shall be entitled to all fees, costs
and expenses relating to the Mortgage Loans that the Master Servicer would have
been entitled to if the Master Servicer had continued to act hereunder.
Notwithstanding the foregoing, if the Trustee has become the successor to the
Master Servicer in accordance with Section 7.01 hereof, 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 Section 4.01 hereof 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 Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder. Any successor Master Servicer shall 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 that is willing
to service the Mortgage Loans and executes and delivers 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 Master Servicer (other than liabilities of
the Master Servicer under Section 6.03 hereof incurred prior to termination of
the Master Servicer under Section 7.01), with like effect as if originally named
as a party to this Agreement; and provided further that each Rating Agency
acknowledges 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. No appointment of a successor to the Master
Servicer hereunder shall be effective until the Trustee shall have consented
thereto, and written notice of such proposed appointment shall have been
provided by the Trustee to each Certificateholder. 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 Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so acting,
shall, subject to Section 3.04 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 as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted the Master 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 Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.

                  Any successor to the Master Servicer as servicer shall give
notice to the Mortgagors of such change of servicer and shall, during the term
of its service as servicer maintain in force the policy or policies that the
Master Servicer is required to maintain pursuant to Section 6.05.

                  In connection with the termination or resignation of the
Master Servicer hereunder,


                                       111

<PAGE>



either (i) the successor Master Servicer, including the Trustee if the Trustee
is acting as successor Master Servicer, shall represent and warrant that it is a
member of MERS in good standing and shall agree to 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, or (ii) the predecessor
Master Servicer shall cooperate with the successor Master Servicer in causing
MERS to execute and deliver an assignment of Mortgage in recordable form to
transfer the Mortgage from MERS to the Trustee and to execute and deliver such
other notices, documents and other instruments as may be necessary or desirable
to effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS(R) System to the successor Master Servicer. The predecessor Master
Servicer shall file or cause to be filed any such assignment in the appropriate
recording office. The successor Master Servicer shall cause such assignment to
be delivered to the Trustee or the Custodian promptly upon receipt of the
original with evidence of recording thereon or a copy certified by the public
recording office in which such assignment was recorded.

         Section 7.03      NOTIFICATION TO CERTIFICATEHOLDERS.

                  (a) Upon any termination of or appointment of a successor to
the Master 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 Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.



                                       112

<PAGE>



                                  ARTICLE VIII.

                             CONCERNING THE TRUSTEE

         Section 8.01      DUTIES OF TRUSTEE.

                  The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they conform
to the requirements of this Agreement, to the extent provided in this Agreement.
If any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Trustee shall take action as it deems
appropriate to have the instrument corrected.

                  No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:

                  (i) prior to the occurrence of an Event of Default, and after
         the curing of all such Events of Default that may have occurred, the
         duties and obligations of the Trustee shall be determined solely by the
         express provisions of this Agreement, the Trustee shall not be liable,
         individually or as Trustee, except for the performance of such 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 the Trustee may conclusively rely, 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 that it reasonably
         believed in good faith to be genuine and to have been duly executed by
         the proper authorities respecting any matters arising hereunder;

                  (ii) the Trustee shall not be liable, individually or as
         Trustee, for an error of judgment made in good faith by a Responsible
         Officer or Responsible Officers of the Trustee, unless the Trustee was
         grossly negligent or acted in bad faith or with willful misfeasance;

                  (iii) the Trustee shall not be liable, individually or as
         Trustee, with respect to any action taken, suffered or omitted to be
         taken by it in good faith in accordance with the


                                       113

<PAGE>



         direction of Holders of each Class of Certificates evidencing not less
         than 25% of the Voting Rights of such Class relating to the time,
         method and place of conducting any proceeding for any remedy available
         to the Trustee, or exercising any trust or power conferred upon the
         Trustee under this Agreement; and

                  (iv) without in any way limiting the provisions of this
         Section 8.01 or Section 8.02 hereof, the Trustee shall be entitled to
         rely conclusively on the information delivered to it by the Master
         Servicer in a Trustee Advance Notice in determining whether or not it
         is required to make an Advance under Section 4.01(b), shall have no
         responsibility to ascertain or confirm any information contained in any
         Trustee Advance Notice, and shall have no obligation to make any
         Advance under Section 4.01(b) in the absence of a Trustee Advance
         Notice or actual knowledge of a Responsible Officer of the Trustee that
         (A) such Advance was not made by the Master Servicer and (B) that such
         Advance is not a Nonrecoverable Advance.

         Section 8.02      CERTAIN MATTERS AFFECTING THE TRUSTEE.

                  (a) Except as otherwise provided in Section 8.01:

                  (i) the Trustee may request and rely upon and shall be
         protected in acting or refraining from acting upon any resolution,
         Officer's Certificate, certificate 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;

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

                  (iii) the Trustee shall not be liable, individually or as
         Trustee, 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;

                  (iv) prior to the occurrence of an Event of Default hereunder
         and after the curing of all Events of Default that may have occurred,
         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 so to do
         by Holders of each Class of Certificates evidencing not less than 25%
         of the Voting Rights of such Class;

                  (v) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents, accountants or attorneys;



                                       114

<PAGE>



                  (vi) the Trustee shall not be required to expend its own funds
         or otherwise incur any financial liability in the performance of any of
         its duties hereunder if it shall have reasonable grounds for believing
         that repayment of such funds or adequate indemnity against such
         liability is not assured to it;

                  (vii) the Trustee shall not be liable, individually or as
         Trustee, for any loss on any investment of funds pursuant to this
         Agreement (other than in its commercial capacity as issuer of the
         investment security);

                  (viii) the Trustee shall not be deemed to have knowledge of an
         Event of Default until a Responsible Officer of the Trustee shall have
         received written notice thereof; and

                  (ix) the Trustee shall be under no obligation to exercise any
         of the trusts or powers vested in it by this Agreement or to make any
         investigation of matters arising hereunder 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 against the
         costs, expenses and liabilities that may be incurred therein or
         thereby.

                  (b) All rights of action under this Agreement or under any of
         the Certificates, enforceable by the Trustee, may be enforced by the
         Trustee without the possession of any of the Certificates, or the
         production thereof at the trial or other proceeding relating thereto,
         and any such suit, action or proceeding instituted by the Trustee shall
         be brought in its name for the benefit of all the Holders of the
         Certificates, subject to the provisions of this Agreement.

         Section 8.03      TRUSTEE NOT LIABLE FOR MORTGAGE LOANS.

                  The recitals contained herein shall be taken as the statements
of the Depositor or the Master Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Trustee's execution and authentication of the Certificates.
The Trustee shall not be accountable for the use or application by the Depositor
or the Master Servicer of any funds paid to the Depositor or the Master Servicer
in respect of the Mortgage Loans or deposited in or withdrawn from the
Certificate Account by the Depositor or the Master Servicer.

         Section 8.04      TRUSTEE MAY OWN CERTIFICATES.

                  The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.

         Section 8.05      MASTER SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES.


                                       115

<PAGE>




                  The Master Servicer covenants and agrees to pay or reimburse
the Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or expense
(i) incurred in connection with any legal action relating to this Agreement or
the Certificates, or in connection with the performance of any of the Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or by reason of reckless disregard of the Trustee's
obligations and duties hereunder and (ii) resulting from any error in any tax or
information return prepared by the Master Servicer. Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the Trustee
hereunder.

         Section 8.06      ELIGIBILITY REQUIREMENTS FOR TRUSTEE.

                  The Trustee hereunder shall, at all times, be a corporation or
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 of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
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 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Seller and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.

         Section 8.07      RESIGNATION AND REMOVAL OF TRUSTEE.



                                       116

<PAGE>



                  The Trustee may at any time resign and be discharged from the
trusts hereby created by (1) giving written notice of resignation to the
Depositor and the Master Servicer and by mailing notice of resignation by first
class mail, postage prepaid, to the Certificateholders at their addresses
appearing on the Certificate Register and each Rating Agency, not less than 60
days before the date specified in such notice when, subject to Section 8.08,
such resignation is to take effect, and (2) acceptance of appointment by a
successor trustee in accordance with Section 8.08 and meeting the qualifications
set forth in Section 8.06. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning 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 8.06 hereof and shall fail to resign
after written request thereto by the Depositor, (ii) 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 or the Master
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Master Servicer and one
copy of which shall be delivered to 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 triplicate, 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 Master
Servicer one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
each Rating Agency by the Successor Trustee.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.

         Section 8.08      SUCCESSOR TRUSTEE.

                  Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor, its predecessor
trustee and the Master Servicer 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


                                       117

<PAGE>



predecessor hereunder, with the like effect as if originally named as trustee
herein.

                  No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 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 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates. If the Depositor fails
to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.

         Section 8.09      MERGER OR CONSOLIDATION OF TRUSTEE.

                  Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.06 hereof 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 8.10      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 Master Servicer and the Trustee acting jointly 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 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 8.08.

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


                                       118

<PAGE>



                  (i) All rights, powers, duties and obligations conferred or
         imposed upon the Trustee, except for the obligation of the Trustee
         under this Agreement to advance funds on behalf of the Master 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 as Trustee
         hereunder or as successor to the Master 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 VIII. 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 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 Master Servicer and the Depositor.

