Document:

DEUTSCHE MORTGAGE SECURITIES, INC.

                                    Depositor

                                       and

                             WELLS FARGO BANK, N.A.

                  Master Servicer and Securities Administrator

                                       and

                                  HSBC BANK USA

                                     Trustee

                              _____________________

                         POOLING AND SERVICING AGREEMENT

                             Dated as of May 1, 2004

                              _____________________

                       Mortgage Pass-Through Certificates

                                  Series 2004-4

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                              ARTICLE I DEFINITIONS

Section 1.1    Definitions.....................................................8

Section 1.2    Allocation of Certain Interest Shortfall.......................78

                ARTICLE II CONVEYANCE OF TRUST FUND;
                 ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.1    Conveyance of Trust Fund.......................................81

Section 2.2    Acceptance by Trustee..........................................81

Section 2.3    Repurchase or Substitution of Loans............................81

Section 2.4    Authentication and Delivery of Certificates; Designation
               of Certificates as REMIC Regular  and Residual Interests.......84

Section 2.5    Representations and Warranties of the Master Servicer..........85

Section 2.6    Establishment of the Trust.....................................86

         ARTICLE III ADMINISTRATION AND SERVICING OF THE LOANS; ACCOUNTS

Section 3.1    Master Servicer................................................87

Section 3.2    REMIC-Related Covenants........................................88

Section 3.3    Monitoring of Servicers........................................88

Section 3.4    Fidelity Bond..................................................89

Section 3.5    Power to Act; Procedures.......................................89

Section 3.6    Due-on-Sale Clauses; Assumption Agreements.....................90

Section 3.7    Release of Mortgage Files......................................90

Section 3.8    Documents, Records and Funds in Possession of Master
               Servicer To Be Held for Trustee................................91

Section 3.9    Standard Hazard Insurance and Flood Insurance Policies.........92

Section 3.10   Presentment of Claims and Collection of Proceeds...............92

Section 3.11   Maintenance of the Primary Mortgage Insurance Policies.........93

Section 3.12   Trustee to Retain Possession of Certain Insurance
               Policies and Documents.........................................93

Section 3.13   Realization Upon Defaulted Loans...............................94

Section 3.14   Compensation for the Master Servicer...........................94

Section 3.15   REO Property...................................................94

Section 3.16   Annual Officer's Certificate as to Compliance..................95

Section 3.17   Annual Independent Accountant's Servicing Report...............96

                                      -i-

<PAGE>

Section 3.18   Reports Filed with Securities and Exchange Commission..........96

Section 3.19   UCC............................................................97

Section 3.20   Obligation of the Master Servicer in Respect of
               Compensating Interest..........................................97

Section 3.21   Reserved.......................................................97

Section 3.22   Protected Accounts.............................................97

Section 3.23   Distribution Accounts..........................................98

Section 3.24   Permitted Withdrawals and Transfers from the Distribution
               Accounts......................................................100

Section 3.25   Reserve Funds.................................................101

Section 3.26   Prepayment Penalty Verification...............................103

   ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES; STATEMENTS AND REPORTS

Section 4.1    Distributions to Group I Certificateholders...................105

Section 4.2    Allocation of Realized Losses on the Group I Loans............110

Section 4.3    Distributions to Group II Certificateholders..................112

Section 4.4    Allocation of Realized Losses on the Group II Loans...........117

Section 4.5    Distributions to Holders of the Group III-VII Certificates....119

Section 4.6    Allocation of Realized Losses on the Group III-VII Loans......124

Section 4.7    Effect of Distributions and Realized Losses; Final
               Distributions on Certificates.................................125

Section 4.8    Statements to Certificateholders..............................126

Section 4.9    Advances......................................................133

Section 4.10   Compliance with Withholding Requirements......................134

Section 4.11   REMIC Distributions...........................................134

                           ARTICLE V THE CERTIFICATES

Section 5.1    The Certificates..............................................141

Section 5.2    Certificates Issuable in Classes; Distributions of Principal
               and Interest; Authorized Denominations........................143

Section 5.3    Registration of Transfer and Exchange of Certificates.........143

Section 5.4    Mutilated, Destroyed, Lost or Stolen Certificates.............148

Section 5.5    Persons Deemed Owners.........................................149

      ARTICLE VI THE DEPOSITOR, MASTER SERVICER AND THE CREDIT RISK MANAGER

Section 6.1    Liability of the Depositor and the Master Servicer............150

Section 6.2    Merger or Consolidation of the Depositor or the
               Master Servicer...............................................150

                                      -ii-

<PAGE>

Section 6.3    Limitation on Liability of the Depositor, the Master Servicer,
               the Servicers, the Securities Administrator and Others........150

Section 6.4    Limitation on Resignation of the Master Servicer..............151

Section 6.5    Assignment of Master Servicing................................151

Section 6.6    Rights of the Depositor in Respect of the Master Servicer.....152

Section 6.7    Duties of the Credit Risk Manager.............................152

Section 6.8    Limitation Upon Liability of the Credit Risk Manager..........153

Section 6.9    Removal of the Credit Risk Manager............................153

                               ARTICLE VII DEFAULT

Section 7.1    Master Servicer Events of Default.............................154

Section 7.2    Trustee to Act; Appointment of Successor......................155

Section 7.3    Notification to Certificateholders............................156

Section 7.4    Waiver of Master Servicer Events of Default...................157

      ARTICLE VIII CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

Section 8.1    Duties of Trustee and Securities Administrator................158

Section 8.2    Certain Matters Affecting Trustee and Securities
               Administrator.................................................159

Section 8.3    Trustee and Securities Administrator not Liable for
               Certificates or Loans.........................................161

Section 8.4    Trustee, Master Servicer and Securities Administrator
               May Own Certificates..........................................161

Section 8.5    Fees and Expenses of Trustee and Securities Administrator.....161

Section 8.6    Eligibility Requirements for Trustee and Securities
               Administrator.................................................162

Section 8.7    Resignation and Removal of Trustee and Securities
               Administrator.................................................162

Section 8.8    Successor Trustee or Securities Administrator.................163

Section 8.9    Merger or Consolidation of Trustee or Securities
               Administrator.................................................164

Section 8.10   Appointment of Co-Trustee or Separate Trustee.................164

Section 8.11   Appointment of Office or Agency...............................165

Section 8.12   Representations and Warranties of the Trustee.................165

                             ARTICLE IX TERMINATION

Section 9.1    Termination Upon Purchase or Liquidation of Loans.............167

Section 9.2    Additional Termination Requirements...........................169

                           ARTICLE X REMIC PROVISIONS

Section 10.1   REMIC Administration..........................................171

Section 10.2   Prohibited Transactions and Activities........................173

                                     -iii-

<PAGE>

Section 10.3   Indemnification...............................................174

                       ARTICLE XI MISCELLANEOUS PROVISIONS

Section 11.1   Amendment.....................................................175

Section 11.2   Recordation of Agreement; Counterparts........................176

Section 11.3   Limitation on Rights of Certificateholders....................176

Section 11.4   Governing Law.................................................177

Section 11.5   Notices.......................................................177

Section 11.6   Severability of Provisions....................................177

Section 11.7   Notice to Rating Agencies.....................................178

Section 11.8   Article and Section References................................178

Section 11.9   Grant of Security Interest....................................178

                                      -iv-

<PAGE>

                                    EXHIBITS

Exhibit A-1    -     Forms of Class A Certificates (other than the Class A-IO
                     Certificates)
Exhibit A-2    -     Forms of Class A-IO Certificates
Exhibit A-3    -     Forms of Class M, Class B-1 and Class B-2 Certificates
Exhibit A-4          Forms of Class B-3, Class B-4 and Class B-5 Certificates
Exhibit A-5    -     Forms of Class CE Certificates
Exhibit A-6    -     Forms of Class P Certificates
Exhibit A-7    -     Forms of Class I/II-R Certificates
Exhibit A-8    -     Forms of Class A-R Certificates
Exhibit  B     -     [Reserved]
Exhibit C      -     Form of Transfer Affidavit
Exhibit D      -     Form of Transferor Certificate
Exhibit E      -     Form of Investment Letter (Non-Rule 144A)
Exhibit F      -     Form of Rule 144A Investment Letter
Exhibit G      -     Form of Benefit Plan Affidavit
Exhibit H-1    -     Form of Regulation S Transfer Certificate
Exhibit H-2    -     Form of Clearing System Certificate
Schedule One   -     Loan Schedule
Schedule Two   -     Prepayment Charge Schedule

                                      -v-

<PAGE>

         This Pooling and Servicing Agreement, dated and effective as of May 1,
2004 (this "Agreement"), is executed by and among Deutsche Mortgage Securities,
Inc., as depositor (the "Depositor"), Wells Fargo Bank, N. A., as master
servicer (the "Master Servicer") and securities administrator (the "Securities
Administrator"), and HSBC Bank USA, as trustee (the "Trustee"). Capitalized
terms used in this Agreement and not otherwise defined have the meanings
ascribed to such terms in Article I hereof.

                              PRELIMINARY STATEMENT

         The Depositor at the Closing Date is the owner of the Loans and the
other property being conveyed by it to the Trustee for inclusion in the Trust
Fund. On the Closing Date, the Depositor will acquire the Certificates from the
Trust Fund as consideration for its transfer to the Trust Fund of the Loans and
certain other assets, and will be the owner of the Certificates. The Depositor
has duly authorized the execution and delivery of this Agreement to provide for
the conveyance to the Trustee of the Loans and the issuance to the Depositor of
the Certificates representing in the aggregate the entire beneficial ownership
of the Trust Fund. All covenants and agreements made by the Depositor, the
Master Servicer, the Securities Administrator and the Trustee herein with
respect to the Loans and the other property constituting the Trust Fund are for
the benefit of the Holders from time to time of the Certificates. The Depositor,
the Master Servicer, the Securities Administrator and the Trustee are entering
into this Agreement, and the Trustee is accepting the trust created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.

         The Certificates issued hereunder, other than the Class B-3, Class B-4,
Class B-5, Class CE, Class P and Class I/II-R Certificates, have been offered
for sale pursuant to a Prospectus, dated January 28, 2004, and a Prospectus
Supplement, dated May 26, 2004 of the Depositor (together, the "Prospectus").
The Trust Fund created hereunder is intended to be the "Trust" as described in
the Prospectus and the Certificates are intended to be the "Certificates"
described therein.

                                     REMIC I
                                     -------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the Group I Loans and other related assets (other
than the related Reserve Fund and the related Cap Contract) in the Trust Fund
subject to this Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets shall be designated as "REMIC I." Component R-1 of the
Class I/II-R Certificate shall represent the sole class of "residual interests"
in REMIC I for purposes of the REMIC Provisions under federal income tax law.
The following table irrevocably sets forth the designation, the Uncertificated
REMIC I Pass-Through Rate, the initial Uncertificated Principal Balance, and
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC I
Regular Interests. None of the REMIC I Regular Interests will be certificated.

                      Initial
                   Uncertificated       Uncertified REMIC 1     Assumed Final
Designation      Principal Balance       Pass-Through Rate      Maturity Date(1)
-----------      -----------------      -------------------     ----------------
   LTI-1           $218,765,813.00          Variable(2)         April 25, 2034
 LTI-IO-1            $6,250,000.00          Variable(2)         April 25, 2034
 LTI-IO-2            $2,502,000.00          Variable(2)         April 25, 2034

                                      -1-
<PAGE>

 LTI-IO-3            $3,749,000.00          Variable(2)         April 25, 2034
 LTI-IO-4            $3,751,000.00          Variable(2)         April 25, 2034
 LTI-IO-5            $2,499,000.00          Variable(2)         April 25, 2034
 LTI-IO-6            $2,501,000.00          Variable(2)         April 25, 2034
 LTI-IO-7            $3,500,000.00          Variable(2)         April 25, 2034
 LTI-IO-8            $6,500,000.00          Variable(2)         April 25, 2034
   LTI-P                   $100.00          Variable(2)         April 25, 2034

_______________

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Group I Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates that represents one or more of the "regular interests" in
         REMIC I.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC I
         Pass-Through Rate" herein.

                                    REMIC II
                                    --------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the Group II Loans and other related assets (other
than the related Reserve Fund and the related Cap Contracts) in the Trust Fund
subject to this Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets shall be designated as "REMIC II." Component R-2 of
the Class I/II-R Certificate shall 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, the
Uncertificated REMIC II Pass-Through Rate, the initial Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC
II Regular Interests. None of the REMIC II Regular Interests will be
certificated.

                      Initial
                   Uncertificated     Uncertified REMIC II       Assumed Final
Designation      Principal Balance     Pass-Through Rate        Maturity Date(1)
-----------      -----------------     -----------------        ----------------
  LTII-1          $205,647,940.00         Variable(2)           April 25, 2034
  LTII-2          $180,828,203.00         Variable(2)           April 25, 2034
  LTII-P                  $100.00         Variable(2)           April 25, 2034

_______________

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Group II Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates that represents one or more of the "regular interests" in
         REMIC II.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC
         II Pass-Through Rate" herein.

                                    REMIC III
                                    ---------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the REMIC I Regular Interests and the REMIC II
Regular Interests as a REMIC for federal income tax purposes, and such
segregated pool of assets shall be designated as "REMIC III". Component R-3 of
the Class I/II-R Certificate shall represent the sole class of "residual
interests" in REMIC III for purposes of the REMIC Provisions under federal
income tax law. The following table irrevocably sets forth the designation, the
Uncertificated REMIC III Pass-Through Rate, the initial Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC
III Regular Interests. None of the REMIC III Regular Interests will be
certificated.

                                      -2-
<PAGE>

                  Uncertificated             Initial                 Latest
                   REMIC III              Uncertificated            Possible
Designation      Pass-Through Rate      Principal Balance          Maturity(1)
-----------      -----------------      -----------------        --------------
 LTIII-1AA          Variable(2)          $245,017,456.74         April 25, 2034
 LTIII -1A1         Variable(2)              $891,610.00         April 25, 2034
 LTIII -1A2         Variable(2)              $223,330.00         April 25, 2034
 LTIII -1A3         Variable(2)              $468,030.00         April 25, 2034
 LTIII -1A4         Variable(2)              $303,470.00         April 25, 2034
 LTIII -1A5         Variable(2)              $226,210.00         April 25, 2034
 LTIII -1A6         Variable(2)              $250,020.00         April 25, 2034
 LTIII -1M1         Variable(2)               $53,750.00         April 25, 2034
 LTIII -1M2         Variable(2)               $43,750.00         April 25, 2034
 LTIII -1M3         Variable(2)               $31,250.00         April 25, 2034
 LTIII -ZZ          Variable(2)            $2,508,936.26         April 25, 2034
LTIII -IO-A         Variable(2)                      (4)         April 25, 2034
LTIII -IO-B         Variable(2)                      (6)         April 25, 2034
  LTIII-1P          Variable(2)                  $100.00         April 25, 2034
 LTIII-2AA          Variable(2)          $189,373,310.07         April 25, 2034
 LTIII-2AR1         Variable(2)              $963,975.00         April 25, 2034
 LTIII-2AR2         Variable(2)              $847,630.00         April 25, 2034
 LTIII-2MR1         Variable(2)               $53,140.00         April 25, 2034
 LTIII-2MR2         Variable(2)               $43,480.00         April 25, 2034
 LTIII-2MR3         Variable(2)               $24,155.00         April 25, 2034
 LTIII-2ZZ          Variable(2)            $1,932,381.43         April 25, 2034
LTIII-2SUB1         Variable(2)                $1,285.28         April 25, 2034
LTIII-2GRP1         Variable(2)               $20,564.79         April 25, 2034
LTIII-2SUB2         Variable(2)                $1,130.22         April 25, 2034
LTIII-2GRP2         Variable(2)               $18,082.82         April 25, 2034
 LTIII-2XX          Variable(2)          $193,197,008.38         April 25, 2034
  LTIII-2P          Variable(2)                  $100.00         April 25, 2034

___________________

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Loan with the latest maturity date has been designated as
         the "latest possible maturity date" for each REMIC III Regular
         Interest.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC
         III Pass-Through Rate" herein. (3) REMIC III Regular Interest
         LTIII-IO-A will accrue interest at a rate of (i) for the first twelve
         Distribution Dates, 1.00% and (ii) thereafter, 0.00%.
(4)      REMIC III Regular Interest LTIII-IO-A will not have an Uncertificated
         Principal Balance, but will accrue interest on its Uncertificated
         Notional Amount, as defined herein.
(5)      REMIC III Regular Interest LTIII-IO-B will accrue interest at a rate of
         (i) for the first twenty-four Distribution Dates, 3.50% and (ii)
         thereafter, 0.00%.
(6)      REMIC III Regular Interest LTIII-IO-B will not have an Uncertificated
         Principal Balance, but will accrue interest on its Uncertificated
         Notional Amount, as defined herein.

                                    REMIC IV
                                    --------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the REMIC III Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets shall be
designated as "REMIC IV". Component R-4 of the Class I/II-R Certificate shall
represent the sole class of "residual interests" in REMIC IV for purposes of the
REMIC Provisions under federal income tax law. The following table irrevocably
sets forth the designation, the Pass-through Rate and initial Certificate
Principal Balance for each Class of Certificates which, together with the Class
R-4 Component, constitute the entire beneficial

                                      -3-
<PAGE>

interests in REMIC IV. Determined solely for purposes of satisfying Treasury
regulation section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each Class of Certificates shall be the Distribution Date in the month following
the maturity date for the Loan in the related Loan Group with the latest
maturity date:

                   Initial
                  Certificate
   Class           Principal                                     Assumed Final
 Designation        Balance           Pass-Through Rate         Maturity Date(1)
------------      -----------     --------------------------    ----------------
 Class I-A-1      $89,161,000     One Month LIBOR + 0.21% (2)    April 25, 2034
 Class I-A-2      $22,333,000              4.010%(2)             April 25, 2034
 Class I-A-3      $46,803,000              4.940% (2)            April 25, 2034
 Class I-A-4      $30,347,000              5.830% (2)            April 25, 2034
 Class I-A-5      $22,621,000              6.000% (2)            April 25, 2034
 Class I-A-6      $25,002,000              5.650% (2)            April 25, 2034
 Class I-A-IO        Notional            4.50% (2) (3)            May 25, 2006
 Class I-M-1       $5,375,000              6.000% (2)            April 25, 2034
 Class I-M-2       $4,375,000              6.000% (2)            April 25, 2034
 Class I-M-3       $3,125,000              6.000% (2)            April 25, 2034
  Class I-CE         $875,813                 (4)                April 25, 2034
  Class I-P              $100                N/A(6)              April 25, 2034
Class II-AR-1    $192,795,000     One Month LIBOR + 0.27% (2)     June 25, 2034
Class II-AR-2    $169,526,000     One Month LIBOR + 0.37% (2)     June 25, 2034
Class II-MR-1     $10,628,000     One Month LIBOR + 0.65% (2)     June 25, 2034
Class II-MR-2      $8,696,000     One Month LIBOR + 1.30% (2)     June 25, 2034
Class II-MR-3      $4,831,000     One Month LIBOR + 2.30% (2)     June 25, 2034
 Class II-CE             $143                 (5)                 June 25, 2034
  Class II-P             $100                N/A(6)               June 25, 2034

___________________

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Loan in the related Loan Group with the latest maturity
         date has been designated as the "latest possible maturity date" for
         each related Class of Certificates.
(2)      Subject to a rate cap as described herein.
(3)      The Class I-A-IO Certificates will accrue interest at their
         Pass-Through Rate on the Notional Amount of the Class I-A-IO
         Certificates calculated in accordance with the definition of "Notional
         Amount" herein. The Pass-Through Rate on the Class I-A-IO Certificates
         will equal 4.50% per annum for the first 12 months following the
         Closing Date, 3.50% per annum for the next 12 months and 0.00% per
         annum for each month thereafter. The Class I-A-IO Certificates will not
         be entitled to distributions in respect of principal. For federal
         income tax purposes, the Class I-A-IO Certificates will not have a
         Notional Amount, but will be entitled to 100% of amounts distributed on
         REMIC III Regular Interest LTIII-IO-A and REMIC III Regular Interest
         LTIII-IO-B.
(4)      The Class I-CE Certificates will not accrue interest on their
         Certificate Principal Balance, but will accrue interest at their
         Pass-Through Rate on the Notional Amount of the Class I-CE Certificates
         outstanding from time to time which shall equal the aggregate of the
         Uncertificated Principal Balances of the REMIC III Group I Regular
         Interests (other than REMIC III Regular Interest LTIII-P, REMIC III
         Regular Interest LTIII-IO-A and REMIC III Regular Interest LTIII-IO-B).
(5)      The Class II-CE Certificates will not accrue interest on their
         Certificate Principal Balance, but will accrue interest at their
         Pass-Through Rate on the Notional Amount of the Class II-CE
         Certificates outstanding from time to time which shall equal the
         aggregate of the Uncertificated Principal Balances of the REMIC III
         Group II Regular Interests (other than REMIC III Regular Interest
         LTIII-P).
(6)      The Class P Certificates are not entitled to distributions in respect
         of interest.

                                      -4-
<PAGE>

                                     REMIC V
                                     -------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the Group III Loans, Group IV Loans, Group V Loans,
Group VI Loans and Group VII Loans and other related assets (other than the
related Reserve Fund and the related Cap Contracts) in the Trust Fund subject to
this Agreement as a REMIC for federal income tax purposes, and such segregated
pool of assets shall be designated as "REMIC V." Component R-5 of the Class A-R
Certificate shall represent the sole class of "residual interests" in REMIC V
for purposes of the REMIC Provisions under federal income tax law. The following
table irrevocably sets forth the designation, the Uncertificated REMIC V
Pass-Through Rate, the initial Uncertificated Principal Balance, and solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC V Regular Interests. None
of the REMIC I Regular Interests will be certificated.

               Initial Uncertificated    Uncertified REMIC V     Assumed Final
 Designation      Principal Balance       Pass-Through Rate     Maturity Date(1)
 -----------   ----------------------     -----------------     ----------------
 LTV-IIISUB              $549.74             Variable(2)        April 25, 2034
 LTV-IIIGRP           $12,082.10             Variable(2)        April 25, 2034
  LTV-IVSUB              $289.41             Variable(2)        April 25, 2034
  LTV-IVGRP            $6,360.57             Variable(2)        April 25, 2034
  LTV-VSUB               $299.94             Variable(2)        April 25, 2034
  LTV-VGRP             $6,591.88             Variable(2)        April 25, 2034
  LTV-VISUB              $137.27             Variable(2)        April 25, 2034
  LTV-VIGRP            $3,016.84             Variable(2)        April 25, 2034
LTV-VII-1SUB             $215.45             Variable(2)        April 25, 2034
LTV-VII-1GRP           $4,735.14             Variable(2)        April 25, 2034
LTV-VII-2SUB             $601.01             Variable(2)        April 25, 2034
LTV-VII-2GRP          $13,209.11             Variable(2)        April 25, 2034
   LTV-XX        $459,908,214.54             Variable(2)        April 25, 2034
    LTV-R                $100.00             Variable(2)        April 25, 2034

_______________

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Group III-VII Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates that represents one or more of the "regular interests" in
         REMIC V.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC V
         Pass-Through Rate" herein.

                                      -5-
<PAGE>

                                    REMIC VI
                                    --------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the REMIC V Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets shall be
designated as "REMIC VI". Component R-6 of the Class AR Certificate shall
represent the sole class of "residual interests" in REMIC VI for purposes of the
REMIC Provisions under federal income tax law. The following table irrevocably
sets forth the designations, the Uncertificated REMIC VI Pass-Through Rate, the
initial Uncertificated Principal Balance, and solely for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity
date" for each of the REMIC VI Regular Interests. None of the REMIC VI Regular
Interests will be certificated.