                  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 8.11      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 of REMIC I and
REMIC II will qualify 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 and
that in such capacity it shall: (a) prepare


                                       119

<PAGE>



and file, or cause to be prepared and filed, in a timely manner, a 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 REMIC created hereunder 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) 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) make or cause to be made elections, on behalf of each REMIC
created hereunder to be treated as a REMIC on the federal tax return of each
such REMIC for its first taxable year (and, if necessary, under applicable state
law); (d) 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) provide information necessary for the computation of tax imposed
on the transfer of a Class A-R Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-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) to the extent that they are under its 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 created hereunder as a REMIC under the REMIC
Provisions; (g) 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
created hereunder; (h) pay, from the sources specified in the last paragraph of
this Section 8.11, the amount of any federal, state and local taxes, including
prohibited transaction taxes as described below, imposed on any REMIC created
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) sign or cause to
be signed federal, state or local income tax or information returns; (j)
maintain records relating to each REMIC created hereunder, including but not
limited to the income, expenses, assets and liabilities of each such REMIC, and
the fair market value 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; and (k) as and when
necessary and appropriate, 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 created hereunder, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations


                                       120

<PAGE>



relating to any tax item of the Trust Fund, and otherwise act on behalf of any
REMIC created 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, omissions 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 the Trust Fund 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 the Trust Fund after the
startup day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, including, without limitation, any federal, state or local tax or
minimum tax imposed upon the Trust Fund pursuant to Sections 23153 and 24872 of
the California Revenue and Taxation Code if 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 Agreement, (ii) (x) the Master Servicer, in the case of any such minimum
tax, and (y) 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 here 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 Class A-R Certificateholders , and second
with amounts otherwise to be distributed to all other Certificateholders in the
following order of priority: first, to the Class B Certificates (pro rata),
second, to the Class M-5 Certificates (pro rata), third, to the Class M-4
Certificates (pro rata), fourth, to the Class M-3 Certificates (pro rata),
fifth, to the Class M-2 Certificates (pro rata), sixth, to the Class M-1
Certificates (pro rata), and seventh, to the Class A-1 Certificates (pro rata).
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Class A-R Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holders of the Class A-R
Certificates (and, if necessary, second, from the Holders of the all 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 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.

                  The Trustee shall treat the rights of the Class A-1, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class B Certificateholders
to receive payments from the Carryover Reserve Fund as rights in an interest
rate corridor contract written by the Corridor Contract


                                       121

<PAGE>



Counterparty with respect to the Net Rate Carryover funded by the Corridor
Contract and Excess Cashflow, in favor of the Certificateholders (other than the
Holders of the Class A-R, Class C and Class P Certificates). Thus, each
Certificate (other than the Class A-R, Class C and Class P Certificates) shall
be treated as representing ownership of not only REMIC II Regular Interests, but
also ownership of an interest in an interest rate corridor contract. For
purposes of determining the issue price of the REMIC II Regular Interests, the
Trustee shall assume that the interest rate corridor contract has a value of
$720,000.



                                       122

<PAGE>



                                   ARTICLE IX.

                                   TERMINATION

         Section 9.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL MORTGAGE
                      LOANS.

                  Subject to Section 9.03, the Trust Fund shall terminate and
the obligations and responsibilities of the Depositor, the Master Servicer, the
Seller and the Trustee created hereby shall terminate upon the earlier of (a)
the purchase by the Master Servicer of all of the Mortgage Loans (and REO
Properties) remaining in the Trust Fund at the price equal to the sum of (i)
100% of the Stated Principal Balance of each Mortgage Loan plus one month's
accrued interest thereon at the applicable Mortgage Rate less the Servicing Fee
Rate, (ii) the lesser of (x) the appraised value of any REO Property as
determined by the higher of two appraisals completed by two independent
appraisers selected by the Master Servicer at the expense of the Master Servicer
and (y) the Stated Principal Balance of each Mortgage Loan related to any REO
Property and (iii) any remaining unpaid costs and damages incurred by the Trust
Fund that arises out of a violation of any predatory or abusive lending law that
also constitutes an actual breach of representation (xxxiv) of Section 2.03
hereof 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. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James', living on the date hereof and (ii) the Latest Possible
Maturity Date.

         The right to purchase all Mortgage Loans and REO Properties by the
Master Servicer (the party exercising such purchase option, the "Terminator")
pursuant to clause (a) above shall be conditioned upon the Stated Principal
Balance of the Mortgage Loans at the time of any such repurchase, aggregating
ten percent (10%) or less of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.

         Section 9.02      FINAL DISTRIBUTION ON THE CERTIFICATES.

                  If on any Determination Date, (i) the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other funds or
assets in the Trust Fund other than the funds in the Certificate Account, the
Master Servicer shall direct the Trustee to send a final distribution notice
promptly to each 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 related 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 Corporate Trust Office of the Trustee. If the Master
Servicer elects to terminate the Trust Fund pursuant to clause (a) of Section


                                       123

<PAGE>



9.01, at least 5 days prior to the date notice is to be mailed to the
Certificateholders, such electing party shall notify the Depositor and the
Trustee of the date such electing party intends to terminate the Trust Fund and
of the applicable repurchase price of the related Mortgage Loans and REO
Properties.

                  Notice of any termination of the Trust Fund, specifying the
Distribution Date on which related Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to related 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 related
Certificates will be made upon presentation and surrender of such 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 such Certificates at the office therein specified.
The Master Servicer will give such notice to each Rating Agency at the time such
notice is given to the affected Certificateholders.

                  In the event such notice is given, the Master Servicer shall
cause all funds in the Certificate Account to be remitted to the Trustee for
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
related Certificates. Upon such final deposit and the receipt by the Trustee of
a Request for Release therefor, the Trustee shall promptly release to the Master
Servicer the Mortgage Files for the related Mortgage Loans.

                  Upon presentation and surrender of the related Certificates,
the Trustee shall cause to be distributed to Certificateholders of each affected
Class the amounts allocable to such Certificates held in the Distribution
Account (and, if applicable, the Carryover Reserve Fund) in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.

                  In the event that any affected Certificateholders shall not
surrender related 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 Certificateholders to surrender their related
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 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 one year after the second
notice all related Certificates shall not have been surrendered for
cancellation, the Class A-R Certificates shall be entitled to all unclaimed
funds and other assets that remain subject hereto.



                                       124

<PAGE>



         Section 9.03      ADDITIONAL TERMINATION REQUIREMENTS.

                  (a) In the event the Master Servicer exercises its purchase
option on the Mortgage Loans, the Trust Fund shall be terminated in accordance
with the following additional requirements, unless the Trustee has been supplied
with an Opinion of Counsel, at the expense of the Master Servicer, to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of a REMIC, or (ii) cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding:

                  (1) The Master Servicer shall establish a 90-day liquidation
period and notify the Trustee thereof, which shall in turn specify the first day
of such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer shall
prepare a plan of complete liquidation and shall otherwise 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 Master Servicer;

                  (2) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Master Servicer as
agent of the Trustee shall sell all of the assets of the Trust Fund 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 Class A-R Certificateholders all cash on hand (other than
cash retained to meet claims) related to such Class of Certificates, and the
Trust Fund shall terminate at that time.

                  (b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Master Servicer to specify the 90-day liquidation
period for the Trust Fund, which authorization shall be binding upon all
successor Certificateholders.

                  (c) The Trustee as agent for each REMIC created hereunder
hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of the Master Servicer, and, together with the holders of the
Class A-R Certificates, agree to take such other action in connection therewith
as may be reasonably requested by the Master Servicer.



                                       125

<PAGE>



                                   ARTICLE X.

                            MISCELLANEOUS PROVISIONS

         Section 10.01     AMENDMENT.

                  This Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Seller and the Trustee, without the consent
of any of the Certificateholders to cure any ambiguity, to correct or supplement
any provisions herein, 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 or to give effect to the expectations of the investors
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, it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. Any amendment described above, made solely to conform
this Agreement to the Prospectus Supplement shall be deemed not to adversely
affect in any material respect the interests of the Certificateholders.
Notwithstanding the foregoing, no amendment that significantly changes the
permitted activities of the trust created by this Agreement may be made without
the consent of Certificateholders representing not less than 51% of the Voting
Rights of each Class of Certificates affected by such amendment.

                  The Trustee, the Depositor, the Master Servicer and the Seller
may also at any time and from time to time amend this Agreement, without the
consent of the Certificateholders, to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or appropriate to maintain the
qualification of the Trust Fund as a REMIC under the Code or to avoid or
minimize the risk of the imposition of any tax on the Trust Fund pursuant to the
Code that would be a claim against the Trust Fund at any time prior to the final
redemption of the Certificates, provided that the Trustee have 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, 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
Depositor, the Master Servicer, the Seller and the Trustee and the Holders of
each Class of Certificates adversely affected thereby evidencing not less than a
majority Percentage Interest of the Voting Rights of such Class 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 pursuant to this
paragraph shall (i) reduce in any manner the amount of, or delay the timing of,
payments required to be distributed on any Certificate without the


                                       126

<PAGE>



consent of the Holder of such Certificate, (ii) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner
other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing 66% or more of the Voting Rights of such
Class, or (iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment without the consent of the
Holders of all such Certificates 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 cause the imposition of
any tax on the Trust Fund or the Certificateholders or cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding.

                  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.

                  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 that all requirements for amending this Agreement have been
complied with; and (ii) either (A) the amendment does not adversely affect in
any material respect the interests of any Certificateholder or (B) the
conclusion set forth in the immediately preceding clause (A) is not required to
be reached pursuant to this Section 10.01.

         Section 10.02     RECORDATION OF AGREEMENT; COUNTERPARTS.

                  This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.

                  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.



                                       127

<PAGE>



         Section 10.03     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 10.04     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 and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Depositor to the Trustee be, and be construed as, an absolute sale
thereof to the Trustee. It is, further, not the intention of the parties that
such conveyance be deemed a pledge thereof by the Depositor to the Trustee.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, 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) with respect to
all such assets and security interests and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant pursuant to the
terms of this Agreement by the Depositor to the Trustee, 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. The Depositor
shall arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.

         Section 10.05     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 Event of Default that has not been
         cured;


                                       128

<PAGE>




                  (iii) The resignation or termination of the Master Servicer or
         the Trustee and the appointment of any successor;

                  (iv) The repurchase or substitution of Mortgage Loans pursuant
         to Sections 2.02, 2.03, 2.04 and 3.12; and

                  (v) 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
         4.05;

                  (ii) Each annual statement as to compliance described in
         Section 3.17; and

                  (iii) Each annual independent public accountants' servicing
         report described in Section 3.18.

                  (b) All directions, demands and notices hereunder shall be in
         writing and shall be deemed to have been duly given when sent by
         facsimile transmission, first class mail or delivered to (i) in the
         case of the Depositor, CWABS, Inc., 4500 Park Granada, Calabasas,
         California 91302, Attention: Josh Adler, with a copy to the same
         address, Attention: Legal Department; (ii) in the case of the Seller,
         Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas, California
         91302, Attention: Josh Adler, with a copy to the same address,
         Attention: Legal Department, or such other address as may be hereafter
         furnished to the Depositor and the Trustee by the Master Servicer in
         writing; (iii) in the case of the Master Servicer, Countrywide Home
         Loans Servicing LP, 400 Countrywide Way, Simi Valley, California 93065,
         Attention: Mark Wong or such other address as may be hereafter
         furnished to the Depositor and the Trustee by the Master Servicer in
         writing; (iv) in the case of the Trustee, The Bank of New York, 101
         Barclay Street, New York, New York 10286 Attention: Corporate Trust MBS
         Administration, CWABS, Series 2004-BC1, or such other address as the
         Trustee may hereafter furnish to the Depositor or the Master Servicer;
         and (v) in the case of the Rating Agencies, (x) Moody's Investors
         Service, Inc., Residential Mortgage Monitoring Department, 99 Church
         Street, New York, New York 10007, and (y) Standard & Poor's Ratings
         Services, a division of The McGraw-Hill Companies, Inc., Attention:
         Mortgage Surveillance Group, 25 Broadway, 12th Floor, New York, New
         York 10004. Notices to Certificateholders shall be deemed given when
         mailed, first class postage prepaid, to their respective addresses
         appearing in the Certificate Register.

         Section 10.06     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,


                                       129

<PAGE>



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 10.07     ASSIGNMENT.

                  Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 6.02, this Agreement may not be assigned
by the Master Servicer without the prior written consent of the Trustee and the
Depositor.

         Section 10.08     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.

                  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 an Event of 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 reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, 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 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at


                                       130

<PAGE>



law or in equity.

         Section 10.09     INSPECTION AND AUDIT RIGHTS.

                  The Master Servicer agrees that, on reasonable prior notice,
it will permit any representative of the Depositor, the Seller or the Trustee
during the Master Servicer's normal business hours, to examine all the books of
account, records, reports and other papers of the Master Servicer relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor, the Seller or the Trustee and to discuss its affairs, finances and
accounts relating to the Mortgage Loans with its officers, employees and
independent public accountants (and by this provision the Master Servicer hereby
authorizes such accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of- pocket expense incident to the exercise by the
Depositor, the Seller or the Trustee of any right under this Section 10.09 shall
be borne by the party requesting such inspection; all other such expenses shall
be borne by the Master Servicer.

         Section 10.10     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.


                                   *    *    *






                                       131

<PAGE>



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

                                         CWABS, INC.,
                                           as Depositor
                                         By:   /s/ Ruben Avilez
                                               ---------------------------------
                                               Name: Ruben Avilez
                                               Title:   Vice President


                                         COUNTRYWIDE HOME LOANS, INC.,
                                           as Seller
                                         By:   /s/ Michael Schloessmann
                                               ---------------------------------
                                               Name:  Michael Schloessmann
                                               Title: Vice President



                                         COUNTRYWIDE HOME LOANS
                                           SERVICING LP,
                                           as Master Servicer

                                         By:  COUNTRYWIDE GP, INC.
                                         By:   /s/ Ruben Avilez
                                               ---------------------------------
                                               Name:  Ruben Avilez
                                               Title: Vice President


                                         THE BANK OF NEW YORK,
                                           not in its individual capacity,
                                           but solely as Trustee
                                         By:   /s/ Maria Tokarz
                                               Name:  Maria Tokarz
                                               ---------------------------------
                                               Title: Assistant Treasurer



                                       132

<PAGE>






THE BANK OF NEW YORK, (solely with respect to its obligations under to Section
4.01(b))

                                         By:   /s/ Paul Connolly
                                               ---------------------------------
                                               Name:  Paul Connolly
                                               Title: Vice President



                                       133

<PAGE>



STATE OF CALIFORNIA     )
                        )        ss.:
COUNTY OF LOS ANGELES   )

                  On this 31st day of March, 2004, before me, a notary public in
and for said State, appeared Michael Schloessmann, personally known to me on the
basis of satisfactory evidence to be a Vice President of Countrywide Home Loans,
Inc., 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]


                                       134

<PAGE>



STATE OF CALIFORNIA        )
                           )        ss.:
COUNTY OF LOS ANGELES      )

                  On this 31st day of March, 2004, before me, a notary public in
and for said State, appeared Ruben Avilez, personally known to me on the basis
of satisfactory evidence to be a Vice President of Countrywide GP, Inc., the
general partner of Countrywide Home Loans Servicing LP, one of the organizations
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]


                                       135

<PAGE>



STATE OF CALIFORNIA    )
                       )        ss.:
COUNTY OF LOS ANGELES  )

                  On this 31st day of March, 2004, before me, a notary public in
and for said State, appeared Ruben Avilez, personally known to me on the basis
of satisfactory evidence to be a Vice President of CWABS, Inc., 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]


                                       138

<PAGE>


STATE OF NEW YORK      )
                       )       ss.:
COUNTY OF NEW YORK     )

                  On this 31st day of March, 2004, before me, a notary public in
and for said State, appeared _______________, personally known to me on the
basis of satisfactory evidence to be a __________________ of The Bank of New
York, a New York banking corporation 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]


                                       140




<PAGE>


                                                                     Exhibit A-1


                           Exhibit A-1 is a photocopy
                         of the Class A-1 Certificate as
                                   delivered.

                [See appropriate documents delivered at closing]











                                      A-1

<PAGE>


                                                                     Exhibit A-2


                           Exhibit A-2 is a photocopy
                          of the Class A-2 Certificate
                                  as delivered.

                [See appropriate documents delivered at closing.]











                                      A-2

<PAGE>


                                                                     Exhibit A-3


                           Exhibit A-3 is a photocopy
                         of the Class M-1 Certificate as
                                   delivered.

                [See appropriate documents delivered at closing]










                                      A-3

<PAGE>


                                                                     Exhibit A-4



                           Exhibit A-4 is a photocopy
                          of the Class M-2 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]











                                      A-4

<PAGE>


                                                                     Exhibit A-5


                           Exhibit A-5 is a photocopy
                          of the Class M-3 Certificate
                                  as delivered.


                [See appropriate documents delivered at closing]












                                      A-5
<PAGE>



                                                                     Exhibit A-6



                           Exhibit A-6 is a photocopy
                          of the Class M-4 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]








                                      A-6
<PAGE>



                                                                     Exhibit A-7


                           Exhibit A-7 is a photocopy
                          of the Class M-5 Certificate
                                  as delivered.


                [See appropriate documents delivered at closing]






                                      A-7
<PAGE>



                                                                     Exhibit A-8



                           Exhibit A-8 is a photocopy
                           of the Class B Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]







                                      A-8
<PAGE>




                                                                     Exhibit A-9
                           Exhibit A-9 is a photocopy
                           of the Class B Certificate
                                  as delivered.


                [See appropriate documents delivered at closing]












                                      A-9
<PAGE>


                                                                       Exhibit B


                            Exhibit B is a photocopy
                           of the Class C Certificate
                                  as delivered.


                [See appropriate documents delivered at closing]














                                       B-1

<PAGE>


                                                                       Exhibit C


                            Exhibit C is a photocopy
                           of the Class P Certificate
                                  as delivered.


                [See appropriate documents delivered at closing]













                                       C-1
<PAGE>


                                                                     Exhibit D-1


                           Exhibit D-1 is a photocopy
                          of the Class A-R Certificate
                                  as delivered.


                [See appropriate documents delivered at closing]















                                       D-1
<PAGE>


                                                                       Exhibit E


                            Exhibit E is a photocopy
                      of the Tax Matters Person Certificate
                                  as delivered.


                [See appropriate documents delivered at closing]













                                       E-1
<PAGE>


                                                             Exhibit F-1 and F-2


               Exhibit F-1 and F-2 are schedules of Mortgage Loans


         [Delivered to Trustee at closing and on file with the Trustee]









                                   F-1 and F-2

<PAGE>


                                   EXHIBIT G-1

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE

                                       [Date]


[Depositor]

[Seller]

[Master Servicer]



              Re:  Pooling and Servicing Agreement dated as of March 1,
                   2004 among CWABS, Inc., as Depositor, Countrywide Home
                   Loans, Inc., as Seller, Countrywide Home Loans
                   Servicing LP, as Master Servicer and The Bank of New
                   York, as Trustee, relating to the Asset-Backed
                   Certificates, Series 2004-BC1
                   ------------------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee (the "Trustee"), hereby
certifies that as to each Mortgage Loan listed in 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
are in its possession; (ii) such documents have been reviewed by it and appear
regular on their face and relate to such Mortgage Loan; and (iii) based on
examination by it, and only as to such documents, the information set forth in
items (i), (ii), (iii) and (iv) of the definition or description of "Mortgage
Loan Schedule" is correct.

         The Trustee 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 Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan, or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.



                                      G-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.