                                                                    Latest
               Uncertificated REMIC    Initial Uncertificated      Possible
Designation    VI Pass-Through Rate      Principal Balance         Maturity(1)
-----------    --------------------    ----------------------      -----------
 LTVI-IIIA              (2)                $115,323,500.00        April 25, 2034
  LTVI-IVA              (2)                 $60,711,600.00        April 25, 2034
  LTVI-VA               (2)                 $62,919,400.00        April 25, 2034
  LTVI-VIA              (2)                 $28,795,700.00        April 25, 2034
LTVI-VIIAR2             (2)                 $45,196,900.00        April 25, 2034
LTVI-VIIAR1             (2)                $126,081,000.00        April 25, 2034
   LTVI-M               (2)                 $11,269,100.00        April 25, 2034
  LTVI-B1               (2)                  $3,219,700.00        April 25, 2034
  LTVI-B2               (2)                  $2,299,800.00        April 25, 2034
  LTVI-B3               (2)                  $1,839,800.00        April 25, 2034
  LTVI-B4               (2)                  $1,379,900.00        April 25, 2034
  LTVI-B5               (2)                    $919,903.00        April 25, 2034
   LTVI-R               (2)                        $100.00        April 25, 2034

___________________

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Group III-VII loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each REMIC VI
         Regular Interest.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC
         VI Pass-Through Rate" herein.

                                      -6-
<PAGE>

                                    REMIC VII
                                    ---------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the REMIC VI Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets shall be
designated as "REMIC VII". Component R-7 of the Class AR Certificate shall
represent the sole class of "residual interests" in REMIC VII for purposes of
the REMIC Provisions under federal income tax law. The following table
irrevocably sets forth the designation, the Pass-through Rate and initial
Certificate Principal Balance for each Class of Certificates which, together
with the Class R-7 Component, constitute the entire beneficial interests in
REMIC VII. Determined solely for purposes of satisfying Treasury regulation
section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for each Class
of Certificates shall be the Distribution Date in the month following the
maturity date for the Group III-VII Loan with the latest maturity date.

                    Initial Certificate                          Assumed Final
Class Designation    Principal Balance     Pass-Through Rate    Maturity Date(1)
-----------------    -----------------     -----------------    ----------------
   Class III-A           $115,323,500.00          (2)            April 25, 2034
    Class IV-A            $60,711,600.00          (2)            April 25, 2034
    Class V-A             $62,919,400.00          (2)            April 25, 2034
  Class VI-AR-1           $28,795,700.00          (2)            April 25, 2034
  Class VII-AR-1          $45,196,900.00          (2)            April 25, 2034
  Class VII-AR-2         $126,081,000.00          (2)            April 25, 2034
  Class VII-AR-3             Notional             (2)             May 25, 2006
     Class M              $11,269,100.00          (2)            April 25, 2034
    Class B-1              $3,219,700.00          (2)            April 25, 2034
    Class B-2              $2,299,800.00          (2)            April 25, 2034
    Class B-3              $1,839,800.00          (2)            April 25, 2034
    Class B-4              $1,379,900.00          (2)            April 25, 2034
    Class B-5                $919,903.00          (2)            April 25, 2034
    Class A-R                    $100.00          (2)            April 25, 2034

___________________

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Group III-VII Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates.
(2)      As defined in the definition of Pass-Through Rate herein.

                                      -7-
<PAGE>

                               W I T N E S S E T H

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

ARTICLE I
                                   DEFINITIONS

Section 1.1       DEFINITIONS.

         Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article:

         ACCEPTED MASTER SERVICING PRACTICES: With respect to any Loan, as
applicable, those customary mortgage servicing practices of prudent mortgage
servicing institutions that master service mortgage loans of the same type and
quality as such Loan in the jurisdiction where the related Mortgaged Property is
located, to the extent applicable to the Master Servicer (except in its capacity
as successor to a Servicer).

         ACCOUNT: The Distribution Accounts and any Protected Account as the
context may require.

         ADJUSTABLE RATE CERTIFICATES: The Class I-A-1, Group II Senior, Group
II Mezzanine, Class VII-AR-1 and Class VII-AR-2 Certificates, collectively.

         ADJUSTABLE RATE LOAN: Each of the Group II Loans and Group III-VII
Loans.

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

         ADVANCE: Either (i) a Monthly Advance made by a Servicer as such term
is defined in and pursuant to the related Servicing Agreement or (ii) an advance
made by the Master Servicer pursuant to Section 4.9.

         AFFILIATE: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may obtain
and rely on an Officer's Certificate of any Servicer or the Depositor to
determine whether any Person is an Affiliate of such party.

         AGGREGATE SENIOR PERCENTAGE: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Certificate Principal Balance of the Group III-VII Senior Certificates
immediately prior to that Distribution Date, and the

                                      -8-
<PAGE>

denominator of which is the sum of the Principal Balances of the Group III-VII
Loans as of the first day of the related Due Period.

         AGGREGATE SUBORDINATE AMOUNT: For any date of determination will equal
the excess of the aggregate Principal Balance of the Group III-VII Loans over
the aggregate Certificate Principal Balance of the Group III-VII Senior
Certificates then outstanding.

         AGGREGATE SUBORDINATE PERCENTAGE: With respect to any Distribution Date
and the Group III-VII Subordinate Certificates will equal 100% minus the
Aggregate Senior Percentage for that Distribution Date.

         AGREEMENT: This Pooling and Servicing Agreement and all amendments and
supplements hereto.

         ALLOCATED REALIZED LOSS AMOUNT: With respect to any class of Group I
Mezzanine Certificates or Group II Mezzanine Certificates and any Distribution
Date, an amount equal to the sum of any Realized Loss allocated to that Class of
Certificates on such Distribution Date and any Allocated Realized Loss Amount
for that Class remaining unpaid from the previous Distribution Date.

         ANNIVERSARY: Each anniversary of the Cut-Off Date.

         APPRAISED VALUE: The amount set forth in an appraisal made by or for
the mortgage originator in connection with its origination of each Loan.

         ASSIGNMENT: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located to reflect of
record the sale and assignment of the Loan to the Trustee, which assignment,
notice of transfer or equivalent instrument may, if permitted by law, be in the
form of one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county.

         ASSIGNMENT AGREEMENTS: Shall mean (i) the Assignment, Assumption and
Recognition Agreement, dated as of May 27, 2004, among the Seller, the Depositor
and Greenpoint pursuant to which the Greenpoint Servicing Agreement was assigned
to the Depositor, (ii) the Assignment, Assumption and Recognition Agreement,
dated as of May 27, 2004, among the Seller, the Depositor and M&T, pursuant to
which the M&T Servicing Agreement was assigned to the Depositor, (iii) the
Assignment, Assumption and Recognition Agreement, dated as of May 27, 2004 among
the Seller, the Depositor, Countrywide and Countrywide Servicing pursuant to
which (a) the Countrywide Servicing Agreement was assigned to the Depositor and
(b) Countrywide Servicing agreed to service the related Loans pursuant to the
Countrywide Servicing Agreement, (iv) the Assignment, Assumption and Recognition
Agreement, dated as of May 27, 2004, among the Seller, the Depositor and
National City pursuant to which the National City Servicing Agreement was
assigned to the Depositor, (v) the Assignment, Assumption and Recognition
Agreement, dated as of May 27, 2004, among the Seller, the Depositor and GMAC,
pursuant to which the GMAC Servicing Agreement was assigned to the Depositor and
(vi) the Assignment, Assumption and Recognition Agreement, dated as of May 27,
2004, among the

                                      -9-
<PAGE>

Seller, the Depositor and Chase, pursuant to which the Chase Servicing Agreement
was assigned to the Depositor.

         AUTHORIZED DENOMINATION: With respect to the Class A Certificates,
Mezzanine Certificates and Class B Certificates, minimum initial Certificate
Principal Balances of $25,000 and integral multiples of $1.00 in excess thereof.
With respect to the Class P Certificates, minimum initial Certificate Principal
Balances of $20 and integral multiples thereof. With respect to the Class CE
Certificates, minimum initial Certificate Principal Balances of $10,000 and
integral multiples of $1.00 in excess thereof. With respect to the Residual
Certificates, a single denomination of 100% interest in such Certificate.

         AVAILABLE DISTRIBUTION AMOUNT: The Group I Available Distribution
Amount, Group II Available Distribution Amount, Group III Available Distribution
Amount, Group IV Available Distribution Amount, Group V Available Distribution
Amount, Group VI Available Distribution Amount and Group VII Available
Distribution Amount, as applicable.

         BANKRUPTCY COVERAGE: As of the Cut-Off Date, approximately $150,286.
Bankruptcy Coverage will be reduced, from time to time, by the amount of
Bankruptcy Losses allocated to the Group III-VII Certificates.

         BANKRUPTCY LOSS: A loss on a Loan as reported by the related Servicer,
arising out of (i) a reduction in the scheduled Monthly Payment for such Loan by
a court of competent jurisdiction in a case under the United States Bankruptcy
Code, other than any such reduction that arises out of clause (ii) of this
definition of "Bankruptcy Loss," including, without limitation, any such
reduction that results in a permanent forgiveness of principal, or (ii) with
respect to any Loan, the positive difference, if any, resulting from the
outstanding Principal Balance on a Loan and the valuation, by a court of
competent jurisdiction in a case under such Bankruptcy Code, of the related
Mortgaged Property.

         BARCLAYS:  Barclays Bank PLC, or any successor thereto.

         BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a Depository Participant or an Indirect
Depository Participant or a Person holding a beneficial interest in any
Definitive Certificate.

         BOOK-ENTRY CERTIFICATES: The Class A Certificates, Mezzanine
Certificates, Class B-1 Certificates and Class B-2 Certificates, beneficial
ownership and transfers of which shall be made through book entries as described
in Section 5.1 and Section 5.3.

         BUSINESS DAY: Any day other than a Saturday, a Sunday, or a day on
which banking institutions in Maryland, Minnesota or New York are authorized or
obligated by law or executive order to be closed.

         CAP CONTRACTS: Any of the Class I-A-1 Cap Contract, Class II-AR-1 Cap
Contract, Class II-AR-2 Cap Contract, Class II-MR-1 Cap Contract, Class II-MR-2
Cap Contract, Class II-MR-3 Cap Contract, Class VII-AR-1 Cap Contract and Class
VII-AR-2 Cap Contract.

                                      -10-
<PAGE>

         CERTIFICATE: Any one of the Certificates issued pursuant to this
Agreement, executed and authenticated by or on behalf of the Securities
Administrator hereunder in substantially one of the forms set forth in Exhibits
A-1, A-2, A-3, A-4, A-5, A-6, A-7 and A-8 hereto.

         CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate as reflected on the books of the
Depository or on the books of a Depository Participant or on the books of an
Indirect Depository Participant.

         CERTIFICATE PRINCIPAL BALANCE: With respect to a Class A Certificate
(other than the Class I-A-IO Certificates and Class VII-AR-3 Certificates, which
have no Certificate Principal Balance), Class B Certificate, Mezzanine
Certificate or Class P Certificate outstanding at any time, the then maximum
amount that the holder of such certificate is entitled to receive as
distributions allocable to principal from the cash flow on the related Loans and
the other assets in the Trust Fund. The Certificate Principal Balance of a
Senior Certificate, Mezzanine Certificate, Class B Certificate or Class P
Certificate as of any date of determination is equal to the initial Certificate
Principal Balance of such Certificate plus, in the case of a Group III-VII
Certificate, any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 4.6, reduced by the aggregate of
(i) all amounts allocable to principal previously distributed with respect to
that Certificate and (ii) any reductions in the Certificate Principal Balance of
such certificate deemed to have occurred in connection with allocations of
Realized Losses, if any. The Certificate Principal Balance of each Class CE
Certificate as of any date of determination is equal to the excess, if any, of
(i) the then aggregate Principal Balance of the related Loans over (ii) the then
aggregate Certificate Principal Balance of the related Senior Certificates, the
related Mezzanine Certificates and the related Class P Certificates. The initial
Certificate Principal Balance of each Class of Certificates is set forth in the
Preliminary Statement hereto.

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.3.

         CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, except that solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor, the Master Servicer, the Securities Administrator, the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Percentage Interests necessary
to effect any such consent has been obtained. The Trustee or the Securities
Administrator may conclusively rely upon a certificate of the Depositor, the
Seller or the Master Servicer in determining whether a Certificate is held by an
Affiliate thereof. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee or the
Securities Administrator shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.

         CHASE:  Chase Manhattan Mortgage Corporation or any successor thereto.

         CHASE SERVICING AGREEMENT: The Mortgage Loan Purchase, Warranties and
Servicing Agreement, dated as of December 1, 2002, between DBNY and Chase, as
assigned by DBNY to

                                      -11-
<PAGE>

Seller pursuant to that certain Assignment, Assumption and Recognition
Agreement, dated as of May 27, 2004, among the Seller, DBNY and Chase, and as
modified pursuant to the related Assignment Agreement.

         CLASS: All Certificates having the same priority and rights to payments
from the related Available Distribution Amount, designated as a separate Class,
as set forth in the forms of Certificates attached hereto as Exhibits A-1, A-2,
A-3, A-4, A-5, A-6, A-7 and A-8, as applicable.

         CLASS A CERTIFICATES: The Class I-A-1, I-A-2, I-A-3, I-A-4, I-A-5,
I-A-6, I-A-IO, II-AR-1, II-AR-2, III-AR-1, IV-AR-1, V-AR-1, VI-AR-1, VII-AR-1,
VII-AR-2 and VII-AR-3 Certificates, collectively.

         CLASS B CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates, collectively.

         CLASS CE CERTIFICATES: The Class I-CE Certificates and Class II-CE
Certificates, collectively, and designated as such on the face thereof in
substantially the form attached hereto as Exhibit A-4.

         CLASS I-A-1 CAP CONTRACT: The cap contract between the Trustee and
DBNY, for the benefit of the Holders of the Class I-A-1 Certificates.

         CLASS I-A-6 LOCKOUT DISTRIBUTION AMOUNT: For any Distribution Date
shall be the Class I-A-6 Lockout Distribution Percentage for that Distribution
Date multiplied by the product of (x) a fraction, the numerator of which is the
Certificate Principal Balance of the Class I-A-6 Certificates and the
denominator of which is the aggregate Certificate Principal Balance of all of
the Group I Senior Certificates, in each case immediately prior to such
Distribution Date and (y) the Group I Senior Principal Distribution Amount for
such Distribution Date.

         CLASS I-A-6 LOCKOUT DISTRIBUTION PERCENTAGE: For each Distribution
Date, the applicable percentage set forth below:

                                                     CLASS I-A-6 LOCKOUT
            DISTRIBUTION DATES                      DISTRIBUTION PERCENTAGE
            ------------------                      -----------------------

  June 2004 through and including May 2007                     0%
  June 2007 through and including May 2009                    45%
  June 2009 through and including May 2010                    80%
  June 2010 through and including May 2011                   100%
  June 2011 and thereafter                                   300%

         CLASS I-M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the remaining Group I Principal Distribution

                                      -12-
<PAGE>

Amount for that Distribution Date after distribution of the Group I Senior
Principal Distribution Amount or (ii) on or after the Group I Stepdown Date if a
Group I Trigger Event is not in effect for that Distribution Date, the lesser
of:

         o        the remaining Group I Principal Distribution Amount for that
                  Distribution Date after distribution of the Group I Senior
                  Principal Distribution Amount; and

         o        the excess of (A) the aggregate Certificate Principal Balance
                  of the Class I-M-1 Certificates immediately prior to that
                  Distribution Date over (B) the positive difference between (i)
                  the aggregate Principal Balance of the Group I Loans as of the
                  last day of the related Due Period (after reduction for
                  Realized Losses on the Group I Loans incurred during the
                  related Prepayment Period) and (ii) the sum of (x) the
                  aggregate Certificate Principal Balance of the Group I Senior
                  Certificates (after taking into account the payment of the
                  Group I Senior Principal Distribution Amount for such
                  Distribution Date) and (y) the product of (a) the aggregate
                  Principal Balance of the Group I Loans as of the last day of
                  the related Due Period (after reduction for Realized Losses on
                  the Group I Loans incurred during the related Prepayment
                  Period) and (b) the sum of 6.00% and the related Required
                  Overcollateralization Percentage.

         CLASS I-M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Group I Senior Principal
Distribution Amount and the Class I-M-1 Principal Distribution Amount or (ii) on
or after the Group I Stepdown Date if a Group I Trigger Event is not in effect
for that Distribution Date, the lesser of:

         o        the remaining Group I Principal Distribution Amount for that
                  Distribution Date after distribution of the Group I Senior
                  Principal Distribution Amount and the Class I-M-1 Principal
                  Distribution Amount; and

         o        the excess of (A) the aggregate Certificate Principal Balance
                  of the Class I-M-2 Certificates immediately prior to that
                  Distribution Date over (B) the positive difference between (i)
                  the aggregate Principal Balance of the Group I Loans as of the
                  last day of the related Due Period (after reduction for
                  Realized Losses on the Group I Loans incurred during the
                  related Prepayment Period) and (ii) the sum of (x) the
                  aggregate Certificate Principal Balance of the Group I Senior
                  Certificates and the Class I-M-1 Certificates (after taking
                  into account the payment of the Group I Senior Principal
                  Distribution Amount and the Class I-M-1 Principal Distribution
                  Amount for such Distribution Date) and (y) the product of (a)
                  the aggregate Principal Balance of the Group I Loans as of the
                  last day of the related Due Period (after reduction for
                  Realized Losses on the Group I Loans incurred during the
                  related Prepayment Period) and (b) the sum of 2.50% and the
                  related Required Overcollateralization Percentage.

         CLASS I-M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the remaining Group I Principal Distribution

                                      -13-
<PAGE>

Amount for that Distribution Date after distribution of the Group I Senior
Principal Distribution Amount, the Class I-M-1 Principal Distribution Amount and
the Class I-M-2 Principal Distribution Amount or (ii) on or after the Group I
Stepdown Date if a Group I Trigger Event is not in effect for that Distribution
Date, the lesser of:

         o        the remaining Group I Principal Distribution Amount for that
                  Distribution Date after distribution of the Group I Senior
                  Principal Distribution Amount, the Class I-M-1 Principal
                  Distribution Amount and the Class I-M-2 Principal Distribution
                  Amount; and

         o        the excess of (A) the aggregate Certificate Principal Balance
                  of the Class I-M-3 Certificates immediately prior to that
                  Distribution Date over (B) the positive difference between (i)
                  the aggregate Principal Balance of the Group I Loans as of the
                  last day of the related Due Period (after reduction for
                  Realized Losses on the Group I Loans incurred during the
                  related Prepayment Period) and (ii) the sum of (x) the
                  aggregate Certificate Principal Balance of the Group I Senior,
                  Class I-M-1 and Class I-M-2 Certificates (after taking into
                  account the payment of the Group I Senior Principal
                  Distribution Amount, the Class I-M-1 Principal Distribution
                  Amount and the Class I-M-2 Principal Distribution Amount for
                  such Distribution Date) and (y) the product of (a) the
                  aggregate Principal Balance of the Group I Loans as of the
                  last day of the related Due Period (after reduction for
                  Realized Losses on the Group I Loans incurred during the
                  related Prepayment Period) and (b) the related Required
                  Overcollateralization Percentage.

         CLASS I/II-R CERTIFICATE: The Certificate designated as "Class I/II-R"
on the face thereof in substantially the form attached hereto as Exhibit A-7,
which has been designated as the sole class of "residual interests" in REMIC I,
REMIC II, REMIC III and REMIC IV, pursuant to Section 2.4.

         CLASS I/II-R CERTIFICATEHOLDER: The registered Holder of the Class
I/II-R Certificate.

         CLASS II-AR-1 ALLOCATION PERCENTAGE: For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is (x) the Group II
Principal Remittance Amount attributable to the Group II-1 Loans for such
Distribution Date and the denominator of which is (y) the Group II Principal
Remittance Amount for such Distribution Date.

         CLASS II-AR-1 CAP CONTRACT: Shall mean the cap agreement between the
Trustee and Swiss Re, for the benefit of the Holders of the Class II-AR-1
Certificates.

         CLASS II-AR-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the Group II-1 Principal Distribution Amount, or (ii) on or
after the Group II Stepdown Date if a Group II Trigger Event is not in effect
for that Distribution Date, the lesser of:

         o        the Group II-1 Principal Distribution Amount for that
                  Distribution Date; and

                                      -14-
<PAGE>

         o        the product of the Class II-AR-1 Allocation Percentage and the
                  excess (if any) of (A) the sum of the Certificate Principal
                  Balances of the Class II-AR-1 Certificates and Class II-AR-2
                  Certificates immediately prior to such Distribution Date over
                  (B) the positive difference between (i) the aggregate
                  Principal Balance of the Group II Loans as of the last day of
                  the related Due Period (after reduction for Realized Losses on
                  the Group II Loans incurred during the related Prepayment
                  Period) and (ii) the product of (x) aggregate Principal
                  Balance of the Group II Loans as of the last day of the
                  related Due Period (after reduction for Realized Losses on the
                  Group II Loans incurred during the related Prepayment Period)
                  and (y) the sum of (A) 12.50% and (B) the related Required
                  Overcollateralization Percentage.

         CLASS II-AR-2 ALLOCATION PERCENTAGE: For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is (x) the Group II
Principal Remittance Amount attributable to the Group II-2 Loans for such
Distribution Date and the denominator of which is (y) the Group II Principal
Remittance Amount for such Distribution Date.

         CLASS II-AR-2 CAP CONTRACT: The cap agreement between the Trustee and
Swiss Re, for the benefit of the Holders of the Class II-AR-2 Certificates.

         CLASS II-AR-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the Group II-2 Principal Distribution Amount, or (ii) on or
after the Group II Stepdown Date if a Group II-2 Trigger Event is not in effect
for that Distribution Date, the lesser of:

         o        the Group II-2 Principal Distribution Amount for that
                  Distribution Date; and

         o        the product of the Class II-AR-2 Allocation Percentage and the
                  excess (if any) of (A) the sum of the Certificate Principal
                  Balances of the Class II-AR-1 Certificates and Class II-AR-2
                  Certificates immediately prior to such Distribution Date over
                  (B) the positive difference between (i) the aggregate
                  Principal Balance of the Group II Loans as of the last day of
                  the related Due Period (after reduction for Realized Losses on
                  the Group II Loans incurred during the related Prepayment
                  Period) and (ii) the product of (x) aggregate Principal
                  Balance of the Group II Loans as of the last day of the
                  related Due Period (after reduction for Realized Losses on the
                  Group II Loans incurred during the related Prepayment Period)
                  and (y) the sum of (A) 12.50% and (B) the related Required
                  Overcollateralization Percentage.

         CLASS II-MR-1 CAP CONTRACT: Shall mean the cap agreement between the
Trustee and Swiss Re, for the benefit of the Holders of the Class II-MR-1
Certificates.

         CLASS II-MR-1 PRINCIPAL DISTRIBUTION AMOUNT With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Group II Senior Principal

                                      -15-
<PAGE>

Distribution Amount or (ii) on or after the Group II Stepdown Date if a Group II
Trigger Event is not in effect for that Distribution Date, the lesser of:

         o        the remaining Group II Principal Distribution Amount for that
                  Distribution Date after distribution of the Group II Senior
                  Principal Distribution Amount; and

         o        the excess of (A) the aggregate Certificate Principal Balance
                  of the Class II-MR-1 Certificates immediately prior to that
                  Distribution Date over (B) the positive difference between (i)
                  the aggregate Principal Balance of the Group II Loans as of
                  the last day of the related Due Period (after reduction for
                  Realized Losses on the Group II Loans incurred during the
                  related Prepayment Period) and (ii) the sum of (x) the
                  aggregate Certificate Principal Balance of the Group II Senior
                  Certificates (after taking into account the payment of the
                  Group II Senior Principal Distribution Amount for such
                  Distribution Date) and (y) the product of (a) the aggregate
                  Principal Balance of the Group II Loans as of the last day of
                  the related Due Period (after reduction for Realized Losses on
                  the Group II Loans incurred during the related Prepayment
                  Period) and (b) the sum of 7.00% and the related Required
                  Overcollateralization Percentage.

         CLASS II-MR-2 CAP CONTRACT: The cap agreement between the Trustee and
Swiss Re, for the benefit of the Holders of the Class II-MR-2 Certificates.