                                               The Bank of New York,
                                                 as Trustee


                                               By:_____________________________
                                                  Name:
                                                  Title:



                                     G-1-2

<PAGE>


                                                    EXHIBIT G-2

                                     FORM OF INTERIM CERTIFICATION OF TRUSTEE

                                                      [Date]


[Depositor]

[Seller]

[Master Servicer]



              Re:  Pooling and Servicing Agreement dated as of March 1,
                   2004 among CWABS, Inc., as Depositor, Countrywide Home
                   Loans, Inc., as Seller, Countrywide Home Loans
                   Servicing LP, as Master Servicer and The Bank of New
                   York, as Trustee, relating to the Asset-Backed
                   Certificates, Series 2004-BC1
                   ------------------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as listed in the following paragraph, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached list of exceptions) the Trustee has received:

         (i)      the original Mortgage Note, endorsed by the Seller or the
                  originator of such Mortgage Loan, without recourse in the
                  following form: "Pay to the order of _______________ without
                  recourse", with all intervening endorsements that show a
                  complete chain of endorsement from the originator to the
                  Seller, or, if the original Mortgage Note has been lost or
                  destroyed and not replaced, an original lost note affidavit
                  from the Seller, stating that the original Mortgage Note was
                  lost or destroyed, together with a copy of the related
                  Mortgage Note;

         (ii)     in the case of each Mortgage Loan that is not a MERS Mortgage
                  Loan, the original recorded Mortgage[, and in the case of each
                  Mortgage Loan that is a MERS Mortgage Loan, the original
                  Mortgage, noting thereon the presence of the MIN of the
                  Mortgage Loan and language indicating that the Mortgage Loan
                  is a MOM Loan if the Mortgage Loan is a MOM Loan, with
                  evidence of recording indicated thereon, or a copy of the
                  Mortgage certified by the public recording office in which
                  such Mortgage has been recorded;

         (iii)    in the case of each Mortgage Loan that is not a MERS Mortgage
                  Loan, a duly executed assignment of the Mortgage to
                  "Asset-Backed Certificates, Series 2004-



                                      G-2-1

<PAGE>



                  BC1, CWABS, Inc., by The Bank of New York, a New York banking
                  corporation, as trustee under the Pooling and Servicing
                  Agreement dated as of March 1, 2004, without recourse", or, in
                  the case of each Mortgage Loan with respect to property
                  located in the State of California that is not a MERS Mortgage
                  Loan, a duly executed assignment of the Mortgage in blank
                  (each such assignment, when duly and validly completed, to be
                  in recordable form and sufficient to effect the assignment of
                  and transfer to the assignee thereof, under the Mortgage to
                  which such assignment relates);

         (iv)     the original recorded assignment or assignments of the
                  Mortgage together with all interim recorded assignments of
                  such Mortgage [(noting the presence of a MIN in the case of
                  each MERS Mortgage Loan)];

         (v)      the original or copies of each assumption, modification,
                  written assurance or substitution agreement, if any, with
                  evidence of recording thereon if recordation thereof is
                  permissible under applicable law; and

         (vi)     the original or duplicate original lender's title policy or a
                  printout of the electronic equivalent and all riders thereto
                  or, in the event such original title policy has not been
                  received from the insurer, any one of an original title
                  binder, an original preliminary title report or an original
                  title commitment, or a copy thereof certified by the title
                  company, with the original policy of title insurance to be
                  delivered within one year of the Closing Date.

         In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Mortgage Loan, as the case may be, to be a true and complete copy of the
original Mortgage or assignment of Mortgage submitted for recording.

         Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xi) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.

         The Trustee 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 Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.


                                      G-2-2
<PAGE>


         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                               The Bank of New York,
                                                    as Trustee


                                               By:_____________________________
                                                    Name:
                                                    Title:




                                      G-2-3
<PAGE>


                                   EXHIBIT G-3



                      FORM OF DELAY DELIVERY CERTIFICATION

                                     [Date]

[Depositor]

[Seller]

[Master Servicer]

               Re:  Pooling and Servicing Agreement dated as of March 1,
                    2004 (the "Pooling and Servicing Agreement") among
                    CWABS, Inc., as Depositor, Countrywide Home Loans,
                    Inc., as Seller, Countrywide Home Loans Servicing LP,
                    as Master Servicer and The Bank of New York, as
                    Trustee, relating to the Asset-Backed Certificates,
                    Series 2004-BC1
                    -----------------------------------------------------

Gentlemen:

         Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement. The
undersigned hereby certifies that as to each Delay Delivery Mortgage Loan listed
on the Schedule A attached hereto (other than any Mortgage Loan paid in full or
listed on Schedule B attached hereto) the Trustee has received:

                  the original Mortgage Note, endorsed by the Seller or the
         originator of such Mortgage Loan, without recourse in the following
         form: "Pay to the order of _______________ without recourse", with all
         intervening endorsements that show a complete chain of endorsement from
         the originator to the Seller, or, if the original Mortgage Note has
         been lost or destroyed and not replaced, an original lost note
         affidavit from the Seller, stating that the original Mortgage Note was
         lost or destroyed, together with a copy of the related Mortgage Note;

                  in the case of each Mortgage Loan that is not a MERS Mortgage
         Loan, a duly executed assignment of the Mortgage to "Asset-Backed
         Certificates, Series 2004-BC1, CWABS, Inc., by The Bank of New York, a
         New York banking corporation, as trustee under the Pooling and
         Servicing Agreement dated as of March 1, 2004, without recourse", or,
         in the case of each Mortgage Loan with respect to property located in
         the State of California that is not a MERS Mortgage Loan, a duly
         executed assignment of the Mortgage in blank (each such assignment,
         when duly and validly completed, to be in



                                      G-3-1
<PAGE>


         recordable form and sufficient to effect the assignment of and transfer
         to the assignee thereof, under the Mortgage to which such assignment
         relates).

         Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.

         The Trustee 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 Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.


                                               THE BANK OF NEW YORK,
                                               as Trustee



                                               By:______________________
                                               Name:
                                               Title:



                                      G-3-2
<PAGE>



                                   EXHIBIT G-4

                                   [RESERVED]







                                       G-4

<PAGE>



                                    EXHIBIT H


                     FORM OF FINAL CERTIFICATION OF TRUSTEE

                                     [Date]


[Depositor]

[Master Servicer]

[Seller]



Re:  Pooling and Servicing Agreement dated as of March 1, 2004 (the "Pooling and
     Servicing Agreement") among CWABS, Inc., as Depositor, Countrywide Home
     Loans, Inc., as Seller, Countrywide Home Loans Servicing LP, as Master
     Servicer and The Bank of New York, as Trustee, relating to the Asset-Backed
     Certificates, Series 2004-BC1_______
     ---------------------------------------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attached Document Exception Report) the
Trustee has received:

         (i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost or destroyed and not
replaced, an original lost note affidavit from the Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;

         (ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, and in the case of each Mortgage Loan that
is a MERS Mortgage Loan, the original Mortgage, noting thereon the presence of
the MIN of the Mortgage Loan and language indicating that the Mortgage Loan is a
MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;

         (iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed Certificates,
Series 2004-BC1, CWABS, Inc., by The Bank of New York, a New York banking
corporation, as trustee under the Pooling


                                       H-1

<PAGE>


and Servicing Agreement dated as of March 1, 2004, without recourse", or, in the
case of each Mortgage Loan with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage in blank (each such assignment, when duly and validly completed, to be
in recordable form and sufficient to effect the assignment of and transfer to
the assignee thereof, under the Mortgage to which such assignment relates);

         (iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage [(noting the
presence of a MIN in the case of each MERS Mortgage Loan)];

         (v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of recording thereon
if recordation thereof is permissible under applicable law; and

         (vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or any one of an
original title binder, an original preliminary title report or an original title
commitment, or a copy thereof certified by the title company.

         If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.

         Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xiii) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.

         The Trustee 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 Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
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
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.


                                       H-2

<PAGE>


         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                               The Bank of New York,
                                                     as Trustee


                                               By: _____________________________
                                                   Name:
                                                   Title:



                                       H-3
<PAGE>


                                    EXHIBIT I

                               TRANSFER AFFIDAVIT



STATE OF                 )
                         )    ss.:
COUNTY OF                )


         The undersigned, being first duly sworn, deposes and says as follows:

         1. The undersigned is an officer of __________, the proposed transferee
of an Ownership Interest in a Class A-R Certificate (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement, dated as of March 1, 2004 (the
"Agreement"), by and among CWABS, Inc., as depositor (the "Depositor"),
Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans Servicing LP, as
Master Servicer and The Bank of New York, as Trustee. Capitalized terms used,
but not defined herein or in Exhibit 1 hereto, shall have the meanings ascribed
to such terms in the Agreement. The transferee has authorized the undersigned to
make this affidavit on behalf of the transferee.

         2. Either (a) the transferee is not an employee benefit plan that is
subject to Section 406 of ERISA or to section 4975 of the Internal Revenue Code
of 1986, nor is it acting on behalf of or with plan assets of any such plan, or
(b) the transferee has provided the opinion of counsel specified in Section
5.02(b) of the Agreement. The transferee is, as of the date hereof, and will be,
as of the date of the Transfer, a Permitted Transferee. The transferee is
acquiring its Ownership Interest in the Certificate for its own account.

         3. The transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent transferee furnished to such Person an affidavit that
such subsequent transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.

         4. The transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a



                                      I-1
<PAGE>


partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)

         5. The transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the transferee contemplated hereby null and void.

         6. The transferee agrees to require a Transfer Affidavit from any
Person to whom the transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
transferee is acting as nominee, trustee or agent, and the transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the transferee, the
transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit I to the Agreement (a "Transferor Certificate") to the
effect that such transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.

         7. The transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the Class
A-R Certificates.

         8. The transferee's taxpayer identification number is ________________.

         9. The transferee is a U.S. Person as defined in Code section
7701(a)(30).

         10. The transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.

         11. The transferee has provided financial statements or other financial
information requested by the Transferor in connection with the transfer of the
Class A-R Certificates to permit the Transferor to assess the financial
capability of the transferee to pay such taxes.


                                   *    *    *




                                      I-2
<PAGE>



         IN WITNESS WHEREOF, the transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this __th day of _______, 20__.



                                               [NAME OF TRANSFEREE]

                                               By:____________________________
                                               Name:
                                               Title:



[Corporate Seal]

ATTEST:

_________________________
[Assistant] Secretary

         Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the _____________________ of the transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
transferee.

         Subscribed and sworn before me this __th day of _______, 20__.




                                           _____________________________________
                                                       NOTARY PUBLIC

                                           My Commission expires the ___ day of

                                                           , 20__.





                                      I-3
<PAGE>



                                                                       EXHIBIT 1



                               Certain Definitions

         "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.

         "Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, 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
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, 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, or 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 unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund 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 the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.

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

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




                                      I-4
<PAGE>






Section 5.02(c) of the Agreement
--------------------------------

                  (c) Each Person who has or who acquires any Ownership Interest
         in a Class A-R 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 Class A-R Certificate are expressly subject to the following
provisions:

                  (i) Each Person holding or acquiring any Ownership Interest in
         a Class A-R 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 Class A-R Certificate may be
         registered on the Closing Date or thereafter transferred, and the
         Trustee shall not register the Transfer of any Class A-R Certificate
         unless, in addition to the representation letters 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 I.

                  (iii) Each Person holding or acquiring any Ownership Interest
         in a Class A-R 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 Class A-R 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 Class A-R Certificate and (C) not to Transfer its Ownership Interest
         in a Class A-R Certificate or to cause the Transfer of an Ownership
         Interest in a Class A-R 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 Class A-R Certificate in violation of the provisions of
         this Section 5.02(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 Class A-R Certificate in violation of the
         provisions of this Section 5.02(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 Class A-R
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Class A-R Certificate that is in fact
         not permitted by Section 5.02(b) and



                                      I-5
<PAGE>


         Section 5.02(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,
         Transferor Certificate and either the Rule 144A Letter or the
         Investment Letter. The Trustee shall be entitled but not obligated to
         recover from any Holder of a Class A-R 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 Transferee, all
         payments made on such Class A-R 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.

                  (v) The Depositor shall use its best efforts to make
         available, upon receipt of written request from the Trustee, all
         information necessary to compute any tax imposed under Section 860E(e)
         of the Code as a result of a Transfer of an Ownership Interest in a
         Class A-R Certificate to any Holder who is not a Permitted Transferee.

                  The restrictions on Transfers of a Class A-R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class A-R 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 Trust Fund, the Trustee,
the Seller or the Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder 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 Class A-R 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 Class A-R 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 Class A-R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.





                                      I-6
<PAGE>


                                   EXHIBIT J-1

                       FORM OF TRANSFEROR CERTIFICATE FOR
                             CLASS A-R CERTIFICATES

                                                              Date:

CWABS, Inc.,
      as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

               Re:  CWABS, Inc. Asset-Backed
                    Certificates, Series 2004-BC1
                    -----------------------------


Ladies and Gentlemen:

In connection with our disposition of the Class A-R Certificates, we certify
that we have no knowledge the Transferee is not a Permitted Transferee. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of March 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York, as Trustee.

                                         Very truly yours,

                                         _______________________________
                                         Name of Transferor

                                         By: ___________________________
                                               Name:
                                               Title:




                                      J-1-1

<PAGE>


                                   EXHIBIT J-2

                       FORM OF TRANSFEROR CERTIFICATE FOR
                              PRIVATE CERTIFICATES

                                                        Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-BC1, Class [   ]
                           ----------------------------

Ladies and Gentlemen:

         In connection with our disposition of the above-captioned Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of March 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer and The Bank of New
York, as Trustee.

                                              Very truly yours,

                                              __________________________________
                                              Name of Transferor

                                              By: ______________________________
                                                    Name:
                                                    Title:




                                      J-2-1
<PAGE>



                                    EXHIBIT K


                    FORM OF INVESTMENT LETTER (NON-RULE 144A)

                                                            Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-BC1, Class [   ]
                           ----------------------------

Ladies and Gentlemen:

         In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has permitted the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we



                                       K-1
<PAGE>


will at our expense provide an opinion of counsel satisfactory to the addressees
of this Certificate that such sale, transfer or other disposition may be made
pursuant to an exemption from the Act, (2) the purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially the
same effect as this certificate, and (3) the purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling and
Servicing Agreement.

         All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
March 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer and The Bank of
New York, as Trustee.

                                             Very truly yours,

                                             ___________________________________
                                             Name of Transferee

                                             By: _______________________________
                                                   Authorized Officer




                                       K-2

<PAGE>



                                    EXHIBIT L

                            FORM OF RULE 144A LETTER

                                                          Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-BC1, Class [   ]
                           ----------------------------

Ladies and Gentlemen:

         In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has permitted the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement (e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and the purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of



                                      L-1
<PAGE>


the Securities Act or require registration pursuant thereto, nor will act, nor
has authorized or will authorize any person to act, in such manner with respect
to the Certificates, (f) we are a "qualified institutional buyer" as that term
is defined in Rule 144A under the Securities Act and have completed either of
the forms of certification to that effect attached hereto as Annex 1 or Annex 2.
We are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.

         All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
March 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer and The Bank of
New York, as Trustee.




                                      L-2
<PAGE>



                              ANNEX 1 TO EXHIBIT L
                              --------------------


            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]


The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

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

                  2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis either at least $100,000 in securities
or, if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis
at least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.

                  ___    CORPORATION, ETC. The Buyer is a corporation (other
                         than a bank, savings and loan association or similar
                         institution), Massachusetts or similar business trust,
                         partnership, or charitable organization described in
                         Section 501(c)(3) of the Internal Revenue Code of 1986,
                         as amended.

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

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



                                      L-3
<PAGE>


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

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

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

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

                  ___    INVESTMENT ADVISOR. The Buyer is an investment advisor
                         registered under the Investment Advisors Act of 1940.

                  ___    SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small
                         business investment company licensed by the U.S. Small
                         Business Administration under Section 301(c) or (d) of
                         the Small Business Investment Act of 1958.

                  ___    BUSINESS DEVELOPMENT COMPANY. Buyer is a business
                         development company as defined in Section 202(a)(22) of
                         the Investment Advisors Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated



                                      L-4
<PAGE>


subsidiary of another enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934, as amended.

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

                  6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                               _________________________________
                                                      Print Name of Buyer


                                               By: _____________________________
                                               Name:
                                               Title:

                                               Date: ___________________________



                                      L-5
<PAGE>



                                                            ANNEX 2 TO EXHIBIT L
                                                            --------------------


            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That are Registered Investment Companies]


The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

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

                  2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.

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

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

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



                                      L-6
<PAGE>


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

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

                  6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.


                                               _________________________________
                                                Print Name of Buyer or Adviser


                                               By: _____________________________
                                               Name:
                                               Title:


                                               IF AN ADVISER:


                                               _________________________________
                                                      Print Name of Buyer


                                               Date: ___________________________



                                      L-7
<PAGE>


                                    EXHIBIT M

                               REQUEST FOR RELEASE
                                  (for Trustee)

LOAN INFORMATION
         Name of Mortgagor:              _______________________________________

         Master Servicer
         Loan No.:                       _______________________________________

TRUSTEE
         Name:                           _______________________________________

         Address:                        _______________________________________

         Trustee
         Mortgage File No.:              _______________________________________



         The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Asset-Backed Certificates, Series 2004-BC1, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement dated as of March 1, 2004 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, and the
Trustee.

(  )     Mortgage Note dated ___________, ____, in the original principal sum of
         $________, made by __________________, payable to, or endorsed to the
         order of, the Trustee.

(  )     Mortgage recorded on _________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         ________________, State of _______________ in book/reel/docket
         _______________ of official records at page/image _____________.

(  )     Deed of Trust recorded on _________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         ________________, State of _______________ in book/reel/docket
         _______________ of official records at page/image _____________.


                                       M-1
<PAGE>


(  )     Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
         _________________ as instrument no. __________ in the County Recorder's
         Office of the County of __________, State of _______________ in
         book/reel/docket _______________ of official records at page/image
         _____________.

(  )     Other documents, including any amendments, assignments or other
         assumptions of the Mortgage Note or Mortgage.

(  )     ______________________________________________

(  )     ______________________________________________

(  )     ______________________________________________

(  )     ______________________________________________

         The undersigned Master Servicer hereby acknowledges and agrees as
follows:

                  (1) The Master Servicer shall hold and retain possession of
         the Documents in trust for the benefit of the Trust Fund, solely for
         the purposes provided in the Agreement.

                  (2) The Master Servicer shall not cause or knowingly permit
         the Documents to become subject to, or encumbered by, any claim, liens,
         security interest, charges, writs of attachment or other impositions
         nor shall the Master Servicer assert or seek to assert any claims or
         rights of setoff to or against the Documents or any proceeds thereof.

                  (3) The Master Servicer shall return each and every Document
         previously requested from the Mortgage File to the Trustee when the
         need therefor no longer exists, unless the Mortgage Loan relating to
         the Documents has been liquidated and the proceeds thereof have been
         remitted to the Certificate Account and except as expressly provided in
         the Agreement.

                  (4) The Documents and any proceeds thereof, including any
         proceeds of proceeds, coming into the possession or control of the
         Master Servicer shall at all times be earmarked for the account of the
         Trust Fund, and the Master Servicer shall keep the Documents and any
         proceeds separate and distinct from all other property in the Master
         Servicer's possession, custody or control.