         CLASS II-MR-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Group II Senior Principal
Distribution Amount and the Class II-MR-1 Principal Distribution Amount or (ii)
on or after the Group II Stepdown Date if a Group II Trigger Event is not in
effect for that Distribution Date, the lesser of:

         o        the remaining Group II Principal Distribution Amount for that
                  Distribution Date after distribution of the Group II Senior
                  Principal Distribution Amount and the Class II-MR-1 Principal
                  Distribution Amount; and

         o        the excess of (A) the aggregate Certificate Principal Balance
                  of the Class II-MR-2 Certificates immediately prior to that
                  Distribution Date over (B) the positive difference between (i)
                  the aggregate Principal Balance of the Group II Loans as of
                  the last day of the related Due Period (after reduction for
                  Realized Losses on the Group II Loans incurred during the
                  related Prepayment Period) and (ii) the sum of (x) the
                  aggregate Certificate Principal Balance of the Group II Senior
                  Certificates and the Class II-MR-1 Certificates (after taking
                  into account the payment of the Group II Senior Principal
                  Distribution Amount and the Class II-MR-1 Principal
                  Distribution Amount for such Distribution Date) and (y) the
                  product of (a) the aggregate Principal Balance of the Group II
                  Loans as of the last day of the related Due Period (after
                  reduction for Realized Losses on the Group II Loans incurred
                  during the related Prepayment Period) and (b) the sum of 2.50%
                  and the related Required Overcollateralization Percentage.

                                      -16-
<PAGE>

         CLASS II-MR-3 CAP CONTRACT: The cap agreement between the Trustee and
Swiss Re, for the benefit of the Holders of the Class II-MR-3 Certificates.

         CLASS II-MR-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Group II Senior Principal
Distribution Amount, the Class II-MR-1 Principal Distribution Amount and the
Class II-MR-2 Principal Distribution Amount or (ii) on or after the Group II
Stepdown Date if a Group II Trigger Event is not in effect for that Distribution
Date, the lesser of:

         o        the remaining Group II Principal Distribution Amount for that
                  Distribution Date after distribution of the Group II Senior
                  Principal Distribution Amount, the Class II-MR-1 Principal
                  Distribution Amount and the Class II-MR-2 Principal
                  Distribution Amount; and

         o        the excess of (A) the aggregate Certificate Principal Balance
                  of the Class II-MR-3 Certificates immediately prior to that
                  Distribution Date over (B) the positive difference between (i)
                  the aggregate Principal Balance of the Group II Loans as of
                  the last day of the related Due Period (after reduction for
                  Realized Losses on the Group II Loans incurred during the
                  related Prepayment Period) and (ii) the sum of (x) the
                  aggregate Certificate Principal Balance of the Group II
                  Senior, Class II-MR-1 and Class II-MR-2 Certificates (after
                  taking into account the payment of the Group II Senior
                  Principal Distribution Amount, the Class II-MR-1 Principal
                  Distribution Amount and the Class II-MR-2 Principal
                  Distribution Amount for such Distribution Date) and (y) the
                  product of (a) the aggregate Principal Balance of the Group II
                  Loans as of the last day of the related Due Period (after
                  reduction for Realized Losses on the Group II Loans incurred
                  during the related Prepayment Period) and (b) the related
                  Required Overcollateralization Percentage.

         CLASS P CERTIFICATES: The Class I-P Certificates and Class II-P
Certificates, collectively, and designated as such on the face thereof in
substantially the form attached hereto as Exhibit A-6.

         CLASS VII-AR-1 CAP CONTRACT: The cap agreement between the Trustee and
Barclays for the benefit of the Holders of the Class VII-AR-1 Certificates.

         CLASS VII-AR-2 CAP CONTRACT: The cap agreement between the Trustee and
Barclays for the benefit of the Holders of the Class VII-AR-2 Certificates.

         CLASS VII-AR-3 NOTIONAL AMOUNT: The Notional Amount of the Class
VII-AR-3 Certificates as set forth in the definition of Notional Amount.

         CLEANUP CALL: As defined in Section 9.1.

         CLEARING AGENCY: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
which initially shall be the Depository.

                                      -17-
<PAGE>

         CLEARING AGENCY PARTICIPANT: A broker, dealer, bank, other financial
institution or other Person for whom the Clearing Agency effects book-entity
transfers and pledges of securities deposited with the Clearing Agency.

         CLEARSTREAM: Clearstream, Luxembourg, societe anonyme (formerly known
as Cedelbank) a corporation organized under the laws of Duchy of Luxembourg.

         CLOSING DATE: May 27, 2004.

         CODE: The Internal Revenue Code of 1986, as amended.

         COMPENSATING INTEREST: For any Distribution Date, (i) with respect to
the Loans serviced by each of GMAC, M&T, Greenpoint and Chase, an amount equal
to the lesser of (a) the aggregate Prepayment Interest Shortfalls and
Curtailment Shortfalls for the Loans serviced by GMAC, M&T, Greenpoint and
Chase, respectively, for such Distribution Date and (b) the Servicing Fee
payable to GMAC, M&T, Greenpoint and Chase, respectively, for such Distribution
Date, (ii) with respect to each Loan serviced by Countrywide, an amount equal to
the lesser of one-half of (a) one-twelfth of the product of (i) the servicing
fee rate set forth in the Countrywide Servicing Agreement and (ii) the Scheduled
Principal Balance of such Loan or (b) the aggregate servicing fee actually
received by Countrywide for such month, (iii) with respect to each Loan serviced
by National City, the aggregate Prepayment Interest Shortfalls and Curtailment
Shortfalls for such Loans for such Distribution Date and (iv) with respect to
the Master Servicer, the amount described in Section 3.20 for such Distribution
Date.

         COMPONENT R-1: The uncertificated residual interest in REMIC I.

         COMPONENT R-2: The uncertificated residual interest in REMIC II.

         COMPONENT R-3: The uncertificated residual interest in REMIC III.

         COMPONENT R-4: The uncertificated residual interest in REMIC IV.

         COMPONENT R-5: The uncertificated residual interest in REMIC V.

         COMPONENT R-6: The uncertificated residual interest in REMIC VI.

         COMPONENT R-7: The uncertificated residual interest in REMIC VII.

         CORPORATE TRUST OFFICE: The principal corporate trust office of the
Trustee or the Securities Administrator, as the case may be, at which at any
particular time its corporate trust business in connection with this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at (i) with respect to the Trustee, HSBC Bank USA, 452
Fifth Avenue, New York, New York 10018, or at such other address as the Trustee
may designate from time to time by notice to the Certificateholders, the
Depositor, the Master Servicer and the Securities Administrator, or (ii) with
respect to the Securities Administrator, (A) for Certificate transfer and
surrender purposes, Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: DMSI 2004-4 and (B) for all other
purposes, Wells Fargo Bank, N.A., 9062 Old Annapolis Road, Columbia, Maryland
21045, Attention: DMSI 2004-4, or at such other address as the Securities
Administrator may designate

                                      -18-
<PAGE>

from time to time by notice to the Certificateholders, the Depositor, the Master
Servicer and the Trustee.

         CORRESPONDING CERTIFICATE: With respect to:

               (i)    REMIC III Regular Interest LTIII-1A1, the Class I-A-1
                      Certificates,

               (ii)   REMIC III Regular Interest LTIII-1A2, the Class I-A-2
                      Certificates,

               (iii)  REMIC III Regular Interest LTIII-1A3, the Class I-A-3
                      Certificates,

               (iv)   REMIC III Regular Interest LTIII-1A4, the Class I-A-4
                      Certificates,

               (v)    REMIC III Regular Interest LTIII-1A5, the Class I-A-5
                      Certificates,

               (vi)   REMIC III Regular Interest LTIII-1A6, the Class I-A-6
                      Certificates,

               (vii)  REMIC III Regular Interest LTIII-1M1, the Class I-M-1
                      Certificates,

               (viii) REMIC III Regular Interest LTIII-1M2, the Class I-M-2
                      Certificates,

               (ix)   REMIC III Regular Interest LTIII-1M3, the Class I-M-3
                      Certificates,

               (x)    REMIC III Regular Interest LTIII-1P, the Class I-P
                      Certificates,

               (xi)   REMIC III Regular Interest LTIII-2AR1, the Class II-AR-1
                      Certificates,

               (xii)  REMIC III Regular Interest LTIII-2AR2, the Class II-AR-2
                      Certificates,

               (xiii) REMIC III Regular Interest LTIII-2MR1, the Class II-MR-1
                      Certificates,

               (xiv)  REMIC III Regular Interest LTIII-2MR2, the Class II-MR-2
                      Certificates,

               (xv)   REMIC III Regular Interest LTIII-2MR3, the Class II-MR-3
                      Certificates,

               (xvi)  REMIC III Regular Interest LTIII-2P, the Class II-P
                      Certificates,

               (xvii) REMIC VI Regular Interest LTVI-IIIA, the Class III-AR-1
                      Certificates,

               (xviii) REMIC VI Regular Interest LTVI-IVA, the Class IV-AR-1
                      Certificates,

               (xix)  REMIC VI Regular Interest LTVI-VA, the Class V-AR-1
                      Certificates,

               (xx)   REMIC VI Regular Interest LTVI-VIA, the Class VI-AR-1
                      Certificates,

               (xxi)  REMIC VI Regular Interest LTVI-VII-AR1, the Class VII-AR-1
                      Certificates,

               (xxii) REMIC VI Regular Interest LTVI-VII-AR2, the Class VII-AR-2
                      Certificates,

                                      -19-
<PAGE>

               (xxiii) REMIC VI Regular Interest LTVI-M, the Class M
                      Certificates,

               (xxiv) REMIC VI Regular Interest LTVI-B1, the Class B-1
                      Certificates,

               (xxv)  REMIC VI Regular Interest LTVI-B2, the Class B-2
                      Certificates,

               (xxvi) REMIC VI Regular Interest LTVI-B3, the Class B-3
                      Certificates,

               (xxvii) REMIC VI Regular Interest LTVI-B4, the Class B-4
                      Certificates,

               (xxviii) REMIC VI Regular Interest LTVI-B5, the Class B-5
                      Certificates, and

               (xxix) REMIC VI Regular Interest LTVI-R, the Class A-R
                      Certificates.

         COUNTRYWIDE:  Countrywide Home Loans, Inc., or any successor thereto.

         COUNTRYWIDE SERVICING: Countrywide Home Loans Servicing L.P., or any
successor thereto.

         COUNTRYWIDE SERVICING AGREEMENT: The Master Non-conforming Mortgage
Loan Purchase and Servicing Agreement, dated as of May 1, 2004, between the
Seller and Countrywide (as modified pursuant to the related Assignment
Agreement). Pursuant to the related Assignment Agreement, among other things,
Countrywide assigned its rights and obligations with respect to the servicing of
the related Loans to Countrywide Servicing.

         CREDIT RISK MANAGEMENT AGREEMENT OR CREDIT RISK MANAGEMENT AGREEMENTS:
Each agreement between the Credit Risk Manager and Greenpoint, M&T, GMAC, Chase
or the Master Servicer, regarding the loss mitigation and advisory services to
be provided by the Credit Risk Manager.

         CREDIT RISK MANAGEMENT FEE: The amount payable to the Credit Risk
Manager on each Distribution Date as compensation for all services rendered by
it in the exercise and performance of any and all powers and duties of the
Credit Risk Manager under any Credit Risk Management Agreement, which amount
shall equal one twelfth of the product of (i) the Credit Risk Management Fee
Rate multiplied by (ii) the aggregate Scheduled Principal Balance of the Group I
Loans and Group II Loans and any related REO Properties as of the first day of
the related Due Period.

         CREDIT RISK MANAGEMENT FEE RATE: 0.01% per annum.

         CREDIT RISK MANAGER: The Murrayhill Company, a Colorado corporation,
and its successors and assigns.

         CREDIT SUPPORT DEPLETION DATE: The Distribution Date on which the
Certificate Principal Balances of all of the Group III-VII Subordinate
Certificates have been reduced to zero (prior to giving effect to distributions
of principal and allocations of Realized Losses on the Group III-VII Loans on
such Distribution Date).

                                      -20-
<PAGE>

         CURTAILMENT: Any voluntary payment of principal on a Loan, made by or
on behalf of the related Mortgagor, other than a Monthly Payment, a Prepaid
Monthly Payment or a Payoff, which is applied to reduce the outstanding
Principal Balance of the Loan.

         CURTAILMENT SHORTFALL: With respect to any Distribution Date and any
Curtailment received during the related Prepayment Period, an amount equal to
one month's interest on such Curtailment at the applicable Mortgage Interest
Rate on such Loan, net of the related Servicing Fee Rate.

         CUSTODIAL AGREEMENT: The Custodial Agreement dated as of May 1, 2004,
among the Trustee, Wells Fargo as Custodian, M&T, Chase, GMAC, Countrywide,
National City and Greenpoint as such agreement may be amended or supplemented
from time to time, or any other custodial agreement entered into after the date
hereof with respect to any Loan subject to this Agreement.

         CUSTODIAN: Either Wells Fargo or any other custodian appointed under
any custodial agreement entered into after the date of this Agreement.

         CUT-OFF DATE: May 1, 2004; except that with respect to each Substitute
Loan, the Cut-Off Date shall be the date of substitution.

         DBNY:  Deutsche Bank AG New York Branch, or any successor thereto.

         DEFINITIVE CERTIFICATES: As defined in Section 5.1.

         DELETED LOAN: A Loan replaced or to be replaced by a Substitute Loan.

         DELINQUENCY PERCENTAGE: With respect to any Loan Group, as of the last
day of the related Due Period, the percentage equivalent of a fraction, the
numerator of which is the Principal Balance of all related Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Principal
Balance of the related Loans and REO Properties as of the last day of the
previous calendar month.

         DEPOSITOR: Deutsche Mortgage Securities, Inc., a Delaware corporation,
or its successor-in-interest.

         DEPOSITORY: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository, for purposes of
registering those Certificates that are to be Book-Entry Certificates, is CEDE &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York and a
Clearing Agency.

         DEPOSITORY AGREEMENT: The Letter of Representations, dated May 27, 2004
by and among the Depository, the Depositor and the Trustee.

                                      -21-
<PAGE>

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

         DETERMINATION DATE: With respect to each Servicer, the day of the month
set forth as the Determination Date in the related Servicing Agreement.

         DISQUALIFIED ORGANIZATION: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code, and, for purposes of Article V herein, any
Person which is not a Permitted Transferee; provided, that a Disqualified
Organization does not include any Pass-Through Entity which owns or holds a
Residual Certificate and if which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary.

         DISTRIBUTION ACCOUNT: Each trust account or accounts related to the
Group I Loans, each trust account or accounts related to the Group II Loans and
each trust account or accounts related to the Group III-VII Loans, in each case
created and maintained by the Securities Administrator pursuant to Section 3.23
for the benefit of the related Certificateholders and designated "Wells Fargo
Bank, N.A., as Securities Administrator, in trust for registered holders of
Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series 2004-4, Group I
Certificates", "Wells Fargo Bank, N.A., as Securities Administrator, in trust
for registered holders of Deutsche Mortgage Securities, Inc. Mortgage Loan
Trust, Series 2004-4, Group II Certificates" and "Wells Fargo Bank, N.A., as
Securities Administrator, in trust for registered holders of Deutsche Mortgage
Securities, Inc. Mortgage Loan Trust, Series 2004-4, Group III-VII
Certificates", respectively. Funds in each Distribution Account shall be held in
trust for the related Certificateholders for the uses and purposes set forth in
this Agreement. Each Distribution Account must be an Eligible Account.

         DISTRIBUTION ACCOUNT DEPOSIT DATE: With respect to any Distribution
Date, the Business Day prior to such Distribution Date.

         DISTRIBUTION DATE: The 25th day (or, if such 25th day is not a Business
Day, the Business Day immediately succeeding such 25th day) of each month, with
the first such date being June 25, 2004.

         DUE DATE: The first day of each calendar month, which is the day on
which the Monthly Payment for each Loan is due, exclusive of any days of grace.
The "related Due Date" for any Distribution Date is the Due Date immediately
preceding such Distribution Date.

         DUE PERIOD: With respect to any Distribution Date, the period
commencing on the second day of the month immediately preceding the 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 account or accounts held and established by the
Securities Administrator in trust for the Certificateholders at any Eligible
Institution.

         ELIGIBLE INSTITUTION: An institution having (i) the highest short-term
debt rating, and one of the two highest long-term debt ratings of each Rating
Agency, (ii) with respect to the Distribution Accounts, an unsecured long-term
debt rating of at least one of the two highest

                                      -22-
<PAGE>

unsecured long-term debt ratings of each Rating Agency, or (iii) the approval of
each Rating Agency.

         ELIGIBLE INVESTMENTS: Any one or more of the following obligations or
securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the following Distribution Date (or, with respect to a
Distribution Account maintained with the Securities Administrator, having a
scheduled maturity on or before the following Distribution Date; provided that,
such Eligible Investments shall be managed by, or an obligation of, the
institution that maintains a Distribution Account if such Eligible Investments
mature on the Distribution Date), regardless of whether any such obligation is
issued by the Depositor, the applicable Servicer, the Trustee, the Master
Servicer, the Securities Administrator or any of their respective Affiliates and
having at the time of purchase, or at such other time as may be specified, the
required ratings, if any, provided for in this definition:

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

                  (b) direct obligations of, or guaranteed as to timely payment
of principal and interest by, Freddie Mac, Fannie Mae or the Federal Farm Credit
System, provided, that any such obligation, at the time of purchase or
contractual commitment providing for the purchase thereof, is qualified by each
Rating Agency as an investment of funds backing securities rated "AAA" in the
case of S&P and Moody's (the initial rating of the Class A Certificates);

                  (c) demand and time deposits in or certificates of deposit of,
or bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank, provided, that the short-term deposit ratings
and/or long-term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institutions in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company) have, in the case of commercial paper, the
highest rating available for such securities by each Rating Agency and, in the
case of long-term unsecured debt obligations, one of the two highest ratings
available for such securities by each Rating Agency, or in each case such lower
rating as will not result in the downgrading or withdrawal of the rating or
ratings then assigned to any Class of Certificates by any Rating Agency but in
no event less than the initial rating of the Senior Certificates;

                  (d) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving one of the two
highest long-term debt ratings available for such securities by each Rating
Agency, or such lower rating as will not result in the downgrading or withdrawal
of the rating or ratings then assigned to any Class of Certificates by any
Rating Agency;

                  (e) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) that is rated by each Rating Agency in its highest
short-term unsecured rating category at the time of such investment or
contractual commitment providing for such investment, and is issued by a
corporation the outstanding senior long-term debt obligations of which are then
rated by each Rating Agency in

                                      -23-
<PAGE>

one of its two highest long-term unsecured rating categories, or such lower
rating as will not result in the downgrading or withdrawal of the rating or
ratings then assigned to any Class of Certificates by any Rating Agency but in
no event less than the initial rating of the Senior Certificates;

                  (f) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in one of the two highest rating
levels available to such issuers by each Rating Agency at the time of such
investment, provided, that any such agreement must by its terms provide that it
is terminable by the purchaser without penalty in the event any such rating is
at any time lower than such level;

                  (g) repurchase obligations with respect to any security
described in clause (a) or (b) above entered into with a depository institution
or trust company (acting as principal) meeting the rating standards described in
(c) above;

                  (h) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States of
America or any State thereof and rated by each Rating Agency in one of its two
highest long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; provided, however, that
securities issued by any such corporation will not be Eligible Investments to
the extent that investment therein would cause the outstanding principal amount
of securities issued by such corporation that are then held as part of a
Distribution Account to exceed 20% of the aggregate principal amount of all
Eligible Investments then held in such Distribution Account;

                  (i) units of taxable money market funds (including those for
which the Trustee, the Securities Administrator, the Master Servicer or any
affiliate thereof receives compensation with respect to such investment) which
funds have been rated by each Rating Agency rating such fund in its highest
rating category or which have been designated in writing by each Rating Agency
as Eligible Investments with respect to this definition;

                  (j) if previously confirmed in writing to the Trustee and the
Securities Administrator, any other demand, money market or time deposit, or any
other obligation, security or investment, as may be acceptable to each Rating
Agency as a permitted investment of funds backing securities having ratings
equivalent to the initial rating of the Class A Certificates; and

                  (k) such other obligations as are acceptable as Eligible
Investments to each Rating Agency;

provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) and that no instrument or
security shall be an Eligible Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the right to receive
principal and interest payments derived from the underlying investment provides
a yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.

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

         EUROCLEAR: Euroclear Bank SA/NV, Brussels office, as operator of the
Euroclear system.

                                      -24-
<PAGE>

         EXCESS LOSS: A Special Hazard Loss incurred on a Group III-VII Loan in
excess of the Special Hazard Coverage, a Fraud Loss incurred on a Group III-VII
Loan in excess of the Fraud Coverage and a Bankruptcy Loss incurred on a Group
III-VII Loan in excess of the Bankruptcy Coverage.

         EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.

         EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date and the Group I Loans or Group II Loans, the lesser of (i) the related Net
Monthly Excess Cashflow for such Distribution Date and (ii) the related
Overcollateralization Increase Amount for such Distribution Date.

         FANNIE MAE: Fannie Mae, formerly known as the Federal National Mortgage
Association, or any successor thereto.

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

         FINAL TERMINATOR: As defined in Section 9.2.

         FRAUD COVERAGE: As of the Cut-Off Date, will be $4,599,564. As of any
date of determination after the Cut-Off Date, the Fraud Coverage will generally
be equal to:

                  (1) from the first to and including the second Anniversary, an
amount equal to:

                              (a)   1% of the aggregate Principal Balance of the
                                    Group III-VII Loans as of the Cut-Off Date,
                                    minus

                              (b)   the aggregate amounts allocated to the Group
                                    III-VII Certificates with respect to Fraud
                                    Losses on the Group III-VII Loans up to such
                                    date of determination;

                  (2) from the third to and including the fifth Anniversary, an
amount equal to:

                              (a)   0.50% of the aggregate Principal Balance of
                                    the Group III-VII Loans as of the Cut-Off
                                    Date, minus

                              (b)   the aggregate amounts allocated to the Group
                                    III-VII Certificates with respect to Fraud
                                    Losses on the Group III-VII Loans up to such
                                    date of determination;

                  (3) after the fifth Anniversary, the Fraud Coverage will be
zero.

         FRAUD LOSS: The occurrence of a loss on a Group III-VII Loan arising
from fraud, dishonesty or misrepresentation by related Mortgagor in the
origination such Group III-VII Loan.

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

         GMAC:  GMAC Mortgage Corporation or any successor thereto.

                                      -25-
<PAGE>

         GMAC SERVICING AGREEMENT: The Servicing Agreement, dated as of April 1,
2004, between the Seller and GMAC (as modified pursuant to the related
Assignment Agreement).

         GLOBAL CERTIFICATE: A Regulation S Permanent Global Certificate or
Regulation S Temporary Global Certificate.

         GREENPOINT: Greenpoint Mortgage Funding, Inc. or any successor thereto.

         GREENPOINT SERVICING AGREEMENT: The Master Mortgage Loan Purchase and
Servicing Agreement, dated as of February 1, 2004, between the Seller and
Greenpoint (as modified pursuant to the related Assignment Agreement).