                                              [Master Servicer]

                                              By  _____________________________

                                              Its _____________________________

Date: _________________, ____



                                       M-2
<PAGE>


                                    EXHIBIT N

                               REQUEST FOR RELEASE
             [Mortgage Loans Paid in Full, Repurchased or Replaced]

                     OFFICER'S CERTIFICATE AND TRUST RECEIPT
                           ASSET-BACKED CERTIFICATES,
                                 Series 2004-BC1



__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]

LOAN NUMBER:_______________                 BORROWER'S NAME:_____________

COUNTY:____________________

[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]

I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

____________      _____________________              DATED:____________

/ /      VICE PRESIDENT

/ /      ASSISTANT VICE PRESIDENT




                                       N-1
<PAGE>

                                                                       Exhibit O


                            Exhibit O is a photocopy
                           of the Depository Agreement
                                  as delivered.


                [see appropriate documents delivered at closing]








                                       O-1
<PAGE>


                                    EXHIBIT P

                       FORM OF MORTGAGE NOTE AND MORTGAGE


                             [Provide Upon Request]







                                       P-1

<PAGE>


                                    EXHIBIT Q

                                   [RESERVED]










                                       Q-1


<PAGE>



                                    EXHIBIT R

                              FORM OF CAP CONTRACT




DATE:               [_________], 2004

TO:                 Countrywide Home Loans, Inc.
ATTENTION:          Mr. Jeff Staub/Kevin Doyle
TELEPHONE:          818-225-3279
FACSIMILE:          818-225-4099

FROM:               Derivatives Documentation
TELEPHONE:          212-272-2711
FACSIMILE:          212-272-9857

SUBJECT:            Fixed Income Derivatives Confirmation and Agreement

REFERENCE NUMBER:   [________]


The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Bear Stearns Financial Products Inc. ("BSFP") and
Countrywide Home Loans, Inc., ("Counterparty"). This Agreement, which evidences
a complete and binding agreement between you and us to enter into the
Transaction on the terms set forth below, constitutes a "Confirmation" as
referred to in the "ISDA Form Master Agreement" (as defined below), as well as a
"Schedule" as referred to in the ISDA Form Master Agreement.

1.     This Agreement is subject to the 2000 ISDA DEFINITIONS (the
       "Definitions"), as published by the International Swaps and Derivatives
       Association, Inc. ("ISDA"). You and we have agreed to enter into this
       Agreement in lieu of negotiating a Schedule to the 1992 ISDA Master
       Agreement (Multicurrency--Cross Border) form (the "ISDA Form Master
       Agreement") but, rather, an ISDA Form Master Agreement shall be deemed to
       have been executed by you and us on the date we entered into the
       Transaction. In the event of any inconsistency between the provisions of
       this Agreement and the Definitions or the ISDA Form Master Agreement,
       this Agreement shall prevail for purposes of the Transaction.

2.     The terms of the particular Transaction to which this Confirmation
       relates are as follows:

       Type of Transaction:                 Rate Cap

       Notional Amount:                     [____________]



                                      R-1
<PAGE>


       Trade Date:                          [_________], 2004

       Effective Date:                      [_________], 2004

       Termination Date:                    [_______________], subject to
                                            adjustment in accordance with the
                                            Business Day Convention.






FIXED AMOUNT (PREMIUM):

           Fixed Rate Payer:                Counterparty

           Fixed Rate Payer
           Payment Date:                    [_________], 2004

           Fixed Amount:                    [_________]

       FLOATING AMOUNTS:

           Floating Rate Payer:             BSFP

           Cap Rate:                        Shall equal;

                                            (i) [_____]% for each Calculation
                                            Period from and including the
                                            Effective Date to but excluding
                                            [____], 2005; and (ii) [_____]% for
                                            each Calculation Period from and
                                            including [____], 2005 to but
                                            excluding the Termination Date.

           Floating Rate Payer
           Period End Dates:                The 25th calendar day of each month
                                            during the Term of this Transaction,
                                            commencing [_______________] and
                                            ending on the Termination Date,
                                            subject to adjustment in accordance
                                            with the Business Day Convention.

           Floating Rate Payer
           Payment Dates:                   Early Payment shall be applicable.
                                            One Business Day preceding each
                                            Floating Rate Payer Period End Date.



                                      R-2
<PAGE>


           Floating Rate Option:            USD-LIBOR-BBA, provided, however,
                                            that if the Floating Rate Option (i)
                                            for any Calculation Period from and
                                            including the Effective Date to but
                                            excluding [__________], is greater
                                            than [_____]% then the Floating Rate
                                            Option for such Calculation Period
                                            shall be deemed to be [_____]%; and
                                            (ii) for any Calculation Period from
                                            and including [__________] to but
                                            excluding the Termination Date, is
                                            greater than [_____]% then the
                                            Floating Rate Option for such
                                            Calculation Period shall be deemed
                                            to be [_____]%.


           Designated Maturity:             One month

           Floating Rate Day
           Count Fraction:                  Actual/360

           Reset Dates:                     The first day of each Calculation
                                            Period.



           Compounding:                     Inapplicable

       Business Days:                       New York and London

       Business Day Convention:             Modified Following

       Calculation Agent:                   BSFP


3.     Additional Provisions:               1) Each party hereto is hereby
                                            advised and acknowledges that the
                                            other party has engaged in (or
                                            refrained from engaging in)
                                            substantial financial transactions
                                            and has taken (or refrained from
                                            taking) other material actions in
                                            reliance upon the entry by the
                                            parties into the Transaction being
                                            entered into on the terms and
                                            conditions set forth herein and in
                                            the Confirmation relating to such
                                            Transaction, as applicable. This
                                            paragraph (1) shall be deemed
                                            repeated on the trade date of each
                                            Transaction.

4.   Provisions Deemed Incorporated in a Schedule to the Master Agreement:

1)   The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form
     Master Agreement will apply to any Transaction.


                                      R-3
<PAGE>


2)   TERMINATION PROVISIONS. For purposes of the Master Agreement:

(a)  "Specified Entity" is not applicable to BSFP or Counterparty for any
purpose.

(b)  "Specified Transaction" is not applicable to BSFP or Counterparty for any
purpose, and, accordingly, Section 5(a)(v) shall not apply to BSFP or
Counterparty.

(c)  The "Cross Default" provisions of Section 5(a)(vi) will not apply to BSFP
or to Counterparty.

(d)  The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to BSFP or Counterparty.

(e)  The "Automatic Early Termination" provision of Section 6(a) will not apply
to BSFP or to Counterparty.

(f)  Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:

     (i)   Market Quotation will apply.

     (ii)  The Second Method will apply.

(g)  "Termination Currency" means United States Dollars.

3)  Tax Representations. Not applicable

4)  LIMITATION ON EVENTS OF DEFAULT. Notwithstanding the terms of Sections 5 and
6 of this Agreement, if at any time and so long as the Counterparty has
satisfied in full all its payment obligations under Section 2(a)(i) of this
Agreement and has at the time no future payment obligations, whether absolute or
contingent, under such Section, then unless BSFP is required pursuant to
appropriate proceedings to return to the Counterparty or otherwise returns to
the Counterparty upon demand of the Counterparty any portion of any such
payment, (a) the occurrence of an event described in Section 5(a) of this
Agreement with respect to the Counterparty shall not constitute an Event of
Default or Potential Event of Default with respect to the Counterparty as
Defaulting Party and (b) BSFP shall be entitled to designate an Early
Termination Date pursuant to Section 6 of this Agreement only as a result of the
occurrence of a Termination Event set forth in either Section 5(b)(i) or
5(b)(ii) of this Agreement with respect to BSFP as the Affected Party or Section
5(b)(iii) with respect to BSFP as the Burdened Party.

5)  DOCUMENTS TO BE DELIVERED. For the purpose of Section 4(a):

(1)  Tax forms, documents, or certificates to be delivered are:


                                      R-4
<PAGE>


PARTY REQUIRED TO       FORM/DOCUMENT/                 DATE BY WHICH TO
DELIVER DOCUMENT        CERTIFICATE                    BE DELIVERED

BSFP and                Any document required or       Promptly after the
the Counterparty        reasonably requested to        earlier of (i) reasonable
                        allow the other party to       demand by either party or
                        make payments under this       (ii) learning that such
                        Agreement without any          form or document is
                        deduction or withholding       required
                        for or on the account of
                        any Tax or with such
                        deduction or withholding
                        at a reduced rate


(2) Other documents to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED TO    FORM/DOCUMENT/                 DATE BY WHICH TO            COVERED BY SECTION
DELIVER DOCUMENT     CERTIFICATE                    BE DELIVERED                3(d) REPRESENTATION
<S>                  <C>                            <C>                         <C>
BSFP and             Any documents required by      Upon the execution and       Yes
the Counterparty     the receiving party to         delivery of this
                     evidence the authority of      Agreement and such
                     the delivering party or        Confirmation
                     its Credit Support
                     Provider, if any, for it
                     to execute and deliver
                     this Agreement, any
                     Confirmation , and any
                     Credit Support Documents
                     to which it is a party,
                     and to evidence the
                     authority of the
                     delivering party or its
                     Credit Support Provider
                     to perform its
                     obligations under this
                     Agreement, such
                     Confirmation and/or
                     Credit Support Document,
                     as the case may be
</TABLE>



                                       R-5
<PAGE>


<TABLE>
<CAPTION>
PARTY REQUIRED TO    FORM/DOCUMENT/                 DATE BY WHICH TO            COVERED BY SECTION
DELIVER DOCUMENT     CERTIFICATE                    BE DELIVERED                3(d) REPRESENTATION
<S>                  <C>                            <C>                         <C>
BSFP and             A certificate of an            Upon the execution          Yes
the Counterparty     authorized officer of the      and delivery of
                     party, as to the               this Agreement and
                     incumbency and authority       such Confirmation
                     of the respective
                     officers of the party
                     signing this Agreement,
                     any relevant Credit
                     Support Document, or any
                     Confirmation, as the case
                     may be
</TABLE>


6) MISCELLANEOUS. Miscellaneous

(a) Address for Notices: For the purposes of Section 12(a) of this Agreement:

         Address for notices or communications to BSFP:

             Address:      383 Madison Avenue, New York, New York  10179
             Attention:    DPC Manager - Suite 2700
             Facsimile:    (212) 272-5823

         with a copy to:

             Address:      One Metrotech Center North, Brooklyn, New York 11201
             Attention:    Derivative Operations - 7th Floor
             Facsimile:    (212) 272-1634

             (For all purposes)


         Address for notices or communications to the Counterparty:

             Address:      4500 Park Granada
                           Mail Stop CH-143
                           Calabasas, CA 91302
             Attention:    Mr. Jeff Staab
             Facsimile:    818-225-3898
             Phone:        818-225-3279



                                      R-6
<PAGE>


(b)      Process Agent. For the purpose of Section 13(c):

                           BSFP appoints as its
                           Process Agent:            Not Applicable

                           The Counterparty appoints as its
                           Process Agent:            Not Applicable

(c)      Offices. The provisions of Section 10(a) will not apply to this
         Agreement; neither BSFP nor the Counterparty have any Offices other
         than as set forth in the Notices Section and BSFP agrees that, for
         purposes of Section 6(b) of this Agreement, it shall not in future have
         any Office other than one in the United States.