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

         GROUP I AVAILABLE DISTRIBUTION AMOUNT: With respect to a Distribution
Date, the sum of the following amounts:

         (1) the total amount of all cash received by or on behalf of the
related Servicers with respect to the Group I Loans by the Determination Date
for such Distribution Date and not previously distributed (including Liquidation
Proceeds, Insurance Proceeds and Subsequent Recoveries), except:

                  (a) all Prepaid Monthly Payments on the Group I Loans;

                  (b) all Curtailments on the Group I Loans received after the
applicable Prepayment Period;

                  (c) all Payoffs on the Group I Loans received after the
applicable Prepayment Period together with all interest paid by the related
Mortgagors in connection with such Payoffs;

                  (d) Insurance Proceeds, Liquidation Proceeds and Subsequent
Recoveries on the Group I Loans received after the applicable Prepayment Period;

                  (e) all amounts which are due and reimbursable to the related
Servicers pursuant to the terms of the related Servicing Agreements or to the
Master Servicer, the Securities Administrator, the Trustee or the Custodian
pursuant to the terms of this Agreement with respect to the Group I Loans;

                  (f) the Servicing Fee and the Credit Risk Management Fee for
each Group I Loan for such Distribution Date;

                  (g) all investment earnings, if any, on amounts on deposit in
the related Distribution Account and each Protected Account;

                  (h) any premiums payable in connection with any lender paid
primary mortgage insurance policies with respect to the Group I Loans;

                                      -26-
<PAGE>

                  (i) the amount of any Prepayment Charges collected by the
related Servicers in connection with the Principal Prepayment of any of the
Group I Loans.

         (2) to the extent advanced by the related Servicers and/or the Master
Servicer and not previously distributed, the amount of all Advances made by the
related Servicers and/or the Master Servicer with respect to such Distribution
Date relating to the Group I Loans;

         (3) to the extent advanced by the related Servicers and/or the Master
Servicer and not previously distributed, any amount payable as Compensating
Interest by the related Servicers and/or the Master Servicer on such
Distribution Date relating to the Group I Loans; and

         (4) the total amount, to the extent not previously distributed, of all
cash received by the Distribution Date by the Trustee or the Master Servicer, in
respect of a Purchase Obligation with respect to a Group I Loan under Section
2.3 or any permitted repurchase of a Group I Loan.

         GROUP I CERTIFICATES: The Group I Senior, Group I Mezzanine, Class I-CE
and Class I-P Certificates.

         GROUP I CLEANUP CALL: As defined in Section 9.1.

         GROUP I CREDIT ENHANCEMENT PERCENTAGE: For any Class of Group I
Certificates and any Distribution Date, the percentage obtained by dividing (x)
the sum of (i) the aggregate Certificate Principal Balances of the Class or
Classes of Group I Certificates subordinate to such Certificate and (ii) the
related Overcollateralization Amount by (y) the aggregate Principal Balance of
the Group I Loans, calculated after taking into account distributions of
principal on the Group I Loans and distribution of the Group I Principal
Distribution Amount to the Holders of the Group I Certificates then entitled to
distributions of principal on such Distribution Date.

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

         GROUP I MARKER RATE: With respect to the Class I-CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC III Pass-Through Rate for each of REMIC III
Regular Interest LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
Regular Interest LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC III
Regular Interest LTIII-1A5, REMIC III Regular Interest LTIII-1A6, REMIC III
Regular Interest LTIII-1M1, REMIC III Regular Interest LTIII-1M2, REMIC III
Regular Interest LTIII-1M3 and REMIC III Regular Interest LTIII-1ZZ, with the
rate on each such REMIC III Regular Interest (other than REMIC III Regular
Interest LTIII-1ZZ) subject to a cap equal to Pass-Through Rate for the
Corresponding Certificate, and with the rate on REMIC III Regular Interest
LTIII-1ZZ subject to a cap of zero for the purpose of this calculation; provided
however, such cap for REMIC III Regular Interest LTIII-1A1 shall be multiplied
by a fraction the numerator of which is the actual number of days in the related
Interest Accrual Period and the denominator of which is 30.

         GROUP I MEZZANINE CERTIFICATES: The Class I-M-1, Class I-M-2 and Class
I-M-3 Certificates.

         GROUP I PRINCIPAL DISTRIBUTION AMOUNT: On any Distribution Date the sum
of (i) the principal portion of all scheduled Monthly Payments on the Group I
Loans due during the related

                                      -27-
<PAGE>

Due Period, whether or not received on or prior to the related Determination
Date; (ii) the principal portion of repurchase proceeds received with respect to
any Group I Loan which was repurchased by the Depositor pursuant to a Purchase
Obligation or as permitted by this Agreement (or, in the case of a substitution,
amounts representing a principal adjustment) during the related Prepayment
Period; (iii) the principal portion of all other unscheduled collections on the
Group I Loans, including Insurance Proceeds, Liquidation Proceeds, Subsequent
Recoveries and all Curtailments and Payoffs received during the related
Prepayment Period, to the extent applied as recoveries of principal on the Group
I Loans MINUS (iv) the amount of any related Overcollateralization Reduction
Amount for such Distribution Date and any amounts payable or reimbursable
therefrom to the related Servicers, the Trustee, the Custodian, the Master
Servicer or the Securities Administrator prior to distributions being made on
the Group I Certificates. In no event will the Group I Principal Distribution
Amount with respect to any Distribution Date be (x) less than zero or (y)
greater than the then outstanding aggregate Certificate Principal Balance of the
Group I Certificates.

         GROUP I PRINCIPAL REMITTANCE AMOUNT: For any Distribution Date and the
Group I Loans, the sum of the amounts described in clauses (i) through (iii) of
the definition of Group I Principal Distribution Amount, net of any amounts
payable or reimbursable therefrom to the related Servicers, the Trustee, the
Custodian, the Master Servicer or the Securities Administrator.

         GROUP I REO PROPERTY: A Mortgaged Property related to a Group I Loan,
title to which has been acquired by the related Servicer on behalf of the Trust
Fund through foreclosure, deed in lieu of foreclosure or otherwise.

         GROUP I REQUIRED OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution Date following the Closing Date, an amount equal to approximately
0.35% of the aggregate Principal Balance of the Group I Loans as of the Cut-Off
Date.

         GROUP I RESERVE FUND: Shall mean the separate trust account created and
maintained by the Securities Administrator pursuant to Section 3.25 hereof on
behalf of the Holders of the Group I Certificates.

         GROUP I SENIOR CERTIFICATES: The Class I-A-1, Class I-A-2, Class I-A-3,
Class I-A-4, Class I-A-5, Class I-A-6 and Class I-A-IO Certificates.

         GROUP I SENIOR PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the Group I Principal Distribution Amount or (ii) on or after
the Group I Stepdown Date if a Group I Trigger Event is not in effect for that
Distribution Date, the lesser of:

         (a)      the Group I Principal Distribution Amount for that
                  Distribution Date; and

         (b)      the excess of (A) the aggregate Certificate Principal Balance
                  of the Group I Senior Certificates immediately prior to that
                  Distribution Date over (B) the positive difference between (i)
                  the aggregate Principal Balance of the Group I Loans as of the
                  last day of the related Due Period (after reduction for
                  Realized Losses on the Group I Loans incurred during the
                  related Prepayment Period) and

                                      -28-
<PAGE>

                  (ii) the product of (x) the aggregate Principal Balance of the
                  Group I Loans as of the last day of the related Due Period
                  (after reduction for Realized Losses on the Group I Loans
                  incurred during the related Prepayment Period) and (y) the sum
                  of 10.30% and the related Required Overcollateralization
                  Percentage.

         GROUP I STEPDOWN DATE: The earlier to occur of (1) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Group I Senior Certificates has been reduced to zero and (2) the later to occur
of (x) the Distribution Date in June 2007 and (y) the first Distribution Date on
which the Group I Credit Enhancement Percentage of the Group I Senior
Certificates (calculated for this purpose only after taking into account
distributions of principal on the Group I Loans, but prior to any distribution
of the Group I Principal Distribution Amount to the Holders of the Group I
Certificates then entitled to distributions of principal on the Distribution
Date) is greater than or equal to 11.00%.

         GROUP I TERMINATOR: As defined in Section 9.1.

         GROUP I TRIGGER EVENT: With respect to any Distribution Date and the
Group I Certificates, the occurrence of any of the following events: (x) the
related Delinquency Percentage exceeds 50% of the Group I Credit Enhancement
Percentage of the Group I Senior Certificates for the prior Distribution Date,
or (y) the aggregate amount of Realized Losses with respect to the Group I Loans
incurred since the Cut-Off Date through the last day of the related Due Period
divided by the aggregate Principal Balance of the Group I Loans as of the
Cut-Off Date exceeds the applicable percentages set forth below with respect to
such Distribution Date:

             Distribution Date                      Percentage
             -----------------                      ----------
June 2007 to May 2008.........................         0.75%
June 2008 and thereafter......................         1.00%

         GROUP I/II RESIDUAL CERTIFICATE: The Class I/II-R Certificates, which
are being issued in a single class. Components R-I, R-II, R-III and R-IV of the
Class I/II-R Certificate are hereby each designated the sole Class of "residual
interests" in REMIC I, REMIC II, REMIC III and REMIC IV, respectively, for
purposes of Section 860G(a)(2) of the Code.

         GROUP II AVAILABLE DISTRIBUTION AMOUNT: With respect to a Distribution
Date, the sum of the following amounts:

         (1) the total amount of all cash received by or on behalf of the
related Servicers with respect to the Group II Loans by the Determination Date
for such Distribution Date and not previously distributed (including Liquidation
Proceeds, Insurance Proceeds and Subsequent Recoveries), except:

                  (a) all Prepaid Monthly Payments on the Group II Loans;

                  (b) all Curtailments on the Group II Loans received after the
applicable Prepayment Period;

                                      -29-
<PAGE>

                  (c) all Payoffs on the Group II Loans received after the
applicable Prepayment Period together with all interest paid by the related
Mortgagors in connection with such Payoffs;

                  (d) Insurance Proceeds, Liquidation Proceeds and Subsequent
Recoveries on the Group II Loans received after the applicable Prepayment
Period;

                  (e) all amounts which are due and reimbursable to the related
Servicers pursuant to the terms of the related Servicing Agreements or to the
Master Servicer, the Securities Administrator, the Trustee or the Custodian
pursuant to the terms of this Agreement with respect to the Group II Loans;

                  (f) the Servicing Fee and the Credit Risk Management Fee for
each Group II Loan for such Distribution Date;

                  (g) all investment earnings, if any, on amounts on deposit in
the related Distribution Account and each Protected Account;

                  (h) any premiums payable in connection with any lender paid
primary mortgage insurance policies with respect to the Group II Loans; and

                  (i) the amount of any Prepayment Charges collected by the
related Servicers in connection with the Principal Prepayment of any of the
Group II Loans.

         (2) to the extent advanced by the related Servicers and/or the Master
Servicer and not previously distributed, the amount of all Advances made by the
related Servicers and/or the Master Servicer with respect to such Distribution
Date relating to the Group II Loans;

         (3) to the extent advanced by the related Servicers and/or the Master
Servicer and not previously distributed, all amounts payable as Compensating
Interest by the related Servicers and/or the Master Servicer on such
Distribution Date relating to the Group II Loans; and

         (4) the total amount, to the extent not previously distributed, of all
cash received by the Distribution Date by the Trustee or the Master Servicer, in
respect of a Purchase Obligation with respect to a Group II Loan under Section
2.3 or any permitted repurchase of a Group II Loan.

         GROUP II CERTIFICATES: The Group II Senior, Group II Mezzanine, Class
II-CE and Class II-P Certificates.

         GROUP II CLEANUP CALL: As defined in Section 9.1.

         GROUP II CREDIT ENHANCEMENT PERCENTAGE: For any Class of Group II
Certificates and any Distribution Date, the percentage obtained by dividing (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class or
Classes of Group II Certificates subordinate thereto and (ii) the related
Overcollateralization Amount by (y) the aggregate Principal Balance of the Group
II Loans, calculated after taking into account distributions of principal on the
Group II Loans and distribution of the Group II Principal Distribution Amount to
the Holders of the Group II Certificates then entitled to distributions of
principal on such Distribution Date.

                                      -30-
<PAGE>

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

         GROUP II MARKER RATE: With respect to the Class II-CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC III Pass-Through Rate for each of REMIC III
Regular Interest LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC III
Regular Interest LTIII-2MR1, REMIC III Regular Interest LTIII-2MR2, REMIC III
Regular Interest LTIII-2MR3 and REMIC III Regular Interest LTIII-2ZZ, with the
rate on each such REMIC III Regular Interest (other than REMIC III Regular
Interest LTIII-2ZZ) subject to a cap equal to Pass-Through Rate for the
Corresponding Certificate, and with the rate on REMIC III Regular Interest
LTIII-2ZZ subject to a cap of zero for the purpose of this calculation; provided
however, each such cap for each REMIC III Regular Interest (other than REMIC III
Regular Interest LTIII-2ZZ) shall be multiplied by a fraction the numerator of
which is the actual number of days in the related Interest Accrual Period and
the denominator of which is 30.

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

         GROUP II PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
sum of the Group II-1 Principal Distribution Amount and Group II-2 Principal
Distribution Amount.

         GROUP II PRINCIPAL REMITTANCE AMOUNT: For any Distribution Date and the
Group II Loans, the sum of the amounts described in clauses (i) through (iii) of
the definition of Group II-1 Principal Distribution Amount and Group II-2
Principal Distribution Amount, net of any amounts payable or reimbursable
therefrom to the related Servicers, the Trustee, the Custodian, the Master
Servicer or the Securities Administrator.

         GROUP II REO PROPERTY: A Mortgaged Property related to a Group II Loan,
title to which has been acquired by the related Servicer on behalf of the Trust
Fund through foreclosure, deed in lieu of foreclosure or otherwise.

         GROUP II REQUIRED OVERCOLLATERALIZATION AMOUNT: For the first six
Distribution Dates, approximately $0.00, and with respect to any Distribution
Date on or after the seventh Distribution Date, an amount equal to approximately
0.50% of the aggregate Principal Balance of the Group II Loans as of the Cut-Off
Date.

         GROUP II RESERVE FUND: Shall mean the separate trust account created
and maintained by the Securities Administrator pursuant to Section 3.25 hereof
on behalf of the Holders of the Group II Certificates.

         GROUP II SENIOR CERTIFICATES: The Class II-AR-1 Certificates and Class
II-AR-2 Certificates.

         GROUP II SENIOR PRINCIPAL DISTRIBUTION AMOUNT: The sum of the Class
II-AR-1 Principal Distribution Amount and the Class II-AR-2 Principal
Distribution Amount.

         GROUP II STEPDOWN DATE: The earlier to occur of (1) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Group II Senior Certificates has been reduced to zero and (2) the later to occur
of (x) the Distribution Date in June 2007 and (y) the first

                                      -31-
<PAGE>

Distribution Date on which the Group II Credit Enhancement Percentage of the
Group II Senior Certificates (calculated for this purpose only after taking into
account distributions of principal on the Group II Loans, but prior to any
distribution of the Group II Principal Distribution Amount to the Holders of the
Group II Certificates then entitled to distributions of principal on the
Distribution Date) is greater than or equal to 13.50%.

         GROUP II TERMINATOR: As defined in Section 9.1.

         GROUP II TRIGGER EVENT: With respect to any Distribution Date and the
Group II Certificates, the occurrence of any of the following events: (x) the
related Delinquency Percentage exceeds 45% of the Group II Credit Enhancement
Percentage of the Group II Senior Certificates for the prior Distribution Date,
or (y) the aggregate amount of Realized Losses on the Group II Loans incurred
since the Cut-Off Date through the last day of the related Due Period divided by
the aggregate Principal Balance of the Group II Loans as of the Cut-Off Date
exceeds the applicable percentages set forth below with respect to such
Distribution Date:

                  Distribution Date                      Percentage
                  -----------------                      ----------
June 2007 to May 2008............................           1.00%
June 2008 to May 2009............................           1.50%
June 2009 to May 2010............................           1.75%
June 2010 and thereafter.........................           2.00%

         GROUP II-1 LOANS: Those Loans identified on the Loan Schedule as Group
II-1 Loans.

         GROUP II-1 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
the sum of (i) the principal portion of all scheduled Monthly Payments on the
Group II-1 Loans due during the related Due Period, whether or not received on
or prior to the related Determination Date; (ii) the principal portion of all
repurchase proceeds received with respect to any Group II-1 Loan which was
repurchased by the Depositor pursuant to a Purchase Obligation or as permitted
by this Agreement (or, in the case of a substitution, certain amounts
representing a principal adjustment) during the related Prepayment Period; (iii)
the principal portion of all other unscheduled collections on the Group II-1
Loans, including Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries
and all Curtailments and Payoffs, received during the related Prepayment Period,
to the extent applied as recoveries of principal on the Group II-1 Loans minus
(iv) the Class II-AR-1 Allocation Percentage of the amount of any
Overcollateralization Reduction Amount for such Distribution Date and any
amounts payable or reimbursable therefrom to the related Servicers, the Trustee,
the Custodian, the Master Servicer or the Securities Administrator. In no event
will the Group II-1 Principal Distribution Amount with respect to any
Distribution Date be (x) less than zero or (y) greater than the then outstanding
aggregate Certificate Principal Balance of the Group II Certificates.

         GROUP II-2 LOANS: Those Loans identified on the Loan Schedule as Group
II-2 Loans.

         GROUP II-2 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
the sum of (i) the principal portion of all scheduled Monthly Payments on the
Group II-2 Loans due during the related Due Period, whether or not received on
or prior to the related Determination Date; (ii) the

                                      -32-
<PAGE>

principal portion of all repurchase proceeds received with respect to any Group
II-2 Loan which was repurchased by the Depositor pursuant to a Purchase
Obligation or as permitted by this Agreement (or, in the case of a substitution,
certain amounts representing a principal adjustment) during the related
Prepayment Period; (iii) the principal portion of all other unscheduled
collections on the Group II-2 Loans, including Insurance Proceeds, Liquidation
Proceeds, Subsequent Recoveries and all Curtailments and Payoffs, received
during the related Prepayment Period, to the extent applied as recoveries of
principal on the Group II-2 Loans minus (iv) the Class II-AR-2 Allocation
Percentage of the amount of any Overcollateralization Reduction Amount for such
Distribution Date and any amounts payable or reimbursable therefrom to the
related Servicers, the Trustee, the Custodian, the Master Servicer or the
Securities Administrator. In no event will the Group II-2 Principal Distribution
Amount with respect to any Distribution Date be (x) less than zero or (y)
greater than the then outstanding aggregate Certificate Principal Balance of the
Group II Certificates.

         GROUP III AVAILABLE DISTRIBUTION AMOUNT: For any Distribution Date, the
sum of the amounts described in the definition of Group III-VII Available
Distribution Amount that are related to the Group III Loans.

         GROUP III LOANS: Those Loans identified on the Loan Schedule as Group
III Loans.

         GROUP III-VII AVAILABLE DISTRIBUTION AMOUNT: With respect to a
Distribution Date, the sum of the following amounts:

         (1) the total amount of all cash received by or on behalf of the
related Servicers with respect to the Group III-VII Loans by the Determination
Date for such Distribution Date and not previously distributed (including
Liquidation Proceeds, Insurance Proceeds and Subsequent Recoveries), except:

                  (a) all Prepaid Monthly Payments on the Group III-VII Loans;

                  (b) all Curtailments on the Group III-VII Loans received after
the applicable Prepayment Period;

                  (c) all Payoffs on the Group III-VII Loans received after the
applicable Prepayment Period together with all interest paid by the related
Mortgagors in connection with such Payoffs;

                  (d) Insurance Proceeds, Liquidation Proceeds and Subsequent
Recoveries on the Group III-VII Loans received after the applicable Prepayment
Period;

                  (e) all amounts which are due and reimbursable to the related
Servicers pursuant to the terms of the related Servicing Agreements or to the
Master Servicer, the Securities Administrator, the Trustee or the Custodian
pursuant to the terms of this Agreement with respect to the Group III-VII Loans;

                  (f) the Servicing Fee for each Group III-VII Loan for such
Distribution Date;

                  (g) all investment earnings, if any, on amounts on deposit in
the related Distribution Account and each Protected Account;

                                      -33-
<PAGE>

                  (h) any premiums payable in connection with any lender paid
primary mortgage insurance policies with respect to the Group III-VII Loans;

                  (i) the amount of any Prepayment Charges collected by the
related Servicers in connection with the Principal Prepayment of any of the
Group IV Loans, Group V Loans, Group VI Loans and Group VII Loans, if any.

         (2) to the extent advanced by the related Servicers and/or the Master
Servicer and not previously distributed, the amount of all Advances made by the
related Servicers and/or the Master Servicer with respect to such Distribution
Date relating to the Group III-VII Loans;

         (3) to the extent advanced by the related Servicers and/or the Master
Servicer and not previously distributed, all amounts payable as Compensating
Interest by the related Servicers and/or the Master Servicer on such
Distribution Date relating to the Group III-VII Loans; and

         (4) the total amount, to the extent not previously distributed, of all
cash received by the Distribution Date by the Trustee or the Master Servicer, in
respect of a Purchase Obligation with respect to a Group III-VII Loan under
Section 2.3 or any permitted repurchase of a Group III-VII Loan.

         GROUP III-VII CERTIFICATES: The Group III-VII Senior Certificates and
Group III-VII Subordinate Certificates.

         GROUP III-VII CLEANUP CALL:  As defined in Section 9.1

         GROUP III-VII LOAN GROUP: Any Loan Group consisting of Group III-VII
Loans.

         GROUP III-VII LOANS: The Group III Loans, Group IV Loans, Group V
Loans, Group VI Loans and Group VII Loans.

         GROUP III-VII OFFERED SUBORDINATE CERTIFICATES: The Class M, Class B-1
and Class B-2 Certificates.

         GROUP III-VII PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date and any Loan Group consisting of Group III-VII Loans, the sum
of:

         (1)      scheduled principal payments on the related Loans due during
                  the related Due Period;

         (2)      the principal portion of repurchase proceeds received with
                  respect to the related Loans which were repurchased as
                  permitted or required hereunder during the related Prepayment
                  Period; and

         (3)      any other unscheduled payments of principal which were
                  received on the related Loans during the related Prepayment
                  Period, other than Payoffs, Curtailments or Liquidation
                  Principal; plus

         (4)      Transfer Payments received, plus interest thereon; minus

                                      -34-
<PAGE>

         (5)      Transfer Payments made, plus interest thereon.

         GROUP III-VII REO PROPERTY: A Mortgaged Property related to a Group
III-VII Loan, title to which has been acquired by the related Servicer on behalf
of the Trust Fund through foreclosure, deed in lieu of foreclosure or otherwise.

         GROUP III-VII SENIOR CERTIFICATES: The Class III-AR-1, Class IV-AR-1,
Class V-AR-1, Class VI-AR-1, Class VII-AR-1, Class VII-AR-2, Class VII-AR-3 and
Class A-R Certificates.

         GROUP III-VII SUBORDINATE CERTIFICATES: The Group III-VII Offered
Subordinate Certificates and the Junior Subordinate Certificates.

         GROUP III-VII TERMINATOR: As defined in Section 9.1.

         GROUP IV AVAILABLE DISTRIBUTION AMOUNT: For any Distribution Date, the
sum of the amounts described in the definition of Group III-VII Available
Distribution Amount that are related to the Group IV Loans.

         GROUP IV LOANS: Those Loans identified on the Loan Schedule as Group IV
Loans.

         GROUP V AVAILABLE DISTRIBUTION AMOUNT: For any Distribution Date, the
sum of the amounts described in the definition of Group III-VII Available
Distribution Amount that are related to the Group V Loans.

         GROUP V LOANS: Those Loans identified on the Loan Schedule as Group V
Loans.

         GROUP VI AVAILABLE DISTRIBUTION AMOUNT: For any Distribution Date, the
sum of the amounts described in the definition of Group III-VII Available
Distribution Amount that are related to the Group VI Loans.

         GROUP VI LOANS: Those Loans identified on the Loan Schedule as Group VI
Loans.

         GROUP VII AVAILABLE DISTRIBUTION AMOUNT: For any Distribution Date, the
sum of the Group VII-1 Available Distribution Amount and Group VII-2 Available
Distribution Amount.

         GROUP VII CERTIFICATES: The Class VII-AR-1 Certificates, Class VII-AR-2
Certificates and Class VII-AR-3 Certificates, collectively.

         GROUP VII LOANS:  The Group VII-1 Loans and Group VII-2 Loans.

         GROUP VII-1 AVAILABLE DISTRIBUTION AMOUNT: For any Distribution Date
will equal the sum of the amounts described in the definition of Group III-VII
Available Distribution Amount that are related to the Group VII-1 Loans.

         GROUP VII-1 LOANS: Those Loans identified on the Loan Schedule as Group
VII-1 Loans.

         GROUP VII-2 AVAILABLE DISTRIBUTION AMOUNT: For any Distribution Date
will equal the sum of the amounts described in the definition of Group III-VII
Available Distribution Amount that are related to the Group VII-2 Loans.

                                      -35-
<PAGE>

         GROUP VII-2 LOANS: Those Loans identified on the Loan Schedule as Group
VII-2 Loans.

         GROUP VII RESERVE FUND: The separate trust account created and
maintained by the Securities Administrator pursuant to Section 3.25 hereof on
behalf of the Holders of the Class VII-AR-1 Certificates and Class VII-AR-2
Certificates.

         INDEPENDENT: When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor, each Servicer and the
Master Servicer, (ii) does not have any direct financial interest or any
material indirect financial interest in the Depositor, any Servicer or the
Master Servicer or any Affiliate of either and (iii) is not connected with the
Depositor, any Servicer or the Master Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.

         INDEX: As of any Adjustment Date, the index applicable to the
determination of the Mortgage Interest Rate on each Adjustable Rate Loan which
will generally be (A) with respect to approximately 97.72%, and 28.50% of the
Group II Loans and Group III-VII Loans, respectively, by aggregate Principal
Balance as of the Cut-Off Date, the average of the interbank offered rates for
six-month United States dollar deposits in the London market as published in The
Wall Street Journal and as most recently available either (i) as of the first
business day 45 days prior to that Adjustment Date or (ii) as of the first
business day of the month preceding the month of the Adjustment Date, as
specified in the related mortgage note, (B) with respect to approximately 2.28%,
and 0.56% of the Group II Loans and Group III-VII Loans, respectively, by
aggregate Principal Balance as of the Cut-Off Date, the weekly average yield on
United States Treasury Securities adjusted to a constant maturity of one year,
as published in the Federal Reserve Statistical Release H.15 (519) as most
recently announced as of a date 45 days prior to that Adjustment Date, (C) with
respect to approximately 70.37% of the Group III-VII Loans by Principal Balance
as of the Cut-Off Date, the average of interbank offered rates for one-year U.S.
dollar-denominated deposits in the London market based on quotations of major
banks as published in The Wall Street Journal and are most recently available as
of the time specified in the related Mortgage Note or (D) with respect to 0.57%
of the Group III-VII Loans, by aggregate Principal Balance as of the Cut-Off
Date, the weighted average cost of funds for the member savings institutions of
the Federal Home Loan Bank of San Francisco.

         INDIRECT DEPOSITORY PARTICIPANTS: Entities such as banks, brokers,
dealers or trust companies that clear through or maintain a custodial
relationship with a Depository Participant, either directly or indirectly.

         INSURANCE PROCEEDS: Proceeds of any title policy, hazard policy,
mortgage guaranty policy or other insurance policy covering a Loan, to the
extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with the
applicable Servicing Agreement.

         INTEREST ACCRUAL PERIOD: With respect to each Distribution Date and
each Class of Certificates (other than the Adjustable Rate Certificates, Class
VII-AR-3, Class CE Certificates, Class P Certificates and Class I/II-R
Certificates), the calendar month preceding the month in which that Distribution
Date occurs. The Interest Accrual Period for the Class I-A-1, Group II Senior
and Group II Mezzanine Certificates shall be (a) as to the Distribution Date in
June 2004, the period commencing on the Closing Date and ending on the day
preceding the Distribution

                                      -36-
<PAGE>

Date in June 2004, and (b) as to any Distribution Date after the Distribution
Date in June 2004, the period commencing on the Distribution Date in the month
immediately preceding the month in which that Distribution Date occurs and
ending on the day preceding that Distribution Date. The Interest Accrual Period
for the Class VII-AR-1, Class VII-AR-2 and Class VII-AR-3 Certificates shall be
the period from and including the 25th calendar day of the month preceding the
month in which the Distribution Date occurs to and including the 24th calendar
day of the month in which that Distribution Date occurs. Interest on each Class
of Certificates (other than the Class I-A-1, Group II Senior, Group II
Mezzanine, Class CE Certificates, Class P Certificates and Class I/II-R
Certificates), will be calculated based on a 360-day year consisting of twelve
30-day months. Interest on the Class I-A-1, Group II Senior and Group II
Mezzanine Certificates will be calculated based on a 360-day year and the actual
number of days elapsed in the related Interest Accrual Period.

         INTEREST CARRY FORWARD AMOUNT: With respect to any Distribution Date
and any Class of Group I Senior, Group II Senior, Group I Mezzanine and Group II
Mezzanine Certificates, the sum of (i) the amount, if any, by which (a) the
related Interest Distribution Amount for such Class of Certificates for the
immediately preceding Distribution Date exceeded (b) the actual amount
distributed on such Class of Certificates in respect of interest on such
immediately preceding Distribution Date and (ii) the amount of any related
Interest Carry Forward Amount for such Class of Certificates remaining unpaid
from the previous Distribution Date, plus accrued interest on such sum
calculated at the related Pass-Through Rate for the most recently ended Interest
Accrual Period.

         INTEREST DISTRIBUTION AMOUNT: On any Distribution Date, for any Class
of Group I Senior, Group II Senior, Group I Mezzanine and Group II Mezzanine
Certificates, the amount of interest accrued on such Class during the related
Interest Accrual Period on the related Certificate Principal Balance or Notional
Amount of that Class, which shall be an amount, not less than zero, equal to (a)
the product of (1) 1/12th of the Pass-Through Rate for such Class and (2) the
Certificate Principal Balance or Notional Amount, as applicable, for such Class
before giving effect to allocations of Realized Losses in connection with such
Distribution Date or distributions to be made on such Distribution Date, REDUCED
BY (b) Uncompensated Interest Shortfalls allocated to such Class pursuant to
Section 1.2 and, with respect to the Group I Mezzanine Certificates and Class
I-CE Certificates or the Group II Mezzanine Certificates and Class II-CE
Certificates, the interest portion of Realized Losses allocated to such Class
pursuant to Section 1.2. On any Distribution Date, for any Class of Group
III-VII Certificates, the sum of (i) interest accrued on the related Group
III-VII Certificates during the related Interest Accrual Period on the related
Certificate Principal Balance of such Class, which shall be an amount, not less
than zero, equal to (a) the product of (1) 1/12th of the Pass-Through Rate or
Subordinate Interest Rate, as applicable, for such Class and (2) the Certificate
Principal Balance or Notional Amount, as applicable, for such Class before
giving effect to Realized Losses in connection with such Distribution Date or
distributions to be made on such Distribution Date, REDUCED BY (b) such Class'
allocable share, if any, of Uncompensated Interest Shortfalls with respect to
the related Loans and the interest portion of Realized Losses allocated to such
Class pursuant to Section 4.6 and (ii) the amount of interest accrued but unpaid
to such Class from prior Distribution Dates.

         INTEREST ONLY CERTIFICATES: Either the Class I-A-IO Certificates or the
Class VII-AR-3 Certificates.

                                      -37-
<PAGE>

         INTEREST REMITTANCE AMOUNT: With respect to any Distribution Date and
the Group I Loans or Group II Loans, as applicable, that portion of the related
Available Distribution Amount attributable to interest received or advanced on
the Group I Loans or the Group II Loans, as applicable.

         INVESTMENT WITHDRAWAL DISTRIBUTION DATE: As defined in Section 3.23(c).

         JUNIOR SUBORDINATE CERTIFICATES: The Class B-3, Class B-4 and Class B-5
Certificates.

         LAST SCHEDULED DISTRIBUTION DATE: With respect to each Class of Group I
Certificates other than the Class I-A-IO Certificates, the Distribution Date in
April 2034. With respect to the Class I-A-IO Certificates, the Distribution Date
in May 2006. With respect to each Class of Group II Certificates and Group
III-VII Certificates, the Distribution Date in June 2034.

         LIBOR: For the initial Interest Accrual Period, on the Closing Date,
the Securities Administrator will determine the One-Month LIBOR for such
Interest Accrual Period based on information available on the second business
day preceding the Closing Date with respect to the Class I-A-1, Group II Senior,
Group II Mezzanine, Class VII-AR-1 and Class VII-AR-2 Certificates, and for any
Interest Accrual Period thereafter, the one month rate which appears on the Dow
Jones Telerate System, page 3750, as of 11:00 a.m., London time on the LIBOR
Determination Date. If such rate is not provided, LIBOR shall mean the rate
determined by the Securities Administrator (or a calculation agent on its
behalf) in accordance with the following procedure:

                  (i) The Securities Administrator on the LIBOR Determination
Date will request the principal London offices of each of four major Reference
Banks in the London interbank market, as selected by the Securities
Administrator, to provide the Securities Administrator with its offered
quotation for deposits in United States dollars for the upcoming one-month
period, commencing on the second LIBOR Business Day immediately following such
LIBOR Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m. London time on such LIBOR Determination Date and in a
principal amount that is representative for a single transaction in United
States dollars in such market at such time. If at least two such quotations are
provided, LIBOR determined on such LIBOR Determination Date will be the
arithmetic mean of such quotations.

                  (ii) If fewer than two quotations are provided, LIBOR
determined on such LIBOR Determination Date will be the arithmetic mean of the
rates quoted at approximately 11:00 a.m. in New York City on such LIBOR
Determination Date by three major banks in New York City selected by the
Securities Administrator for one-month United States dollar loans to lending
European banks, in a principal amount that is representative for a single
transaction in United States dollars in such market at such time; provided,
however, that if the banks so selected by the Securities Administrator are not
quoting as mentioned in this sentence, LIBOR determined on such LIBOR
Determination Date will continue to be LIBOR as then currently in effect on such
LIBOR Determination Date.

         LIBOR BUSINESS DAY: Any day on which dealings in United States dollars
are transacted in the London interbank market.

                                      -38-
<PAGE>

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

         LIQUIDATED LOAN: A Loan as to which the related Servicer has determined
in accordance with its customary servicing practices that all amounts which it
expects to recover from or on account of such Loan, whether from Insurance
Proceeds, Liquidation Proceeds or otherwise, have been recovered. For purposes
of this definition, acquisition of a Mortgaged Property by the Trust Fund shall
not constitute final liquidation of the related Loan.

         LIQUIDATION PRINCIPAL: With respect to any Distribution Date and any
Group III-VII Loan, the principal portion of net Liquidation Proceeds received
with respect to each such Group III-VII Loan which became a Liquidated Loan (but
not in excess of the Principal Balance thereof) during the related Prepayment
Period.

         LIQUIDATION PROCEEDS: The amount (other than Insurance Proceeds or
amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the applicable Servicer pursuant to the related
Servicing Agreement or the Master Servicer in connection with (i) the taking of
all or a part of a Mortgaged Property by exercise of the power of eminent domain
or condemnation, (ii) the liquidation of a defaulted Loan through a trustee's
sale, foreclosure sale or otherwise, or (iii) the repurchase, substitution or
sale of a Loan or an REO Property pursuant to or as contemplated by Section 2.3
or Section 9.1.

         LOAN DOCUMENTS: The documents evidencing or relating to each Loan
delivered to the Custodian under the Custodial Agreement on behalf of the
Trustee.

         LOAN GROUP: The Group I Loans, Group II Loans, Group III Loans, Group
IV Loans, Group V Loans, Group VI Loans, Group VII-1 Loans or Group VII-2 Loans,
as applicable.

         LOAN SCHEDULE: The schedule, as amended from time to time, of Loans,
attached hereto as Schedule One, which shall set forth as to each Loan the
following, among other things:

               (i)    the loan number of the Loan and name of the related
                      Mortgagor;

               (ii)   the street address of the Mortgaged Property including
                      city, state and zip code;

               (iii)  the Mortgage Interest Rate as of the Cut-Off Date;

               (iv)   the original term and maturity date of the related
                      Mortgage Note;

               (v)    the original Principal Balance;

               (vi)   the first payment date;

               (vii)  the Monthly Payment in effect as of the Cut-Off Date;

               (viii) the date of the last paid installment of interest;

                                      -39-
<PAGE>

               (ix)   the unpaid Principal Balance as of the close of business
                      on the Cut-Off Date;

               (x)    the Loan-to-Value ratio at origination;

               (xi)   the type of property and the Original Value of the
                      Mortgaged Property;

               (xii)  whether a primary mortgage insurance policy is in effect
                      as of the Cut-Off Date;

               (xiii) the nature of occupancy at origination;

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

               (xv)   with respect to each Adjustable Rate Loan, the first
                      Adjustment Date;

               (xvi)  with respect to each Adjustable Rate Loan, the Gross
                      Margin;

               (xvii) with respect to each Adjustable Rate Loan, the Maximum
                      Mortgage Interest Rate under the terms of the Mortgage
                      Note;

               (xviii) with respect to each Adjustable Rate Loan, the Minimum
                      Mortgage Interest Rate under the terms of the Mortgage
                      Note;

               (xix)  with respect to each Adjustable Rate Loan, the Periodic
                      Rate Cap;

               (xx)   with respect to each Adjustable Rate Loan, the first
                      Adjustment Date immediately following the Cut-off Date;

               (xxi)  with respect to each Adjustable Rate Loan, the Index;

               (xxii) the related Loan Group; and

               (xxiii) the related Servicer.

         LOANS: The Mortgages and the related Mortgage Notes, each transferred
and assigned to the Trustee pursuant to the provisions hereof as from time to
time are held as part of the Trust Fund, as so identified in the Loan Schedule.
Each of the Loans is referred to individually in this Agreement as a "Loan".

         LOAN-TO-VALUE RATIO: The original principal amount of a Loan divided by
the Original Value; however, references to "current Loan-to-Value Ratio" shall
mean the then current Principal Balance of a Loan divided by the Original Value.

         M&T: M&T Mortgage Corporation, a New York banking corporation, or any
successor thereto.

                                      -40-
<PAGE>

         M&T SERVICING AGREEMENT: The Interim Servicing and Servicing Rights
Purchase Agreement, dated as of March 1, 2004 between the Seller and M&T (as
modified pursuant to the related Assignment Agreement).

         MASTER SERVICER: As of the Closing Date, Wells Fargo Bank, N.A. and
thereafter, its respective successors in interest who meet the qualifications of
this Agreement. The Master Servicer and the Securities Administrator shall at
all times be the same Person.

         MASTER SERVICER EVENT OF DEFAULT: One or more of the events described
in Section 7.1 hereof.

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

         MEZZANINE CERTIFICATES: The Class I-M-1, Class I-M-2, Class I-M-3,
Class II-MR-1, Class II-MR-2, Class II-MR-3 and Class M Certificates,
collectively, and designated as such on the face thereof in substantially the
form attached hereto as Exhibit A-3.

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

         MONTHLY PAYMENT: The scheduled payment of principal and interest on a
Loan which is due on any Due Date for such Loan after giving effect to any
reduction in the amount of interest collectible from any Mortgagor pursuant to
the Relief Act.

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

         MORTGAGE: The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.

         MORTGAGE FILE: The Loan Documents pertaining to a particular Loan.

         MORTGAGE INTEREST RATE: With respect to each Loan, the annual rate at
which interest accrues on such Loan from time to time in accordance with the
provisions of the related Mortgage Note without regard to any reduction thereof
as a result of the Relief Act, which rate with respect to each Adjustable Rate
Loan (A) as of any date of determination until the first Adjustment Date
following the Cut-off Date shall be the rate set forth in the Loan Schedule as
the Mortgage Interest Rate in effect immediately following the Cut-off Date and
(B) as of any date of determination thereafter shall be the rate as adjusted on
the most recent Adjustment Date equal to the sum, rounded to the nearest 0.125%
as provided in the Mortgage Note, of the Index, as most recently available as of
a date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Interest Rate on such
Adjustable Rate Loan on any Adjustment Date shall never be more than the lesser
of (i) the sum of the Mortgage Interest Rate in effect immediately prior to the
Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the related
Maximum Mortgage Interest Rate, and shall never be less than the greater of (i)
the Mortgage Interest Rate in effect immediately prior to the Adjustment Date
less the Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage

                                      -41-
<PAGE>

Interest Rate. With respect to each Mortgage Loan that becomes an REO Property,
as of any date of determination, the annual rate determined in accordance with
the immediately preceding sentence as of the date such Mortgage Loan became an
REO Property.

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of May 27, 2004, between the Depositor and the Seller.

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

         MORTGAGE POOL: All of the Loans.

         MORTGAGED PROPERTY: With respect to any Loan, the real property,
together with improvements thereto, securing the indebtedness of the Mortgagor
under the related Loan.

         MORTGAGOR: The obligor on a Mortgage Note.

         NATIONAL CITY:  National City Mortgage Co. or any successor thereto.

         NATIONAL CITY SERVICING AGREEMENT: The Master Seller's Warranties and
Servicing Agreement, dated as of May 1, 2004, between National City and the
Seller (as modified pursuant to the related Assignment Agreement).

         NET INTEREST SHORTFALL: For any Distribution Date and the Group III-VII
Loans will be, the sum of (1) any Prepayment Interest Shortfall with respect to
the Group III-VII Loans for such Distribution Date, (2) any Relief Act Interest
Shortfall with respect to the Group III-VII Loans for such Distribution Date and
(3) the portion of Realized Losses attributable to interest allocated to the
Group III-VII Certificates on such Distribution Date.

         NET MONTHLY EXCESS CASHFLOW: With respect to any Distribution Date and
the Group I Loans or Group II Loans, as applicable, the sum of (i) any related
Overcollateralization Reduction Amount and (ii) the excess of (x) the related
Available Distribution Amount for such Distribution Date over (y) the sum for
such Distribution Date of (A) the aggregate Senior Interest Distribution Amounts
payable to the Holders of the Group I Senior or Group II Senior Certificates, as
applicable, (B) the aggregate Interest Distribution Amounts payable to the
Holders of the related Mezzanine Certificates and (C) the related Principal
Remittance Amount.

         NET MORTGAGE RATE: For each Loan and for any date of determination, a
per annum rate equal to the Mortgage Interest Rate for such Loan less the
related Servicing Fee Rate, the rate at which the premium payable in connection
with any lender paid primary mortgage insurance policy is paid, if applicable,
and, with respect to each Group I Loan and Group II Loan, the Credit Risk
Management Fee Rate.

         NET WAC PASS-THROUGH RATE:

         (a) For the Group I Senior Certificates (other than the Class I-A-IO
Certificates) and the Group I Mezzanine Certificates for (i) the June 2004
Distribution Date through the May 2006 Distribution Date, a per annum rate equal
to (1) the weighted average of the Net Mortgage Rates of the Group I Loans as of
the first day of the month preceding the month in which such

                                      -42-
<PAGE>

Distribution Date occurs minus (2) the Pass-Through Rate for the Class I-A-IO
Certificates for such Distribution Date multiplied by a fraction, the numerator
of which is the Notional Amount of the Class I-A-IO Certificates immediately
prior to such Distribution Date, and the denominator of which is the aggregate
Principal Balance of the Group I Loans before giving effect to distributions on
such Distribution Date and (ii) any subsequent Distribution Date, a per annum
rate equal to the weighted average of the Net Mortgage Rates of the Group I
Loans as of the first day of the month preceding the month in which such
Distribution Date occurs; provided that in each case the per annum rate
applicable to the Class I-A-1 Certificates shall be subject to adjustment based
on the actual number of days elapsed in the related Interest Accrual Period. For
United States federal income tax purposes, the equivalent of the foregoing shall
be expressed as the weighted average of the Uncertificated REMIC III
Pass-Through Rates on REMIC III Regular Interest LTIII-1AA, REMIC III Regular
Interest LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III Regular
Interest LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC III Regular
Interest LTIII-1A5, REMIC III Regular Interest LTIII-1A6, REMIC III Regular
Interest LTIII-1M1, REMIC III Regular Interest LTIII-1M2, REMIC III Regular
Interest LTIII-1M3, REMIC III Regular Interest LTIII-1ZZ and REMIC III Regular
Interest LTIII-1P, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC III Regular Interest.

         (b) For any Distribution Date and the Class II-AR-1 Certificates, a per
annum rate (subject to adjustment based on the actual number of days elapsed in
the related Interest Accrual Period) equal to the weighted average of the Net
Mortgage Rates of the Group II-1 Loans. For United States federal income tax
purposes, the equivalent of the foregoing shall be expressed as the weighted
average of the Uncertificated REMIC III Pass-Through Rate on REMIC III Regular
Interest LTIII-2GRP1, weighted on the basis of the Uncertificated Principal
Balance of such REMIC III Regular Interest.

         (c) For any Distribution Date and the Class II-AR-2 Certificates, will
be a per annum rate (subject to adjustment based on the actual number of days
elapsed in the related Interest Accrual Period) equal to the weighted average of
the Net Mortgage Rates of the Group II-2 Loans. For United States federal income
tax purposes, the equivalent of the foregoing shall be expressed as the weighted
average of the Uncertificated REMIC III Pass-Through Rate on REMIC III Regular
Interest LTIII-2GRP2, weighted on the basis of the Uncertificated Principal
Balance of such REMIC III Regular Interest.

         (d) For any Distribution Date and the Group II Mezzanine Certificates,
will be a per annum rate (subject to adjustment based on the actual number of
days elapsed in the related Interest Accrual Period) equal to the weighted
average (weighted on the basis of the results of subtracting from the aggregate
Principal Balance of the Group II-1 Loans and Group II-2 Loans the Certificate
Principal Balance of the Class II-AR-1 Certificates and Class II-AR-2
Certificates, respectively) of (i) the weighted average of the Net Mortgage
Rates of the Group II-1 Loans, and (ii) the weighted average of the Net Mortgage
Rates of the Group II-2 Loans. For United States federal income tax purposes,
the equivalent of the foregoing shall be expressed as the weighted average of
the Uncertificated REMIC III Pass-Through Rate on (i) REMIC III Regular Interest
LTIII-2SUB1, subject to a cap and a floor equal to the weighted average of the
Net Mortgage Rates on the Group II-1 Loans, and (ii) REMIC III Regular Interest
LTIII-2SUB2, subject to a cap and a floor equal to the weighted average of the
Net Mortgage Rates on the

                                      -43-
<PAGE>

Group II-2 Loans, weighted, in each case, on the basis of the Uncertificated
Principal Balance of such REMIC III Regular Interest.

         (e) For any Distribution Date and the Class VII-AR-1 Certificates, a
per annum rate equal to the weighted average of the Net Mortgage Rates of the
Group VII-1 Loans. For United States federal income tax purposes, the equivalent
of the foregoing shall be expressed as the weighted average of the
Uncertificated REMIC VI Pass-Through Rate on REMIC VI Regular Interest
LTVI-VIIAR1, weighted on the basis of the Uncertificated Principal Balance of
such REMIC VI Regular Interest.

         (f) For any Distribution Date and the Class VII-AR-2 Certificates, will
be a per annum rate equal to the weighted average of the Net Mortgage Rates of
the Group VII-2 Loans. For United States federal income tax purposes, the
equivalent of the foregoing shall be expressed as the weighted average of the
Uncertificated REMIC VI Pass-Through Rate on REMIC VI Regular Interest
LTVI-VIIAR2, weighted on the basis of the Uncertificated Principal Balance of
such REMIC VI Regular Interest.

         NET WAC RATE CARRYOVER AMOUNT: With respect to the Group I Senior
Certificates (other than the Class I-A-IO Certificates), Group II Senior, Group
I Mezzanine, Group II Mezzanine, Class VII-AR-1 and Class VII-AR-2 Certificates
and any Distribution Date on which the related Pass-Through Rate is limited to
the related Net WAC Pass-Through Rate, an amount equal to the sum of (i) the
excess of (x) the amount of interest such Certificates would have been entitled
to receive on such Distribution Date if the Net WAC Pass-Through Rate had not
been applicable to such Certificates on such Distribution Date over (y) the
amount of interest accrued on such Distribution Date at the related Net WAC
Pass-Through Rate plus (ii) the related Net WAC Rate Carryover Amount for the
previous Distribution Date not previously distributed together with interest
thereon at a rate equal to the related Pass-Through Rate for such Class of
Certificates for the most recently ended Interest Accrual Period determined
without taking into account the applicable Net WAC Pass-Through Rate.