(d)      Multibranch Party. For the purpose of Section 10(c) of this Agreement:

         BSFP is not a Multibranch Party.

         The Counterparty is not a Multibranch Party.

(e)      Calculation Agent. The Calculation Agent is BSFP.

(f)      Credit Support Document. Not applicable for either BSFP or the
         Counterparty.


(g)      Credit Support Provider.

         BSFP:    Not Applicable

         The Counterparty: Not Applicable

(h)      Governing Law. The parties to this Agreement hereby agree that the law
         of the State of New York shall govern their rights and duties in whole.

(i)      Severability. If any term, provision, covenant, or condition of this
         Agreement, or the application thereof to any party or circumstance,
         shall be held to be invalid or unenforceable (in whole or in part) for
         any reason, the remaining terms, provisions, covenants, and conditions
         hereof shall continue in full force and effect as if this Agreement had
         been executed with the invalid or unenforceable portion eliminated, so
         long as this Agreement as so modified continues to express, without
         material change, the original intentions of the parties as to the
         subject matter of this Agreement and the deletion of such portion of
         this Agreement will not substantially impair the respective benefits or
         expectations of the parties.


                                      R-7
<PAGE>


The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid or
enforceable term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.

(j) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and all
communications between officers or employees of the parties, waives any further
notice of such monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.

(k) Waiver of Jury Trial. Each party waives any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document. (l) BSFP will not unreasonably withhold or delay its consent
to an assignment of this Agreement to any other third party.



7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, PROVIDED that BSFP shall not be deemed to have any Affiliates
for purposes of this Agreement, including for purposes of Section 6(b)(ii).

8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):

         "(g) RELATIONSHIP BETWEEN PARTIES.

                           Each party represents to the other party on each date
                           when it enters into a Transaction that:--

                  (1) NONRELIANCE. It is not relying on any statement or
representation of the other party regarding the Transaction (whether written or
oral), other than the representations expressly made in this Agreement or the
Confirmation in respect of that Transaction.

                  (2) EVALUATION AND UNDERSTANDING.

                  (i) It has the capacity to evaluate (internally or through
independent professional advice) the Transaction and has made its own decision
to enter into the Transaction; and

                  (ii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms and conditions and to
assume those risks, financially and otherwise.

                  (3) PURPOSE. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its underlying
assets or liabilities or in connection with a line of business.


                                      R-8
<PAGE>


PRINCIPAL. It is entering into the Transaction as principal, and not as agent or
in any other capacity, fiduciary or otherwise.

          NEITHER THE BEAR STEARNS COMPANIES INC. NOR ANY SUBSIDIARY OR
          AFFILIATE OF THE BEAR STEARNS COMPANIES INC. OTHER THAN BSFP IS AN
          OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.

5.     Account Details and
       Settlement Information:    PAYMENTS TO BSFP:
                                  Citibank, N.A., New York
                                  ABA Number: 021-0000-89, for the account of
                                  Bear, Stearns Securities Corp.
                                  Account Number: 0925-3186, for further credit
                                  to Bear Stearns Financial Products Inc.
                                  Sub-account  Number: 102-04654-1-3
                                  Attention: Derivatives Department

                                  PAYMENTS TO COUNTERPARTY:
                                  Please provide

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

Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 212-272-9857. For inquiries regarding U.S. Transactions, please
contact SUSAN DONLON by telephone at 212-272-2364. For all other inquiries
please contact ORLAITH O'DEA by telephone at 353-1-402-6220 Originals will be
provided for your execution upon your request.

We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.

Very truly yours,

BEAR STEARNS FINANCIAL PRODUCTS INC.



By:    _______________________________
       Name:
       Title:



                                      R-9
<PAGE>


Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.

COUNTRYWIDE HOME LOANS, INC.



By:  _______________________________
     As authorized agent or officer for Countrywide Home Loans, Inc.
     Name:
     Title:







                                      R-10
<PAGE>




                                    EXHIBIT S


                    FORM OF CAP CONTRACT ASSIGNMENT AGREEMENT


                              ASSIGNMENT AGREEMENT

         ASSIGNMENT AGREEMENT, dated as of ________________ (the "Assignment
Effective Date"), among _______________________ ("Assignor"),
____________________________________ ("Assignee") by ___________________, not in
its individual capacity but as trustee for Assignee, and Bank of America, N.A.
("Remaining Party") (the "Assignment Agreement").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, Assignor desires to assign all of its rights and delegate all
of its duties and obligations to Assignee in that certain confirmation dated
__________________ (the "Assigned Transaction"), a copy of such Assigned
Transaction being attached hereto as Exhibit I;

         WHEREAS, Assignor and Remaining Party have executed and delivered an
ISDA Master Agreement dated __________________ (the "Assignor Swap Agreement");

         WHEREAS, Assignee and Remaining Party have agreed that, from and after
the Assignment Effective Date, the Assigned Transaction shall supplement, form a
part of and be subject to an ISDA Master Agreement, as defined in paragraph 2
below (the "Assignee Swap Agreement") and, for the avoidance of doubt, shall not
supplement, form a part of or be subject to the Assignor Swap Agreement;

         WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction, by the incorporation of such Assigned Transaction under the
Assignee Swap Agreement; and

         WHEREAS, Assignor desires to obtain the written consent of Remaining
Party to the assignment, delegation, and assumption and Remaining Party desires
to grant such consent in accordance with the terms hereof;

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:

         1. ASSIGNMENT AND ASSUMPTION. Effective as of and from the Assignment
Effective Date, Assignor hereby assigns all of its rights and delegates all of
its duties and obligations to Assignee and Assignee hereby assumes all the
Assignor's rights, duties, and obligations under the Assigned Transaction
arising on or after the Assignment Effective Date (subject to Paragraph 3
below); PROVIDED, HOWEVER, that as of and from the Assignment




<PAGE>


Effective Date, the Assigned Transaction shall supplement, form part of and be
subject to the Assignee Swap Agreement (as defined in paragraph 2 below) and the
Assigned Transaction shall accordingly constitute a Transaction and a
Confirmation as such terms are defined in the Assignee Swap Agreement.

         2. ASSIGNEE SWAP AGREEMENT. The Assignee and Remaining Party hereby
agree that the Assigned Transaction will supplement, form a part of, and be
subject to an agreement in the form of the 1992 ISDA Master Agreement
(Multicurrency-Cross Border) between the Assignee and the Remaining Party as if
the parties had executed an agreement in such form (but without any Schedule
except for the election of (i) the laws of the State of New York (without
reference to choice of law doctrine) as the governing law and (ii) USD as the
Termination Currency, and the items specified in paragraph 11 below) on the
Assignment Effective Date. In the event of any inconsistency between the
provisions of that agreement and the Assigned Transaction, the Assigned
Transaction will prevail.

         3. PAYMENTS. Each party hereby agrees that the Assignee or the
Remaining Party, as the case may be, shall be responsible for all payments
accruing from the Calculation Period that begins on _________________ and the
Assignor or the Remaining Party, as the case may be, shall be responsible for
all payments accruing prior to such Calculation Period. All payments remitted by
Remaining Party under the Assigned Transaction shall be made by wire transfer
according to the following instructions:

                          ____________________
                          ____________________
                          ABA # ______________
                          GLA # ______________
                          For Further Credit: _____
                          Attn:    ______________

         4. RELEASE. Effective as of and from the Assignment Effective Date,
Remaining Party and Assignor hereby release one another from all duties and
obligations owed under and in respect of the Assigned Transaction, and Assignor
hereby terminates its rights under and in respect of the Assigned Transaction.

         5. CONSENT AND ACKNOWLEDGMENT OF REMAINING PARTY. Remaining Party
hereby consents to the assignment and delegation by Assignor to Assignee of all
the rights, duties, and obligations of the Assignor under the Assigned
Transaction pursuant to this Assignment Agreement.

         6. REPRESENTATIONS. Each party hereby represents and warrants to the
other parties as follows:

         (a)      It is duly organized, validly existing and in good standing
                  under the laws of its organization or incorporation;

         (b)      It has the power to execute and deliver this Assignment
                  Agreement; and

<PAGE>


         (c)      Its obligations under this Assignment Agreement constitute its
                  legal, valid and binding obligations, enforceable in
                  accordance with their respective terms; except as enforcement
                  thereof may be limited by bankruptcy, insolvency,
                  reorganization, moratorium, receivership, conservatorship, or
                  other laws affecting the enforcement or creditors' rights
                  generally or by general equity principles.