         NONRECOVERABLE ADVANCE: With respect to any Loan, any Advance or
Servicing Advance which the related Servicer shall have determined to be a
Nonrecoverable Advance as defined in and pursuant to the related Servicing
Agreement, or which the Master Servicer shall have determined to be
nonrecoverable pursuant to Section 4.9, respectively, and which was or is
proposed to be made by such Servicer or the Master Servicer.

         NON-U.S. PERSON: A Person that is not a U.S. Person.

         NOTIONAL AMOUNT: With respect to the Class I-A-IO Certificates will be
as follows: the lesser of (x) from and including the 1st Distribution Date
through and including the 6th Distribution Date, $31,252,000; from and including
the 7th Distribution Date through and including the 10th Distribution Date,
$25,002,000; from and including the 11th Distribution Date through and including
the 13th Distribution Date, $22,500,000; from and including the 14th
Distribution Date through and including the 15th Distribution Date, $18,751,000;
from and including the 16th Distribution Date through and including the 19th
Distribution Date, $15,000,000; from and including the 20th Distribution Date
through and including the 21st Distribution Date, $12,501,000; from and
including the 22nd Distribution Date through and including the 23rd Distribution
Date, $10,000,000; on the 24th Distribution Date, $6,500,000;

                                      -44-
<PAGE>

thereafter $0 and (y) the then aggregate Principal Balance of the Group I Loans
(prior to giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period). For
United States federal income tax purposes, the Class I-A-IO Certificates will
not have a Notional Amount, but will be entitled to 100% of amounts distributed
on REMIC III Regular Interest LTIII-IO-A and REMIC III Regular Interest
LTIII-IO-B. With respect to the Class I-CE Certificates, immediately prior to
any Distribution Date, the aggregate of the Uncertificated Principal Balances of
the REMIC III Group I Regular Interests (other than REMIC III Regular Interest
LTIII-IO-A, REMIC III Regular Interest LTIII-IO-B and REMIC III Regular Interest
LTIII-1P). With respect to the Class II-CE Certificates, immediately prior to
any Distribution Date, the aggregate of the Uncertificated Principal Balances of
the REMIC III Group II Regular Interests (other than REMIC III Regular Interest
LTIII-2P). With respect to the Class-VII-AR-3 Certificates, the aggregate
Scheduled Principal Balance of Group VII Loans. For federal income tax purposes,
the Class VII-AR-3 Certificates will consist of two components which will have
notional amounts equal to (i) the Uncertificated Principal Balance of REMIC VI
Regular Interest LTVI-VIIAR1 and (ii) the Uncertificated Principal Balance of
REMIC VI Regular Interest LTVI-VIIAR2.

         OFFICER'S CERTIFICATE: With respect to any Person, a certificate signed
by the Chairman of the Board, the President or a Vice-President, however
denominated, of such Person (or, in the case of a Person which is not a
corporation, signed by the person or persons having like responsibilities), and
delivered to the Trustee.

         OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor, a Servicer, the Securities
Administrator or the Master Servicer, acceptable to the Trustee, except that any
opinion of counsel relating to (a) the qualification of any REMIC as a REMIC or
(b) compliance with the REMIC Provisions must be an opinion of Independent
counsel.

         ORIGINAL VALUE: With respect to any Loan other than a Loan originated
for the purpose of refinancing an existing mortgage debt, the lesser of (a) the
Appraised Value (if any) of the Mortgaged Property at the time the Loan was
originated or (b) the purchase price paid for the Mortgaged Property by the
Mortgagor. With respect to a Loan originated for the purpose of refinancing
existing mortgage debt, the Original Value shall be equal to the lesser of (a)
the Appraised Value of the Mortgaged Property at the time the Loan was
originated or (b) the appraised value at the time the refinanced mortgage debt
was incurred.

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

         OVERCOLLATERALIZATION AMOUNT: With respect to the Group I Loans and
Group II Loans and any Distribution Date following the Closing Date, the excess,
if any, of (a) the aggregate Principal Balances of the Group I Loans or Group II
Loans and related REO Properties immediately following such Distribution Date
over (b) the sum of the aggregate Certificate Principal Balances of the related
Senior Certificates, the related Mezzanine Certificates and the related Class P
Certificates as of such Distribution Date (after taking into account all
payments of principal on such Distribution Date).

                                      -45-
<PAGE>

         OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Distribution
Date and the Group I Loans and Group II Loans, the amount, if any, by which the
related Required Overcollateralization Amount exceeds the related
Overcollateralization Amount for such Distribution Date (calculated for this
purpose only after assuming that 100% of the related Principal Remittance Amount
on such Distribution Date has been distributed).

         OVERCOLLATERALIZATION REDUCTION AMOUNT: With respect to any
Distribution Date and the Group I Loans and Group II Loans, the lesser of (i)
the related Principal Remittance Amount on such Distribution Date and (ii) the
excess, if any, of (a) the related Overcollateralization Amount for such
Distribution Date (calculated for this purpose only after assuming that 100% of
the related Principal Remittance Amount on such Distribution Date has been
distributed) over (b) the related Required Overcollateralization Amount for such
Distribution Date; provided however that on any Distribution Date on which a
Group I Trigger Event or Group II Trigger Event, as applicable, is in effect,
the related Overcollateralization Reduction Amount shall equal zero.

         OVERCOLLATERALIZED GROUP: With respect to any Distribution Date and a
Group III-VII Loan Group, any Group which is not an Undercollateralized Group.

         OWNERSHIP INTEREST: With respect to any Residual Certificate, any
ownership or security interest in such Residual Certificate, including any
interest in a Residual Certificate as the Holder thereof and any other interest
therein whether direct or indirect, legal or beneficial, as owner or as pledge.

         PASS-THROUGH ENTITY: Any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies.

         PASS-THROUGH RATE: With respect to the Group I Senior Certificates
(other than the Class I-A-IO Certificates), Group II Senior, Group I Mezzanine,
Group II Mezzanine, Class VII-AR-1 and Class VII-AR-2 Certificates and any
Distribution Date, the lesser of (i) the interest rate listed in the Preliminary
Statement hereto and (ii) the related Net WAC Pass-Through Rate; provided, that
with respect to the Class I-A-5, Class I-A-6, Class I-M-1, Class I-M-2 and Class
I-M-3 Certificates, the interest rates listed in the Preliminary Statement
hereto shall be increased by 0.50% per annum on the Distribution Date following
the date of the first possible date on which the Group I Cleanup Call may be
exercised; provided, further, that the margins applicable to the interest rates
listed in the Preliminary Statement hereto with respect to the Class II-AR-1
Certificates and Class II-AR-2 Certificates will increase by 100% per annum and
the margins applicable to the interest rates listed in the Preliminary Statement
hereto with respect to the Group II Mezzanine Certificates will increase by 50%
per annum, on the Distribution Date following the date of the first possible
date on which the Group II Cleanup Call may be exercised. With respect to the
Class I-A-IO Certificates (i) for the first twelve Distribution Dates, 4.50% per
annum, (ii) for the next twelve Distribution Dates, 3.50% per annum and (iii)
for any Distribution Date thereafter, 0.00%. For United States federal income
tax purposes, however, the Class I-A-IO Certificates will not have a
Pass-Through Rate, and the Interest Distribution Amount for the Class I-A-IO
Certificates and any Distribution Date will be deemed to be 100% of the amount
distributed on REMIC III Regular Interest LTIII-IO-A and REMIC III Regular
Interest LTIII-IO-B for such Distribution Date.

                                      -46-
<PAGE>

         With respect to the Group III-VII Senior Certificates (other than the
Class VII-AR-1, Class VII-AR-2 and Class VII-AR-3 Certificates) and any
Distribution Date, a per annum rate equal to the excess of the weighted average
of the Net Mortgage Rates of the related Loans (weighted on the basis of the
Principal Balance of the related Loans) as of the Due Date in the month prior to
the month in which the related Distribution Date occurs, after taking into
account scheduled payments of principal received or advanced on that date.

         With respect to the Class VII-AR-1 Certificates, the lesser of (i)
One-Month LIBOR + 0.35% per annum and (ii) the applicable Net WAC Pass-Through
Rate for that Distribution Date. With respect to the Class VII-AR-2
Certificates, the lesser of (i) One-Month LIBOR + 0.45% per annum and (ii) the
applicable Net WAC Pass-Through Rate for that Distribution Date.

         For federal income tax purposes, the Pass-Through Rates for the (i)
Class III-AR-1, (ii) Class IV-AR-1, (iii) Class V-AR-1, (iv) Class VI-AR-1, (v)
Class VII-AR-1 and (vi) Class VII-AR-2 will be equal to the weighted average of
the Uncertificated REMIC VI Pass-Through Rate, weighted, in each case, on the
basis of such REMIC VI Regular Interest on (i) REMIC VI Regular Interest
LTVI-IIIA, (ii) REMIC VI Regular Interest LTVI-IVA, (iii) REMIC VI Regular
Interest LTVI-VA, (iv) REMIC VI Regular Interest LTVI-VI, (v) REMIC VI Regular
Interest LTVI-VIIAR1 and (i) REMIC VI Regular Interest LTVI-VIIAR2,
respectively.

         With respect to the Class VII-AR-3 Certificates, the excess of the
weighted average of the Net Mortgage Rates of the Group VII Loans over the
weighted average of the Pass-Through Rates on the Class VII-AR-1 Certificates
and Class VII-AR-2 Certificates. For federal income tax purposes, the equivalent
of the foregoing shall be expressed as (a) the excess, if any, of (i) the
weighted average of the REMIC VI Pass-Through Rate on REMIC VI Regular Interest
LTVI-VIIAR1 over (ii) the lesser of (x) One-Month LIBOR plus 0.35% per annum and
(y) the weighted average of the REMIC VI Pass-Through Rate on REMIC VI Regular
Interest LTVI-VIIAR1 and (b) the excess, if any, of (i) the weighted average of
the REMIC VI Pass-Through Rate on REMIC VI Regular Interest LTVI-VIIAR2 over
(ii) the lesser of (x) One-Month LIBOR plus 0.45% per annum and (y) the weighted
average of the REMIC VI Pass-Through Rate on REMIC VI Regular Interest
LTVI-VIIAR2.

         With respect to the Group III-VII Subordinate Certificates and any
Distribution Date, the Subordinate Interest Rate for such Distribution Date.

         With respect to the Class I-CE Certificates, on any Distribution Date,
a per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is (x) the sum of the amounts calculated pursuant to clauses (A)
through (L) below, and the denominator of which is (y) the aggregate of the
Uncertificated Principal Balances of the REMIC III Group I Regular Interests
(other than REMIC III Regular Interest LTIII-IO-A, REMIC III Regular Interest
LTIII-IO-B and REMIC III Regular Interest LTIII-1P). For purposes of calculating
the Pass-Through Rate for the Class I-CE Certificates, the numerator is equal to
the sum of the following components:

                  (A) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1AA minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1AA;

                                      -47-
<PAGE>

                  (B) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A1 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1A1;

                  (C) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A2 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1A2;

                  (D) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A3 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1A3;

                  (E) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A4 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1A4;

                  (F) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A5 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1A5;

                  (G) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A6 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1A6;

                  (H) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1M1 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1M1;

                  (I) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1M2 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1M2;

                  (J) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1M3 minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1M3;

                  (K) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1ZZ minus the Group I Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-1ZZ; and

                  (L) 100% of the interest distributable on REMIC III Regular
Interest LTIII-1P.

         With respect to the Class II-CE Certificates, on any Distribution Date,
a per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is (x) the sum of the amounts calculated pursuant to clauses (A)
through (H) below, and the denominator of which is (y) the aggregate of the
Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AA, REMIC
III Regular Interest LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC
III Regular Interest LTIII-2MR1, REMIC III Regular Interest LTIII-2MR2, REMIC
III

                                      -48-
<PAGE>

Regular Interest LTIII-2MR3 and REMIC III Regular Interest LTIII-2ZZ. For
purposes of calculating the Pass-Through Rate for the Class II-CE Certificates,
the numerator is equal to the sum of the following components:

                  (A) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2AA minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-2AA;

                  (B) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2AR1 minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-2AR1;

                  (C) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2AR2 minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-2AR2;

                  (D) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2MR1 minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-2MR1;

                  (E) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2MR2 minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-2MR2;

                  (F) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2MR3 minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-2MR3;

                  (G) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2ZZ minus the Group II Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC III Regular
Interest LTIII-2ZZ; and

                  (H) 100% of the interest distributable on REMIC III Regular
Interest LTIII-2P.

         PAYOFF: Any voluntary payment of principal on a Loan by a Mortgagor
equal to the entire outstanding Principal Balance of such Loan, if received in
advance of the last scheduled Due Date for such Loan and is not accompanied by
scheduled interest due on any date or dates in any month or months subsequent to
the month of such payment-in-full.

         PERCENTAGE INTEREST: With respect to any Class of Certificates (other
than the Residual Certificates) and any date of determination, the undivided
percentage ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance or Notional Amount of all of the
Certificates of such Class. Each Certificate is issuable only in minimum
Percentage Interests corresponding to the Authorized Denomination of the related
Class of Certificates; provided, however, that a single Certificate of each such
Class of Certificates may be issued having a Percentage Interest corresponding
to the remainder of the aggregate initial Certificate Principal Balance of such

                                      -49-
<PAGE>

Class or to an otherwise Authorized Denomination for such Class plus such
remainder. With respect to any Residual Certificate, the undivided percentage
ownership in such Class evidenced by such Certificate, is as set forth on the
face of such Certificate.

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

         PERMITTED TRANSFEREE: With respect to the holding or ownership of any
Residual Certificate, any Person other than (i) the United States, a State or
any political subdivision thereof, or any agency or instrumentality of any of
the foregoing, (ii) a foreign government or International Organization, or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from the taxes imposed by Chapter 1 of the Code (unless such organization
is subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Code Section 1381(a)(2)(C), (v) any electing large partnership under Section 775
of the Code, (vi) any Person from whom the Trustee or the Securities
Administrator has not received an affidavit to the effect that it is not a
"disqualified organization" within the meaning of Section 860E(e)(5) of the
Code, and (vii) any other Person so designated by the Depositor based upon an
Opinion of Counsel that the transfer of an Ownership Interest in a Residual
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that the Certificates are outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in Code Section 7701 or successor provisions. A corporation shall not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof if all of its activities are subject to tax, and, with the
exception of the Freddie Mac, a majority of its board of directors is not
selected by such governmental unit.

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

         PLAN: As defined in Section 5.3.

         PREPAID MONTHLY PAYMENT: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Loan on its scheduled
Due Date and held in the related Protected Account until the related Servicer
Remittance Date following its scheduled Due Date.

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

         PREPAYMENT CHARGE SCHEDULE: As of any date, the list of Loans providing
for a Prepayment Charge included in the Trust Fund on such date, attached hereto
as Schedule Two (including the prepayment charge summary attached thereto). The
Depositor shall deliver or

                                      -50-
<PAGE>

cause the delivery of the Prepayment Charge Schedule to the Master Servicer, the
Trustee and the Credit Risk Manager on the Closing Date. The Prepayment Charge
Schedule shall set forth the following information with respect to each
Prepayment Charge:

                  (i)      the Loan identifying number;

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

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

                  (iv)     the term of the related Prepayment Charge;

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

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

         PREPAYMENT INTEREST SHORTFALL: For any Distribution Date and any Loan
on which a Payoff was made by a Mortgagor during the related Prepayment Period,
an amount equal to one month's interest at the applicable Net Mortgage Rate on
such Loan less the amount of interest actually paid by the Mortgagor with
respect to such Payoff.

         PREPAYMENT PERIOD: For any Distribution Date and the Loans serviced by
M&T, the period beginning on the 16th day of the month preceding the month in
which such Distribution Date occurs and ending on the 15th day of the month in
which such Distribution Date occurs with respect to Payoffs, and the calendar
month immediately preceding the month in which such Distribution Date occurs
with respect to Curtailments. For any Distribution Date and the Loans serviced
by Countrywide, the period beginning on the 2nd day of the month preceding the
month in which such Distribution Date occurs and ending on the 1st day of the
month in which such Distribution Date occurs. For any Distribution Date and the
Loans serviced by Chase, Greenpoint, GMAC and National City, the calendar month
immediately preceding the month in which such Distribution Date occurs.

         PRINCIPAL BALANCE: For any Loan and at the time of any determination,
the principal balance of such Loan remaining to be paid at the close of business
on the Cut-Off Date, after deduction of all principal payments due on or before
the Cut-Off Date whether or not received, reduced by the principal portion of
all amounts received with respect to such Loan after the Cut-Off Date and
distributed or to be distributed to Certificateholders through the Distribution
Date in the month of such determination. In the case of a Substitute Loan,
"Principal Balance" shall mean, at the time of any determination, the principal
balance of such Substitute Loan on the related Cut-Off Date, reduced by the
principal portion of all amounts received with respect to such Loan after the
Cut-Off Date and distributed or to be distributed to Certificateholders through
the Distribution Date in the month of determination. The Principal Balance of a
Liquidated Loan shall be zero.

                                      -51-
<PAGE>

         PRINCIPAL DISTRIBUTION AMOUNT: Principal Distribution Amount for any
Distribution Date and a Loan Group consisting of Group III-VII Loans will be the
sum of:

       (1)        scheduled principal payments on the related Loans due during
                  the related Due Period;

       (2)        the principal portion of repurchase proceeds received with
                  respect to the related Loans which were repurchased as
                  permitted or required pursuant to Section 2.3 of this
                  Agreement during the related Prepayment Period;

       (3)        any other unscheduled payments of principal which were
                  received on the related Loans during the related Prepayment
                  Period, other than Payoffs, Curtailments or Liquidation
                  Principal; plus

       (4)        Transfer Payments Received, plus interest thereon, for such
                  Loan Group and Distribution Date; minus

       (5)        Transfer Payments Made, plus interest thereon, from such Loan
                  Group and Distribution Date.

         PRINCIPAL PREPAYMENT: Any payment of principal on a Loan which
constitutes a Payoff or a Curtailment.

         PRINCIPAL PREPAYMENT AMOUNT: On any Distribution Date and for any Loan
Group, the sum of all (i) Curtailments received during the related Prepayment
Period and (ii) Payoffs received during the related Prepayment Period.

         PRINCIPAL REMITTANCE AMOUNT: The Group I Principal Remittance Amount or
Group II Principal Remittance Amount, as applicable.

         PRO RATA ALLOCATION: For any Distribution Date and any Group III-VII
Senior Certificate and Group III-VII Subordinate Certificate, pro rata according
to their outstanding Certificate Principal Balance.

         PROTECTED ACCOUNT: An account or accounts established and maintained
for the benefit of the Certificateholders by each Servicer with respect to the
related Loans and with respect to REO Property pursuant to the applicable
Servicing Agreement.

         PURCHASE OBLIGATION: An obligation of the Depositor to repurchase Loans
under the circumstances and in the manner provided in Section 2.3.

         PURCHASE PRICE: With respect to any Loan to be purchased pursuant to a
Purchase Obligation, or any Loan to be purchased or repurchased relating to an
REO Property, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee and the Securities Administrator, an amount equal to the
sum of (i) 100% of the Principal Balance thereof as of the date of purchase (or,
in the case of an REO Property being purchased pursuant to Section 9.1, 100% of
the fair market value of such REO Property, such valuation to be conducted by an
appraiser mutually agreed upon by the related Terminator and the Securities
Administrator, in their reasonable discretion), (ii) in the case of (x) a Loan,
accrued interest on such Principal Balance at the applicable Net Mortgage Rate
from the date interest was last paid by the related Mortgagor or the date an
Advance by the applicable Servicer or the Master Servicer, which

                                      -52-
<PAGE>

payment or Advance had as of the date of purchase been distributed pursuant to
Section 4.1, 4.3 or 4.5, through the end of the calendar month in which the
purchase is to be effected (or, in the case of a Loan being purchased pursuant
to Section 9.1, through the end of the calendar month immediately preceding the
month in which the purchase is to be effected) and (y) an REO Property, the sum
of (1) accrued interest on such Principal Balance at the applicable Net Mortgage
Rate from the date interest was last paid by the related Mortgagor or the date
an Advance by the applicable Servicer or the Master Servicer through the end of
the calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest in accordance with the
applicable Servicing Agreement, (iii) any unreimbursed Servicing Advances and
Advances (including Nonrecoverable Advances) and any unpaid Servicing Fees
allocable to such Loan or REO Property and (iv) in the case of a Loan required
to be purchased pursuant to Section 2.3, expenses reasonably incurred or to be
incurred by the Master Servicer, the Servicers, the Trustee or the Securities
Administrator in respect of the breach or defect giving rise to a Purchase
Obligation and any costs and damages incurred by the Trust Fund in connection
with any violation by any such Mortgage Loan of any predatory or abusive lending
law.

         RATE CHANGE DATE: With respect to a REMIC II Regular Interest
Component, the first month in which the pass-through rate for such component is
equal to 0.00%.

         RATING AGENCY: Initially, each of S&P and Moody's; thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Depositor, or their respective successors in
interest.

         RATINGS: As of any date of determination, the ratings, if any, of the
Certificates as assigned by each Rating Agency.

         REALIZED LOSS: (a) For any Distribution Date and any Group I Loan or
Group II Loan which became a Liquidated Loan during the related Prepayment
Period, the sum of (i) the Principal Balance of such Group I Loan or Group II
Loan remaining outstanding (after all recoveries of principal have been applied
thereto) and the principal portion of Advances which have been reimbursed with
respect to such Loan, and (ii) the accrued interest on such Loan remaining
unpaid and the interest portion of Advances which have been reimbursed from
Liquidation Proceeds with respect to such Loan. The amounts described in clause
(i) shall be the principal portion of Realized Losses for the Group I Loans and
Group II Loans and the amounts described in clause (ii) shall be the interest
portion of Realized Losses for the Group I Loans and Group II Loans. For any
Distribution Date and any Group I Loan or Group II Loan which is not a
Liquidated Loan, the amount of any Bankruptcy Loss incurred with respect to such
Loan as of the related Due Date shall be treated as a Realized Loss.

         (b) For any Distribution Date and any Group III-VII Loan which became a
Liquidated Loan during the related Prepayment Period the portion of the unpaid
principal balance remaining, if any, plus interest thereon through the last day
of the month in which the related Group III-VII Loan was finally liquidated or
charged-off, after application of all amounts

                                      -53-
<PAGE>

recovered (net of amounts reimbursable to the related Servicer or Master
Servicer for Advances, Servicing Advances and other related expenses, including
attorneys' fees) towards interest and principal owing on the Group III-VII Loan.

         RECORD DATE: With respect to each Distribution Date and each Class of
Certificates (other than the Class I-A-1, Group II Senior and Group II Mezzanine
Certificates) the last Business Day of the month immediately preceding the month
of the related Distribution Date. With respect to the Class I-A-1, Group II
Senior and Group II Mezzanine Certificates, the Business Day preceding the
related Distribution Date.

         REGULAR INTEREST CERTIFICATES: The Certificates, other than the Class
I/II-R Certificates and the Class A-R Certificate.

         REGULATION S PERMANENT GLOBAL CERTIFICATE: As defined in Section 5.1.

         REGULATION S TEMPORARY GLOBAL CERTIFICATE: As defined in Section 5.1.

         RELEASE DATE: The 40th day after the later of (i) commencement of the
offering of the Certificates and (ii) the Closing Date.

         RELIEF ACT: The Servicemembers Civil Relief Act or similar state laws.

         RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution Date
and a Loan, the reduction in the amount of interest collectible on such Loan for
the most recently ended calendar month immediately preceding such Distribution
Date as a result of the application of the 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, with respect to which a REMIC
election is to be made, consisting of: (i) the Group I Loans (exclusive of
payments of principal and interest due on or before the Cut-off Date, if any,
received by the Master Servicer which shall not constitute an asset of the Trust
Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of such Loans (exclusive of any Prepayment Charges and late payment
fees received on such Loans), together with all documents included in the
related Mortgage File, subject to Section 2.1; (ii) such funds or assets as from
time to time are deposited in the related Distribution Account in respect of a
Loan and belonging to the Trust Fund; (iii) any REO Property in respect of a
Group I Loan; (iv) the primary hazard insurance policies, if any, the primary
insurance policies, if any, and all other insurance policies with respect to the
Loans; and (v) the Depositor's interest in respect of the representations and
warranties made by the Seller in the Mortgage Loan Purchase Agreement as
assigned to the Trustee pursuant to Section 2.1 hereof. REMIC I specifically
excludes the Group I Reserve Fund and the Class I-A-1 Cap Contract.

         REMIC I REGULAR INTEREST LTI-1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal,

                                      -54-
<PAGE>

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

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

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

         REMIC I REGULAR INTEREST LTI-IO-3: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-3 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-4: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-4 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-5: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-5 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-6: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-6 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-7: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-7 shall accrue
interest at the related Uncertificated REMIC I

                                      -55-
<PAGE>

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

         REMIC I REGULAR INTEREST LTI-IO-8: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-8 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

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

         REMIC I REGULAR INTERESTS: REMIC I Regular Interest LTI-1, REMIC I
Regular Interest LTI-IO-1, REMIC I Regular Interest LTI-IO-2, REMIC I Regular
Interest LTI-IO-3, REMIC I Regular Interest LTI-IO-4, REMIC I Regular Interest
LTI-IO-5, REMIC I Regular Interest LTI-IO-6, REMIC I Regular Interest LTI-IO-7,
REMIC I Regular Interest LTI-IO-8 and REMIC I Regular Interest LTI-P.

         REMIC II: The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) the Group II Loans (exclusive of
payments of principal and interest due on or before the Cut-off Date, if any,
received by the Master Servicer which shall not constitute an asset of the Trust
Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of the Group II Loans (exclusive of any Prepayment Charges and late
payment fees received on the Group II Loans), together with all documents
included in the related Mortgage File, subject to Section 2.1; (ii) such funds
or assets as from time to time are deposited in the related Distribution Account
in respect of a Group II Loan and belonging to the Trust Fund; (iii) any REO
Property in respect of a Group II Loan; (iv) the primary hazard insurance
policies, if any, the primary insurance policies, if any, and all other
insurance policies with respect to the Loans and (v) the Depositor's interest in
respect of the representations and warranties made by the Seller in the Mortgage
Loan Purchase Agreement as assigned to the Trustee pursuant to Section 2.1
hereof. REMIC II specifically excludes the Group II Reserve Fund and the Class
II-AR-1 Cap Contract, Class II-AR-2 Cap Contract, Class II-MR-1 Cap Contract,
Class II-MR-2 Cap Contract and Class II-MR-3 Cap Contract.

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

                                      -56-
<PAGE>

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

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

         REMIC II REGULAR INTERESTS: REMIC II Regular Interest LTII-1, REMIC II
Regular Interest LTII-2 and REMIC II Regular Interest LTII-P.

         REMIC III: The pool of assets consisting of the REMIC I Regular
Interests and the REMIC II Regular Interests and all payments of principal or
interest on or with respect to the REMIC I Regular Interests and the REMIC II
Regular Interests after the Cut-Off Date.

         REMIC III GROUP I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Group I Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1AA minus the Group I Marker Rate, divided by (b) 12.

         REMIC III GROUP I OVERCOLLATERALIZATION AMOUNT: With respect to any
date of determination, (i) 1% of the aggregate Uncertificated Principal Balances
of the REMIC III Group I Regular Interests minus (ii) the aggregate of the
Uncertificated Principal Balances of REMIC III Regular Interest LTIII-1A1, REMIC
III Regular Interest LTIII-1A2, REMIC III Regular Interest LTIII-1A3, REMIC III
Regular Interest LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC III
Regular Interest LTIII-1A6, REMIC III Regular Interest LTIII-1M1, REMIC III
Regular Interest LTIII-1M2, REMIC III Regular Interest LTIII-1M3 and REMIC III
Regular Interest LTII-1P, in each case as of such date of determination.

         REMIC III GROUP I OVERCOLLATERALIZATION TARGET AMOUNT: 1% of the Group
I Required Overcollateralization Amount.

         REMIC III GROUP I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Group I Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC III Regular Interest
LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III Regular Interest
LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC III Regular Interest
LTIII-1A5, REMIC III Regular Interest LTIII-1A6, REMIC III Regular Interest
LTIII-1M1, REMIC III Regular Interest LTIII-1M2, REMIC III Regular Interest
LTIII-1M3 and REMIC III Regular Interest LTIII-1ZZ.

                                      -57-
<PAGE>

         REMIC III GROUP I REGULAR INTEREST LTIII-1ZZ MAXIMUM INTEREST DEFERRAL
AMOUNT: With respect to any Distribution Date, the excess of (i) accrued
interest at the Uncertificated REMIC III Pass-Through Rate applicable to REMIC
III Regular Interest LTIII-1ZZ for such Distribution Date on a balance equal to
the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1ZZ
minus the REMIC III Group I Overcollateralization Amount, in each case for such
Distribution Date, over (ii) Uncertificated Accrued Interest on REMIC III
Regular Interest LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
Regular Interest LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC III
Regular Interest LTIII-1A5, REMIC III Regular Interest LTIII-1A6, REMIC III
Regular Interest LTIII-1M1, REMIC III Regular Interest LTIII-1M2 and REMIC III
Regular Interest LTIII-1M3 for such Distribution Date, with the rate on each
such REMIC III Regular Interest subject to a cap equal to the related
Pass-Through Rate for the Corresponding Certificate.

         REMIC III GROUP I REGULAR INTERESTS: REMIC III Regular Interest
LTIII-1AA, REMIC III Regular Interest LTIII-1A1, REMIC III Regular Interest
LTIII-1A2, REMIC III Regular Interest LTIII-1A3, REMIC III Regular Interest
LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC III Regular Interest
LTIII-1A6, REMIC III Regular Interest LTIII-1M1, REMIC III Regular Interest
LTIII-1M2, REMIC III Regular Interest LTIII-1M3, REMIC III Regular Interest
LTIII-1ZZ, REMIC III Regular Interest LTIII-1P, REMIC III Regular Interest
LTIII-IO-A and REMIC III Regular Interest LTIII-IO-B.

         REMIC III GROUP II INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Group II Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2AA minus the Group II Marker Rate, divided by (b)
12.

         REMIC III GROUP II MARKER ALLOCATION PERCENTAGE: 50% of any amount
payable or loss attributable from the Group II Loans, which shall be allocated
to REMIC III Regular Interest LTIII-2AA, REMIC III Regular Interest LTIII-2AR1,
REMIC III Regular Interest LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1,
REMIC III Regular Interest LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3,
REMIC III Regular Interest LTIII-2ZZ and REMIC III Regular Interest LTIII-2P.

         REMIC III GROUP II OVERCOLLATERALIZATION AMOUNT: With respect to any
date of determination, (i) 0.50% of the aggregate Uncertificated Principal
Balances of the REMIC III Group II Regular Interests minus (ii) the aggregate of
the Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AR1,
REMIC III Regular Interest LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1,
REMIC III Regular Interest LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3 and
REMIC III Regular Interest LTIII-2P, in each case as of such date of
determination.

         REMIC III GROUP II OVERCOLLATERALIZATION TARGET AMOUNT: 0.50% of the
Group II Required Overcollateralization Amount.

         REMIC III GROUP II PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to
any Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Group II Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the

                                      -58-
<PAGE>

numerator of which is two times the aggregate of the Uncertificated Principal
Balances of REMIC III Regular Interest LTIII-2AR1, REMIC III Regular Interest
LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1, REMIC III Regular Interest
LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3 and REMIC III Regular Interest
LTIII-2ZZ.

         REMIC III GROUP II REGULAR INTEREST LTIII-2ZZ MAXIMUM INTEREST DEFERRAL
AMOUNT: With respect to any Distribution Date, the excess of (i) accrued
interest at the Uncertificated REMIC III Pass-Through Rate applicable to REMIC
III Regular Interest LTIII-2ZZ for such Distribution Date on a balance equal to
the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-2ZZ
minus the REMIC III Group II Overcollateralization Amount, in each case for such
Distribution Date, over (ii) Uncertificated Accrued Interest on REMIC III
Regular Interest LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC III
Regular Interest LTIII-2MR1, REMIC III Regular Interest LTIII-2MR2 and REMIC III
Regular Interest LTIII-2MR3 for such Distribution Date, with the rate on each
such REMIC III Regular Interest subject to a cap equal to the related
Pass-Through Rate for the Corresponding Certificate.

         REMIC III GROUP II REGULAR INTERESTS: REMIC III Regular Interest
LTIII-2AA, REMIC III Regular Interest LTIII-2AR1, REMIC III Regular Interest
LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1, REMIC III Regular Interest
LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3, REMIC III Regular Interest
LTIII-2ZZ, REMIC III Regular Interest LTIII-2P, REMIC III Regular Interest
LTIII-2SUB1, REMIC III Regular Interest LTIII-2GRP1, REMIC III Regular Interest
LTIII-2SUB2, REMIC III Regular Interest LTIII-2GRP2 and REMIC III Regular
Interest LTIII-2XX.

         REMIC III REGULAR INTEREST: Any one of the separate non-certificated
beneficial ownership interests in REMIC III issued hereunder and designated as a
Regular Interest in REMIC III. Each REMIC III Regular Interest shall accrue
interest at the related Uncertificated REMIC III Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal (other
than REMIC III Regular Interest LTIII-IO-A and REMIC III Regular Interest
LTIII-IO-B), subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.

         REMIC III SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable from
or loss attributable to the Group II Loans, which shall be allocated to REMIC
III Regular Interest LTIII-2SUB1, REMIC III Regular Interest LTIII-2GRP1, REMIC
III Regular Interest LTIII-2SUB2, REMIC III Regular Interest LTIII-2GRP2 and
REMIC III Regular Interest LTIII-2XX.

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

         REMIC IV: The pool of assets consisting of the REMIC III Regular
Interests and all payments of principal or interest on or with respect to the
REMIC III Regular Interests after the Cut Off Date.

                                      -59-
<PAGE>

         REMIC V: The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) the Group III-VII Loans (exclusive of
payments of principal and interest due on or before the Cut-off Date, if any,
received by the Master Servicer which shall not constitute an asset of the Trust
Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of the Group III-VII Loans (exclusive of any Prepayment Charges and
late payment fees received on the Group III-VII Loans), together with all
documents included in the related Mortgage File, subject to Section 2.1; (ii)
such funds or assets as from time to time are deposited in the related
Distribution Account in respect of a Group III-VII Loan and belonging to the
Trust Fund; (iii) any REO Property in respect of a Group III-VII Loan; (iv) the
primary hazard insurance policies, if any, the primary insurance policies, if
any, and all other insurance policies with respect to the Loans and (v) the
Depositor's interest in respect of the representations and warranties made by
the Seller in the Mortgage Loan Purchase Agreement as assigned to the Trustee
pursuant to Section 2.1 hereof. REMIC V specifically excludes the Group VII
Reserve Fund and the Class VII-AR-1 Cap Contract and the Class VII-AR-2 Cap
Contract.

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

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

                                      -60-
<PAGE>

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

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

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

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

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

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

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

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

                                      -61-
<PAGE>

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

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

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

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

         REMIC V REGULAR INTERESTS: REMIC V Regular Interest LTV-IIISUB, REMIC V
Regular Interest LTV-IIIGRP, REMIC V Regular Interest LTV-IVSUB, REMIC V Regular
Interest LTV-IVGRP, REMIC V Regular Interest LTV-VSUB, REMIC V Regular Interest
LTV-VGRP, REMIC V Regular Interest LTV-VISUB, REMIC V Regular Interest
LTV-VIGRP, REMIC V Regular Interest LTV-VII-1SUB, REMIC V Regular Interest
LTV-VII-1GRP, REMIC V Regular Interest LTV-VII-2SUB, REMIC V Regular Interest
LTV-VII-2GRP, REMIC V Regular Interest LTV-XX and REMIC V Regular Interest
LTV-R.

         REMIC V SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each REMIC V Regular Interest ending with the designation
"SUB,", equal to the ratio among, with respect to each such REMIC V Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the Group
III Loans, Group IV Loans, Group V Loans, Group VI Loans, Group VII-1 or Group
VII-2 Loans, as applicable over (y) the current Certificate Principal Balance of
related Class of Senior Certificates.

         REMIC VI: The pool of assets consisting of the REMIC V Regular
Interests and all payments of principal or interest on or with respect to the
REMIC V Regular Interests after the Cut-Off Date.

                                      -62-
<PAGE>

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

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

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

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

         REMIC VI REGULAR INTEREST LTVI-VII-AR1: One of the separate
non-certificated beneficial ownership interests in REMIC VI issued hereunder and
designated as a Regular Interest in REMIC VI. REMIC VI Regular Interest
LTVI-VII-AR1 shall accrue interest at the related Uncertificated REMIC VI
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

         REMIC VI REGULAR INTEREST LTVI-VII-AR2: One of the separate
non-certificated beneficial ownership interests in REMIC VI issued hereunder and
designated as a Regular Interest in REMIC VI. REMIC VI Regular Interest
LTVI-VII-AR2 shall accrue interest at the related Uncertificated REMIC VI
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

                                      -63-
<PAGE>

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

         REMIC VI REGULAR INTEREST LTVI-B1: One of the separate non-certificated
beneficial ownership interests in REMIC VI issued hereunder and designated as a
Regular Interest in REMIC VI. REMIC VI Regular Interest LTVI-B1 shall accrue
interest at the related Uncertificated REMIC VI Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC VI REGULAR INTEREST LTVI-B2: One of the separate non-certificated
beneficial ownership interests in REMIC VI issued hereunder and designated as a
Regular Interest in REMIC VI. REMIC VI Regular Interest LTVI-B2 shall accrue
interest at the related Uncertificated REMIC VI Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC VI REGULAR INTEREST LTVI-B3: One of the separate non-certificated
beneficial ownership interests in REMIC VI issued hereunder and designated as a
Regular Interest in REMIC VI. REMIC VI Regular Interest LTVI-B3 shall accrue
interest at the related Uncertificated REMIC VI Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC VI REGULAR INTEREST LTVI-B4: One of the separate non-certificated
beneficial ownership interests in REMIC VI issued hereunder and designated as a
Regular Interest in REMIC VI. REMIC VI Regular Interest LTVI-B4 shall accrue
interest at the related Uncertificated REMIC VI Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC VI REGULAR INTEREST LTVI-51: One of the separate non-certificated
beneficial ownership interests in REMIC VI issued hereunder and designated as a
Regular Interest in REMIC VI. REMIC VI Regular Interest LTVI-B5 shall accrue
interest at the related Uncertificated REMIC VI Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

                                      -64-
<PAGE>

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

         REMIC VI REGULAR INTERESTS: REMIC VI Regular Interest LTVI-IIIA, REMIC
VI Regular Interest LTVI-IVA, REMIC VI Regular Interest LTVI-VA, REMIC VI
Regular Interest LTVI-VIA, REMIC VI Regular Interest LTVI-VII-AR1, REMIC VI
Regular Interest LTVI-VII-AR2, REMIC VI Regular Interest LTVI-M, REMIC VI
Regular Interest LTVI-B1 REMIC VI Regular Interest LTVI-B2, REMIC VI Regular
Interest LTVI-B3, REMIC VI Regular Interest LTVI-B4, REMIC VI Regular Interest
LTVI-B5 and REMIC VI Regular Interest LTVI-R.

         REMIC VII: The pool of assets consisting of the REMIC VI Regular
Interests and all payments of principal or interest on or with respect to the
REMIC VI Regular Interests after the Cut Off Date.

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

         REMIC REGULAR INTEREST: A REMIC I Regular Interest, REMIC II Regular
Interest, REMIC III Regular Interest, REMIC V Regular Interest, REMIC VI Regular
Interest or a Regular Interest Certificate.

         REMITTANCE REPORT: A report by the Securities Administrator pursuant to
Section 4.8.

         REO DISPOSITION: The sale or other disposition of an REO Property on
behalf of REMIC I.

         REO IMPUTED INTEREST: As to any REO Property, for any calendar month
during which such REO Property was at any time part of REMIC I, one month's
interest at the applicable Net Mortgage Rate on the Scheduled Principal Balance
of such REO Property (or, in the case of the first such calendar month, of the
related Loan, if appropriate) as of the close of business on the Distribution
Date in such calendar month.

         REO PROPERTY: A Group I REO Property, Group II REO Property or Group
III-VII REO Property.

         REQUIRED OVERCOLLATERALIZATION AMOUNT: The Group I Required
Overcollateralization Amount or the Group II Required Overcollateralization
Amount, as applicable.

         REQUIRED OVERCOLLATERALIZATION PERCENTAGE: For any Distribution Date
and the Group I Loans and Group II Loans, a percentage equal to (a) the related
Required Overcollateralization Amount divided by (b) the aggregate Principal
Balance of the Loans in the related Loan Group

                                      -65-
<PAGE>

as of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period, and after reduction for Realized Losses on the Loans
in the related Loan Group incurred during the related Prepayment Period).

         RESERVE FUND: The Group I Reserve Fund, Group II Reserve Fund or Group
VII Reserve Fund, as applicable.

         RESERVE INTEREST RATE: The rate per annum that the Securities
Administrator determines to be either (i) the arithmetic mean of the one-month
U.S. dollar lending rates which New York City banks selected by the Securities
Administrator are quoting on the relevant LIBOR Determination Date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that the Securities Administrator can determine no such arithmetic
mean, the lowest one-month U.S. dollar lending rate which New York City banks
selected by the Securities Administrator are quoting on such Interest
Determination Date to leading European banks.

         RESIDUAL CERTIFICATES: The Class I/II-R Certificates and Class A-R
Certificates.

         RESPONSIBLE OFFICER: When used with respect to the Trustee, any officer
in the corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject. When used with respect to the Master Servicer or the Securities
Administrator, the Chairman or Vice-Chairman of the Board of Directors or
Trustees, the Chairman or Vice-Chairman of the Executive or Standing Committee
of the Board of Directors or Trustees, the President, the Chairman of the
Committee on Trust Matters, any Vice-President, any Assistant Vice-President,
the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer,
the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust
Officer, the Controller, any Assistant Controller or any other officer
customarily performing functions similar to those performed by any of the
above-designated officers and in each case having direct responsibility for the
administration of this Agreement, and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject. When used with respect
to the Depositor or any other Person, the Chairman or Vice-Chairman of the Board
of Directors, the Chairman or Vice-Chairman of any executive committee of the
Board of Directors, the President, any Vice-President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, or any other
officer of the Depositor customarily performing functions similar to those
performed by any of the above-designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.

         S&P: Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc. provided, that at any time it is a Rating Agency.

         SCHEDULED PRINCIPAL BALANCE: With respect to any Loan and a Due Date,
the unpaid principal balance of such Loan as specified in the amortization
schedule (before any adjustment

                                      -66-
<PAGE>

to such schedule by reason of bankruptcy or similar proceeding or any moratorium
or similar waiver or grace period) for such Due Date, after giving effect to any
previously applied Curtailments, the payment of principal on such Due Date and
any reduction of the principal balance of such Loan by a bankruptcy court,
irrespective of any delinquency in payment by the related Mortgagor.

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

         SECURITIES ADMINISTRATOR: As of the Closing Date, Wells Fargo Bank,
N.A. and thereafter, its respective successors in interest who meet the
qualifications of this Agreement. The Securities Administrator and the Master
Servicer shall at all times be the same Person.

         SELLER: DB Structured Products, Inc., or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement and in its
capacity as assignor under the Assignment Agreements.

         SENIOR CERTIFICATES: The Class I-A-1, Class I-A-2, Class I-A-3, Class
I-A-4, Class I-A-5, Class I-A-6, Class I-A-IO, Class II-AR-1, Class II-AR-2,
Class III-AR-1, Class IV-AR-1, Class V-AR-1, Class VI-AR-1, Class VII-AR-1,
Class VII-AR-2, Class VII-AR-3 and Class A-R Certificates, collectively.

         SENIOR INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution
Date and the Group I Senior Certificates or Group II Senior Certificates, as
applicable, an amount equal to the sum of (i) the Interest Distribution Amount
for such Distribution Date for Certificates and (ii) the Interest Carry Forward
Amount, if any, for such Distribution Date for such Certificates.

         SENIOR INTEREST SHORTFALL AMOUNT: For any Distribution Date and any
Class of Group III-VII Senior Certificates, the amount by which the aggregate
Interest Distribution Amounts payable to that class of Group III-VII Senior
Certificates on such Distribution Date exceeds the related Available
Distribution Amount.

         SENIOR LIQUIDATION AMOUNT: For any Distribution Date and any Group
III-VII Loan Group, the aggregate, for each Loan in such Loan Group which became
a Liquidated Loan during the calendar month preceding the month of such
Distribution Date, of the lesser of:

         (1)      the related Senior Percentage of the Principal Balance of such
                  Loan; and

         (2)      the related Senior Prepayment Percentage of the Liquidation
                  Principal with respect to such Loan.

         SENIOR PERCENTAGE: For each Loan Group consisting of Group III-VII
Loans and any Distribution Date, the percentage equivalent of a fraction, not
less than zero, the numerator of which is the aggregate Certificate Principal
Balance of the related Group III-VII Senior Certificates immediately prior to
that Distribution Date, and the denominator of which is the sum of the Principal
Balances of the related Group III-VII Loans as of the first day of the related
Due Period.

         SENIOR PREPAYMENT PERCENTAGE: for any Distribution Date occurring
during the seven years beginning on the first Distribution Date, 100%, and for
any Distribution Date occurring on

                                      -67-
<PAGE>

or after the seventh anniversary of the first Distribution Date will be as
follows: for any Distribution Date in the first year thereafter, the related
Senior Percentage plus 70% of the related Subordinate Percentage for the
Distribution Date; for any Distribution Date in the second year thereafter, the
related Senior Percentage plus 60% of the related Subordinate Percentage for the
Distribution Date; for any Distribution Date in the third year thereafter, the
related Senior Percentage plus 40% of the related Subordinate Percentage for the
Distribution Date; for any Distribution Date in the fourth year thereafter, the
related Senior Percentage plus 20% of the related Subordinate Percentage for the
Distribution Date; and for any Distribution Date thereafter, the related Senior
Percentage for the Distribution Date (unless on any Distribution Date the Senior
Percentage with respect to a Group III-VII Senior Certificate exceeds the
initial Senior Percentage of such Senior Certificate as of the Closing Date, in
which case such Senior Prepayment Percentage for the Distribution Date will once
again equal 100%).

         Notwithstanding the foregoing, the related Senior Prepayment Percentage
for any Loan Group will equal 100% unless both of the step down conditions
listed below are satisfied with respect to all of the Group III-VII Loans:

    o    the aggregate Principal Balance of all of the Group III-VII Loans
         delinquent 60 days or more (including Group III-VII Loans in
         foreclosure, real estate owned by the trust fund and Group III-VII
         Loans the Mortgagors of which are in bankruptcy) (averaged over the
         preceding six month period), as a percentage of (a) if such date is on
         or prior to a Senior Termination Date, the Subordinate Percentage of
         the aggregate Principal Balance of the Group III-VII Loans, or (b) if
         such date is after a Senior Termination Date, the aggregate Certificate
         Principal Balance of the Group III-VII Subordinate Certificates, is
         less than 50%, and

    o    cumulative Realized Losses on the Loans in the related Loan Group do
         not exceed:

         o    for the Distribution Date on the seventh anniversary of the first
              Distribution Date, 30% of (i) if such date is on or prior to a
              Senior Termination Date, the Subordinate Percentage of the
              aggregate Principal Balance of the Loans in that Loan Group as of
              the Cut-Off Date or (ii) if such date is after a Senior
              Termination Date, the aggregate Certificate Principal Balance of
              the Group III-VII Subordinate Certificates as of the closing date
              (in either case, the "ORIGINAL SUBORDINATE PRINCIPAL BALANCE"),

         o    for the Distribution Date on the eighth anniversary of the first
              Distribution Date, 35% of the Original Subordinate Principal
              Balance,

         o    for the Distribution Date on the ninth anniversary of the first
              Distribution Date, 40% of the Original Subordinate Principal
              Balance,

         o    for the Distribution Date on the tenth anniversary of the first
              Distribution Date, 45% of the Original Subordinate Principal
              Balance, and

         o    for the Distribution Date on the eleventh anniversary of the first
              Distribution Date, 50% of the Original Subordinate Principal
              Balance.