     As of the Assignment Effective Date, each of Assignor and Remaining Party

     represent that no event or condition has occurred and is continuing that

     constitutes an Event of Default, a Potential Event of Default or to the

     party's knowledge, a Termination Event (as such terms are defined in the

     Assignor Swap Agreement), with respect to the party, and no such event

     would occur as a result of the party's entering into or performing its

     obligations under this Assignment Agreement.


         8. INDEMNITY. Each of the Assignor and the Remaining Party hereby
agrees to indemnify and hold harmless the Assignee with respect to any and all
claims arising under the Assigned Transaction prior to the Assignment Effective
Date (subject to paragraph 3 above). Each of the Assignee and the Remaining
Party hereby agrees to indemnify and hold harmless the Assignor with respect to
any and all claims arising under the Assigned Transaction on or after the
Assignment Effective Date (subject to paragraph 3 above).

         9. GOVERNING LAW. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York without reference
to the conflict of laws provisions thereof (except Section 5-1401 of the New
York General Obligations Law).

         10. COUNTERPARTS. This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission or electronically
sent via the Internet using such encoding and security procedures as may be
specified by the parties by subsequent agreement), each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same instrument.

         11. PROVISIONS DEEMED INCORPORATED INTO THE ASSIGNEE SWAP AGREEMENT.

         (a) LIMITATION ON LIABILITY. Assignee and Remaining Party agree to the
following: (i) the sole recourse in respect of the obligations of Assignee
hereunder and under the Assigned Transaction shall be to the Trust Fund (as
defined in the Pooling and Servicing Agreement, dated as of _____________, among
_____________, as depositor, Assignor, as seller, _____________, as master
servicer, and _____________________________, as trustee (the "Pooling and
Servicing Agreement")); (ii) _____________ is entering into this Assignment



<PAGE>


Agreement solely in its capacity as trustee and not in its individual capacity
under the Pooling and Servicing Agreement; and (iii) in no case shall
_______________ (or any person acting as successor trustee under the Pooling and
Servicing Agreement) be personally liable for or on account of any of the
statements, representations, warranties, covenants or obligations stated to be
those of Assignee under the terms of the Assigned Transaction, all such
liability, if any, being expressly waived by Assignee and Remaining Party and
any person claiming by, through or under either such party. Notwithstanding the
foregoing (or anything to the contrary in this Assignment Agreement),
_____________shall be liable for its own negligence, willful misconduct, bad
faith and/or fraud.

         (b) LIMITATION ON EVENTS OF DEFAULT. Notwithstanding the terms of
Sections 5 and 6 of the Assignee Swap Agreement, if at any time and so long as
the Assignee has satisfied in full all its payment obligations under Section
2(a)(i) of the Assignee Swap Agreement and has at the time no future payment
obligations, whether absolute or contingent, under such Section, then unless
Remaining Party is required pursuant to appropriate proceedings to return to the
Assignee or otherwise returns to the Assignee upon demand of the Assignee any
portion of any such payment, (a) the occurrence of an event described in Section
5(a)(i) of the Assignee Swap Agreement with respect to the Assignee shall not
constitute an Event of Default or Potential Event of Default with respect to the
Assignee as Defaulting Party and (b) Remaining Party shall be entitled to
designate an Early Termination Date pursuant to Section 6 of the Assignee Swap
Agreement only as a result of the occurrence of a Termination Event set forth in
either Section 5(b)(i) or 5(b)(ii) of the Assignee Swap Agreement with respect
to Remaining Party as the Affected Party or Section 5(b)(iii) with respect to
Remaining Party as the Burdened Party.

         (c) ADDRESS FOR NOTICES:

         Address for notices or communications to the Assignee:

         Address: ___________________________________________________________
         Attention: ________________
         Facsimile: ________________
         Phone: ___________________

         (For all purposes).

         (d) NON-PETITION. Remaining Party hereby irrevocably and
unconditionally agrees that it will not institute against, or join any other
person in instituting against, the Assignee, any bankruptcy, reorganization,
arrangement, insolvency, or similar proceeding under the laws of the United
States, the Cayman Islands or any other jurisdiction for the non-payment of any
amount due hereunder or any other reason until the payment in full of the
Offered Certificates (as defined in the Pooling and Servicing Agreement) and the
expiration of a period of one year plus one day (or, if longer, the applicable
preference period) following such payment. Nothing herein shall prevent
Remaining Party from participating in any such proceeding once commenced.


<PAGE>


         (e) ADDITIONAL PROVISIONS. Notwithstanding the terms of Sections 5 and
6 of the Assignee Swap Agreement, the provisions of Sections 5(a)(ii) and
5(a)(iv) and shall not apply to Remaining Party or the Assignee.

         (f) NO SET-OFF. Notwithstanding any provision of this Assignment
Agreement or any other existing or future agreement, each party irrevocably
waives any and all rights it may have to set off, recoup or otherwise withhold
or suspend or condition payment or performance of any obligation between it and
the other party hereunder against any obligation between it and the other party
under any other agreements. The provisions for Set-off set forth in Section 6(e)
of the Agreement shall not apply for purposes of this Transaction.

         (g) Section 3 of the Assignee Swap Agreement is hereby amended by
adding at the end thereof the following subsection (g):

         "(g)     Relationship Between Parties.

                  Each of Assignor, Assignee and Remaining Party represents to
the other on each date when it enters into a Transaction that:

                  (1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction (whether written or
oral), other than the representations expressly made in this Agreement or the
Confirmation in respect of that Transaction.

                  (2) Evaluation and Understanding.

                           (a) It has the capacity to evaluate (internally or
through independent professional advice) the Transaction and has made its own
decision to enter into the Transaction; and

                           (b) It understands the terms, conditions and risks of
the Transaction and is willing and able to accept those terms and conditions and
to assume those risks, financially and otherwise.

                  (3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its underlying
assets or liabilities or in connection with a line of business.

                  (4) Principal. It is entering into the Transaction as
principal, and not as agent or in any other capacity, fiduciary or otherwise.

                  (5) Eligible Contract Participant. It constitutes an "eligible
contract participant" as such term is defined in Section 1(a)12 of the Commodity
Exchange Act, as amended."

         (h) SUBSTITUTION EVENT. If at any time the long-term senior unsecured
deposit ratings of Remaining Party shall be rated below "____" by Standard &
Poor's Ratings Service, below


<PAGE>


"____" by Moody's Investors Service, Inc., and below "____" by Fitch, Inc., and
within ten (10) Local Business Days following the publication date(s) of such
ratings, Remaining Party, using its good faith efforts, fails to find an entity
acceptable to the Assignee, which acceptance shall not be unreasonably withheld
or delayed, to whom all of Remaining Party's interests and obligations under
this Agreement shall be assigned at no cost to the Assignee, and following which
Remaining Party shall be released from all further obligations under this
Agreement, then, at the option of the Assignee, such failure shall constitute an
Additional Termination Event with Remaining Party as the Affected Party.





<PAGE>



         IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement as of the date first above written.

                                            [NAME]

                                            By:      _____________________
                                            Name:    _____________________
                                            Title:   _____________________

                                            [NAME]

                                            By:      _____________________
                                            Name:    _____________________
                                            Title:   _____________________


                                            [NAME]

                                            By:      _____________________
                                            Name:    _____________________
                                            Title:   _____________________











<PAGE>


                                    EXHIBIT T


                OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS


                           ASSET-BACKED CERTIFICATES,
                                 Series 2004-BC1

                                        [Date]

Via Facsimile

The Bank of New York,
         as Trustee
101 Barclay St., 8W
New York, New York  10286


Dear Sir or Madam:

                  Reference is made to the Pooling and Servicing Agreement,
dated as of March 1, 2004, (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as Seller, Countrywide Home
Loans Servicing LP, as Master Servicer and The Bank of New York, as Trustee.
Capitalized terms used herein shall have the meanings ascribed to such terms in
the Pooling and Servicing Agreement.

                  __________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:

                  With respect to the Distribution Date in _________ 20[ ] and
each Mortgage Loan set forth in the attached schedule:

                  1. A Principal Prepayment in full or in part was received
during the related Prepayment Period;

                  2. Any Prepayment Charge due under the terms of the Mortgage
Note with respect to such Principal Prepayment was or was not, as indicated on
the attached schedule using "Yes" or "No", received from the Mortgagor and
deposited in the Certificate Account;

                  3. As to each Mortgage Loan set forth on the attached schedule
for which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:

                           (i) the Master Servicer's determination that such
         waiver would maximize recovery of Liquidation Proceeds for such
         Mortgage Loan, taking into account the value of such Prepayment Charge,
         or


<PAGE>


                           (ii)(A) the enforceability thereof is limited (1) by
         bankruptcy, insolvency, moratorium, receivership, or other similar law
         relating to creditors' rights generally or (2) due to acceleration in
         connection with a foreclosure or other involuntary payment, or (B) the
         enforceability is otherwise limited or prohibited by applicable law;
         and

                  4. We certify that all amounts due in connection with the
waiver of a Prepayment Charge inconsistent with clause 3 above which are
required to be deposited by the Servicer pursuant to Section 3.20 of the Pooling
and Servicing Agreement, have been or will be so deposited.

                                            COUNTRYWIDE HOME LOANS SERVICING LP,
                                              as Master Servicer


                                            By:  COUNTRYWIDE GP, INC.



                                            By:_________________________________
                                                Name:
                                                Title:





<PAGE>


         SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
                      DURING THE RELATED PREPAYMENT PERIOD


------------------------- ------------------------ -----------------------------
LOAN NUMBER                CLAUSE 2:  YES/NO        CLAUSE 3:  (I) OR (II)
------------------------- ------------------------ -----------------------------

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

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

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

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

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

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

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

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

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