                                      -68-
<PAGE>

         Notwithstanding the foregoing, if (x) on or before the Distribution
Date in May 2007, the Aggregate Subordinate Percentage is at least 200% of the
Aggregate Subordinate Percentage as of the Closing Date, the delinquency test
set forth above is satisfied and cumulative Realized Losses do not exceed 20% of
the Original Subordinate Principal Balance, the related Senior Prepayment
Percentage will equal the related Senior Percentage for that Distribution Date
plus 50% of the amount equal to 100% minus the related Senior Percentage for
that Distribution Date and (y) after the Distribution Date in May 2007, the
Aggregate Subordinate Percentage is at least 200% of the Aggregate Subordinate
Percentage as of the Closing Date, the delinquency test set forth above is
satisfied and cumulative Realized Losses do not exceed 30% of the Original
Subordinate Principal Balance, the related Senior Prepayment Percentage will
equal the related Senior Percentage.

         SENIOR PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date and any
Loan Group consisting of Group III-VII Loans, the sum of the following for that
Distribution Date:

         (1)      the related Senior Percentage of the related Principal
                  Distribution Amount;

         (2)      the related Senior Prepayment Percentage of the related
                  Principal Prepayment Amount; and

         (3)      the related Senior Liquidation Amount.

         SENIOR TERMINATION DATE: The date on which the aggregate Certificate
Principal Balance of the Senior Certificates of a Loan Group is reduced to zero.

         SERVICER: M&T, Countrywide, Chase, GMAC, National City or Greenpoint,
as applicable, or any successor appointed under the applicable Servicing
Agreement.

         SERVICER CREDIT RISK MANAGEMENT AGREEMENT: As defined in Section 3.1.

         SERVICER REMITTANCE DATE: With respect to each Distribution Date shall
mean (i) with respect to M&T, GMAC and Chase the 18th day of the calendar month
in which such Distribution Date occurs or, if such 18th day is not a Business
Day, the Business Day immediately preceding such 18th day, (ii) with respect to
National City and Countrywide, the 18th day of the calendar month in which such
Distribution Date occurs or, if such 18th day is not a Business Day, the
Business Day immediately following such 18th day and (iii) with respect to
Greenpoint, the 10th day of the calendar month in which such Distribution Date
occurs or, if such 10th day is not a Business Day, the Business Day immediately
preceding such 10th day.

         SERVICING ADVANCES: The customary reasonable and necessary
"out-of-pocket" costs and expenses incurred by the applicable Servicer in
connection with a default, delinquency or other unanticipated event by the
applicable Servicer in the performance of its servicing obligations, 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, in respect of a particular Loan and (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property. No Servicer shall be required to make any Servicing Advance in respect
of a Loan or REO Property that, in the good faith business judgment of such
Servicer, would not be ultimately recoverable from related Insurance Proceeds or
Liquidation Proceeds on such Loan or REO Property as provided herein.

                                      -69-
<PAGE>

         SERVICING AGREEMENT: The M&T Servicing Agreement, the Countrywide
Servicing Agreement, the Chase Servicing Agreement, the GMAC Servicing
Agreement, the National City Servicing Agreement or the Greenpoint Servicing
Agreement.

         SERVICING FEE: With respect to each Loan and for any Distribution Date,
an amount equal to one twelfth of the product of the related Servicing Fee Rate
multiplied by the Scheduled Principal Balance of such Loan as of the Due Date in
the month preceding the month of such Distribution Date. The Servicing Fee is
payable solely from collections of interest on the Loans or as otherwise
provided in the related Servicing Agreement.

         SERVICING FEE RATE: With respect to each Loan serviced by Chase,
Countrywide, GMAC, M&T or National City, 0.25% per annum. With respect to each
Loan serviced by Greenpoint, (x) prior to the first Adjustment Date on such
Loan, 0.25% per annum and (y) thereafter, 0.375% per annum.

         SERVICING OFFICER: Any individual involved in, or responsible for, the
administration and servicing of the Loans whose name and specimen signature
appear on a list of servicing officers furnished to the Trustee, the Depositor
and the Securities Administrator on the Closing Date by each Servicer and the
Master Servicer, as such lists may from time to time be amended.

         SPECIAL HAZARD COVERAGE: As of the Cut-Off Date, approximately
$4,599,564.03. On each Anniversary, the Special Hazard Coverage will be reduced
to an amount equal to the lesser of:

         (1)      the greatest of:

                  (a)      the aggregate Principal Balance of the Group III-VII
                           Loans located in the California zip code containing
                           the largest aggregate Principal Balance of the Group
                           III-VII Loans;

                  (b)      1.00% of the aggregate Principal Balance of the Group
                           III-VII Loans; and

                  (c)      twice the Principal Balance of the largest Group
                           III-VII Loan, calculated as of the Due Date in the
                           immediately preceding month (after giving effect to
                           all scheduled payments whether or not received); and

         (2)      the Special Hazard Coverage as of the Cut-Off Date as reduced
                  by the Special Hazard Losses allocated to the Group III-VII
                  Certificates since the Cut-Off Date.

         SPECIAL HAZARD LOSSES: Losses on a Group III-VII Loan that is a
Liquidated Loan that have been the subject of certain hazards (including
earthquakes, tidal waves and related water damage) not insured against under any
applicable insurance policy. Special Hazard Losses do not include losses
occasioned by war, civil insurrection, certain government actions, errors in
design, faulty workmanship or materials (except under certain circumstances,
nuclear reaction, chemical contamination or waste by the related Mortgagor).

         STARTUP DAY: With respect to each REMIC, the day designated as such
pursuant to Section 10.1(b) hereof.

                                      -70-
<PAGE>

         SUBORDINATE AMOUNT: For any Loan Group consisting of Group III-VII
Loans, and on any date of determination, the excess of the aggregate Principal
Balance of the related Group III-VII Loans over the aggregate Certificate
Principal Balance of the related Group III-VII Senior Certificates.

         SUBORDINATE INTEREST RATE: With respect any Distribution Date and the
Group III-VII Subordinate Certificates, a per annum rate equal to (1) the sum of
the following for each Loan Group consisting of Group III-VII Loans: the product
of (x) the weighted average Net Mortgage Rate of the related Loans and (y) the
Subordinate Amount immediately prior to that Distribution Date, divided by (2)
the aggregate Certificate Principal Balance of the Group III-VII Subordinate
Certificates immediately prior to that Distribution Date. The Subordinate
Interest Rate for each Class of Group III-VII Subordinate Certificates for the
Interest Accrual Period related to the first Distribution Date is expected to be
approximately 4.2851% per annum. For federal income tax purposes, the equivalent
of the foregoing shall be expressed as the weighted average of the
Uncertificated REMIC VI Pass-Through Rate on REMIC VI Regular Interest LTVI-M,
REMIC VI Regular Interest LTVI-B1, REMIC VI Regular Interest LTVI-B2, REMIC VI
Regular Interest LTVI-B3, REMIC VI Regular Interest LTVI-B4 and REMIC VI Regular
Interest LTVI-B5, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC VI Regular Interest.

         SUBORDINATE LIQUIDATION AMOUNT: For any Distribution Date and a Loan
Group consisting of Group III-VII Loans, the excess, if any, of (i) the
aggregate Liquidation Principal for all Loans in that Loan Group which became
Liquidated Loans during the related Prepayment Period minus (ii) the related
Senior Liquidation Amount for such Distribution Date during the related
Prepayment Period.

         SUBORDINATE PERCENTAGE: For any Distribution Date and a Loan Group
consisting of Group III-VII Loans, 100% minus the related Senior Percentage.

         SUBORDINATE PREPAYMENT PERCENTAGE: For any Distribution Date and any
Loan Group consisting of Group III-VII Loans, 100% minus the related Senior
Prepayment Percentage.

         SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date
and any Loan Groups consisting of Group III-VII Loans, the sum of the following
for that Distribution Date:

         (1)      the related Subordinate Percentage of the related Principal
                  Distribution Amount;

         (2)      the related Subordinate Principal Prepayment Amount; and

         (3)      the related Subordinate Liquidation Amount;

PROVIDED, HOWEVER, that the Subordinate Principal Distribution Amount for each
Loan Group consisting of Group III-VII Loans will be reduced by amounts
described in Section 4.5(a)(vii). Any reduction in the Subordinate Principal
Distribution Amount pursuant to the proviso above shall offset the amount
calculated pursuant to clause (1), clause (3) and clause (2), in that order, of
the definition of Subordinate Principal Amount.

                                      -71-
<PAGE>

         SUBORDINATE PRINCIPAL PREPAYMENT AMOUNT: For any Distribution Date and
any Loan Group consisting of Group III-VII Loans, the related Subordinate
Prepayment Percentage of the Principal Prepayment Amount.

         SUBORDINATION LEVEL: On any specified date with respect to any class of
Group III-VII Subordinate Certificates, the percentage obtained by dividing:

         (1)      the sum of the Certificate Principal Balances of all Classes
                  of Group III-VII Certificates which are subordinate in right
                  of payment to such Class as of such date before giving effect
                  to distributions of principal or allocations of Realized
                  Losses on the Group III-VII Loans on such date; by

         (2)      the sum of the Certificate Principal Balances of all Classes
                  of Group III-VII Certificates as of such date before giving
                  effect to distributions of principal or allocations of
                  Realized Losses on the Group III-VII Loans on such date.

         SUBSEQUENT RECOVERIES: With respect to any Distribution Date and a Loan
Group will be amounts received during the related Prepayment Period by the
related Servicer specifically related to a defaulted Loan or disposition of an
REO Property prior to the related Prepayment Period that resulted in a Realized
Loss, after the liquidation or disposition of such defaulted Loan.

         SUBSTITUTE LOAN: A mortgage loan substituted for a Deleted Loan
pursuant to the terms of this Agreement which must, on the date of such
substitution, (i) have an outstanding principal balance, after application of
all scheduled payments of principal and interest due during or prior to the
month of substitution, not in excess of the Scheduled Principal Balance of the
Deleted Loan as of the Due Date in the calendar month during which the
substitution occurs, (ii) have a Mortgage Interest Rate not less than (and not
more than one percentage point in excess of) the Mortgage Interest Rate of the
Deleted Loan, (iii) if the mortgage loan is an Adjustable Rate Loan, have a
Maximum Mortgage Interest Rate not less than the Maximum Mortgage Interest Rate
on the Deleted Loan, (iv) if the mortgage loan is an Adjustable Rate Loan, have
a Minimum Mortgage Interest Rate not less than the Minimum Mortgage Interest
Rate of the Deleted Loan, (v) if the mortgage loan is an Adjustable Rate Loan,
have a Gross Margin equal to the Gross Margin of the Deleted Loan, (vi) if the
mortgage loan is an Adjustable Rate Loan, have a next Adjustment Date not more
than two months later than the next Adjustment Date on the Deleted Loan, (vii)
have a remaining term to maturity not greater than (and not more than one year
less than) that of the Deleted Loan, (viii) have the same Due Date as the Due
Date on the Deleted Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted Loan
as of such date, (x) have a risk grading at least equal to the risk grading
assigned on the Deleted Loan, (xi) is a "qualified mortgage" as defined in the
REMIC Provisions and (xii) conform to each representation and warranty set forth
in Section 6 of the Mortgage Loan Purchase Agreement applicable to the Deleted
Loan. In the event that one or more mortgage loans are substituted for one or
more Deleted Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates, the terms described in clause (vii)
hereof shall be determined on the basis of weighted average remaining term to
maturity, the Loan-to-Value Ratios described in clause (ix) hereof shall be
satisfied as to each such mortgage loan, the risk gradings described

                                      -72-
<PAGE>

in clause (x) hereof shall be satisfied as to each such mortgage loan and,
except to the extent otherwise provided in this sentence, the representations
and warranties described in clause (xii) hereof must be satisfied as to each
Substitute Loan or in the aggregate, as the case may be. In the event that the
Deleted Loan is a Discount Loan, the Substitute Loan(s) shall be deemed to be a
Discount Loan(s) regardless of the Net Mortgage Rate thereof.

         SWISS RE: Swiss Re Financial Products Corporation, or any successor
thereto.

         TAX MATTERS PERSON: The Holder of the Class I/II-R Certificates issued
hereunder or any Permitted Transferee of such Class I/II-R Certificateholder
shall be the initial "tax matters person" for REMIC I, REMIC II, REMIC III and
REMIC IV within the meaning of Section 6231(a)(7) of the Code. The Holder of the
Class A-R Certificates issued hereunder or any Permitted Transferee of such
Class A-R Certificateholder shall be the initial "tax matters person" for REMIC
V, REMIC VI and REMIC VII within the meaning of Section 6231(a)(7) of the Code.
For tax years commencing after any transfer of the Class I/II-R Certificate or
Class A-R Certificate, the holder of the greatest Percentage Interest in such
Residual Certificate at year end shall be designated as the Tax Matters Person
with respect to that year. If the Tax Matters Person becomes a Disqualified
Organization, the last preceding Holder of such Authorized Denomination of the
Class I/II-R Certificate or Class A-R Certificate that is not a Disqualified
Organization shall be Tax Matters Person pursuant to Section 5.3(e). If any
Person is appointed as tax matters person by the Internal Revenue Service
pursuant to the Code, such Person shall be Tax Matters Person.

         TERMINATION PRICE:  As defined in Section 9.1.

         TERMINATOR:  As defined in Section 9.1.

         TRANSFER: Any direct or indirect transfer, sale, pledge or other
disposition of, or directly or indirectly transferring, selling or pledging, any
Ownership Interest in a Class CE Certificate, Class P Certificate or Residual
Certificate.

         TRANSFER PAYMENT: With respect to any Distribution Date and an
Undercollateralized Group, the excess, if any, of the Certificate Principal
Balance of the Group III-VII Senior Certificates related to such
Undercollateralized Group immediately prior to such Distribution Date over the
aggregate Principal Balance of the Loans in such Loan Group at the end of the
Prepayment Period related to the immediately preceding Distribution Date.

         TRANSFER PAYMENT RECEIVED: The Transfer Payment received by the
Undercollateralized Group.

         TRANSFER PAYMENT MADE: The Transfer Payment made by the
Overcollateralized Group.

         TRANSFEREE: Any Person who is acquiring by Transfer any Ownership
Interest in a Class CE Certificate, Class P Certificate or Residual Certificate.

         TRUST FUND: Collectively, all of the assets of REMIC I, REMIC II, REMIC
III, REMIC IV, REMIC V, REMIC VI and REMIC VII, and the Reserve Funds and any
amounts on deposit therein and any proceeds thereof, the Prepayment Charges and
the Cap Contracts.

                                      -73-
<PAGE>

         TRUSTEE: HSBC Bank USA, a New York banking corporation, or its
successor in interest, or any successor trustee appointed as herein provided.

         UNCERTIFICATED ACCRUED INTEREST: With respect to each Uncertificated
REMIC Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass-Through Rate on the Uncertificated
Principal Balance or Uncertificated Notional Amount, as applicable, of such
REMIC Regular Interest. In each case, Uncertificated Accrued Interest will be
reduced by any Prepayment Interest Shortfalls, Curtailment Shortfalls and
shortfalls resulting from application of the Relief Act (allocated to such REMIC
Regular Interests as set forth in Sections 1.2 and 4.9).

         UNCERTIFICATED NOTIONAL AMOUNT: With respect to REMIC III Regular
Interest LTIII-IO-A and (i) each Distribution Date from and including the 1st
Distribution to and including the 6th Distribution Date, the aggregate
Uncertificated Principal Balances of REMIC I Regular Interest LTI-IO-1 through
REMIC I Regular Interest LTI-IO-8, (ii) each Distribution Date from and
including the 7th Distribution to and including the 10th Distribution Date, the
aggregate Uncertificated Principal Balances of REMIC I Regular Interest LTI-IO-2
through REMIC I Regular Interest LTI-IO-8, (iii) each Distribution Date from and
including the 11th Distribution Date to and including the 13th Distribution
Date, the aggregate Uncertificated Principal Balances of REMIC I Regular
Interest LTI-IO-3 and REMIC I Regular Interest LTI-IO-8, (iv) each Distribution
Date from and including the 14th Distribution Date to and including the 15th
Distribution Date, the aggregate Uncertificated Principal Balances of REMIC I
Regular Interest LTI-IO-4 through REMIC I Regular Interest LTI-IO-8, (v) each
Distribution Date from and including the 16th Distribution to and including the
19th Distribution Date, the aggregate Uncertificated Principal Balances of REMIC
I Regular Interest LTI-IO-5 through REMIC I Regular Interest LTI-IO-8, (vi) each
Distribution Date from and including the 20th Distribution to and including the
21st Distribution Date, the aggregate Uncertificated Principal Balances of REMIC
I Regular Interest LTI-IO-6 through REMIC I Regular Interest LTI-IO-8, (vii)
each Distribution Date from and including the 22nd Distribution to and including
the 23rd Distribution Date, the aggregate Uncertificated Principal Balances of
REMIC I Regular Interest LTI-IO-7 and REMIC I Regular Interest LTI-IO-8, and
(viii) the 24th Distribution Date, the aggregate Uncertificated Principal
Balance of REMIC I Regular Interest LTI-IO-8, and (ix) each Distribution Date
thereafter, $0.

         UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest (other than REMIC III Regular Interest LTIII-IO-A and REMIC III Regular
Interest LTIII-IO-B) the principal amount of such REMIC Regular Interest
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Principal Balance of each REMIC Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC Regular Interest shall be reduced by all
distributions of principal made on such REMIC Regular Interest on such
Distribution Date pursuant to Section 4.11 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Sections 4.2, 4.4 and 4.6. The Uncertificated Principal
Balance of each REMIC Regular Interest shall never be less than zero. REMIC III
Regular Interest LTIII-IO-A and REMIC III Regular Interest LTIII-IO-B will not
have Uncertificated Principal Balances.

                                      -74-
<PAGE>

         UNCERTIFICATED REMIC I PASS-THROUGH RATE: A per annum rate equal to the
average of the Net Mortgage Rates of the Group I Loans as of the first day of
the related Due Period, weighted on the basis of the Stated Principal Balances
as of the first day of the related Due Period.

         UNCERTIFICATED REMIC II PASS-THROUGH RATE: A per annum rate equal to
the average of the Net Mortgage Rates of the Group II Loans as of the first day
of the related Due Period, weighted on the basis of the Stated Principal
Balances as of the first day of the related Due Period.

         UNCERTIFICATED REMIC III PASS-THROUGH RATE: With respect to REMIC III
Regular Interest LTIII-1AA, REMIC III Regular Interest LTIII-1A1, REMIC III
Regular Interest LTIII-1A2, REMIC III Regular Interest LTIII-1A3, REMIC III
Regular Interest LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC III
Regular Interest LTIII-1A6, REMIC III Regular Interest LTIII-1M1, REMIC III
Regular Interest LTIII-1M2, REMIC III Regular Interest LTIII-1M3 and REMIC III
Regular Interest LTIII-1ZZ, a per annum rate (but not less than zero) equal to
the weighted average of: (x) with respect to REMIC I Regular Interest LTI-1 and
REMIC I Regular Interest LTI-P, the Uncertificated REMIC I Pass-Through Rate for
such REMIC I Regular Interest for each such Distribution Date, and (y) with
respect to REMIC I Regular Interest LTI-IO-1 through REMIC I Regular Interest
LTI-IO-8 for each Distribution Date listed below, the weighted average of the
rates listed below for each such REMIC I Regular Interest listed below, weighted
on the basis of the Uncertificated Principal Balance of each such REMIC I
Regular Interest:

<TABLE>
<CAPTION>
DISTRIBUTION
   DATE          REMIC I REGULAR INTERESTS                              RATE
------------     -------------------------                              ----
<S>              <C>                              <C>
     1           LTI-IO-1 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
     2           LTI-IO-1 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
     3           LTI-IO-1 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
     4           LTI-IO-1 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
     5           LTI-IO-1 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
     6           LTI-IO-1 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
     7           LTI-IO-2 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
                 LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
     8           LTI-IO-2 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
                 LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
     9           LTI-IO-2 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
                 LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
    10           LTI-IO-2 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
                 LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
    11           LTI-IO-3 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
                 LTI-IO-1 and LTI-IO-2            Uncertificated REMIC I Pass-Through Rate
    12           LTI-IO-3 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
                 LTI-IO-1 and LTI-IO-2            Uncertificated REMIC I Pass-Through Rate
    13           LTI-IO-3 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 and LTI-IO-2            Uncertificated REMIC I Pass-Through Rate
    14           LTI-IO-4 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-3        Uncertificated REMIC I Pass-Through Rate
    15           LTI-IO-4 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-3        Uncertificated REMIC I Pass-Through Rate
    16           LTI-IO-5 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-4        Uncertificated REMIC I Pass-Through Rate
    17           LTI-IO-25 through LTI-IO-8       (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-4        Uncertificated REMIC I Pass-Through Rate
    18           LTI-IO-5 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-4        Uncertificated REMIC I Pass-Through Rate
    19           LTI-IO-6 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-5        Uncertificated REMIC I Pass-Through Rate
    20           LTI-IO-6 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-5        Uncertificated REMIC I Pass-Through Rate

                                      -75-
<PAGE>

    21           LTI-IO-6 through LTI-IO-8        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-5        Uncertificated REMIC I Pass-Through Rate
    22           LTI-IO-7 and LTI-IO-8            (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-6        Uncertificated REMIC I Pass-Through Rate
    23           LTI-IO-7 and LTI-IO-8            (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-6        Uncertificated REMIC I Pass-Through Rate
    24           LTI-IO-8                         (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
                 LTI-IO-1 through LTI-IO-7        Uncertificated REMIC I Pass-Through Rate
 25 and
thereafter       LTI-IO-1 through LTI-IO-8        Uncertificated REMIC I Pass-Through Rate
</TABLE>

With respect to REMIC III Regular Interest LTIII-IO-A, (i) for the first twelve
distribution dates, 1.00% and (ii) thereafter, 0.00%. With respect to REMIC III
Regular Interest LTIII-IO-B, (i) for the first twenty-four distribution dates,
3.50% and (ii) thereafter, 0.00%.

With respect to REMIC III Regular Interest LTIII-2AA, REMIC III Regular Interest
LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC III Regular Interest
LTIII-2MR1, REMIC III Regular Interest LTIII-2MR2, REMIC III Regular Interest
LTIII-2MR3, REMIC III Regular Interest LTIII-2ZZ, REMIC III Regular Interest
LTIII-2P, REMIC III Regular Interest LTIII-2SUB1, REMIC III Regular Interest
LTIII-2SUB2 and REMIC III Regular Interest LTIII-2XX, the weighted average of
the Uncertificated REMIC III Pass-Through Rates on each REMIC III Regular
Interest, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC III Regular Interest.

With respect to REMIC III Regular Interest LTIII-2GRP1, the weighted average of
the Uncertificated REMIC III Pass-Through Rate on REMIC II Regular Interest
LTII-1, weighted on the basis of the Uncertificated Principal Balance of such
REMIC III Regular Interest.

With respect to REMIC III Regular Interest LTIII-2GRP2, the weighted average of
the Uncertificated REMIC III Pass-Through Rate on REMIC III Regular Interest
LTII-2, weighted on the basis of the Uncertificated Principal Balance of such
REMIC III Regular Interest.

         UNCERTIFICATED REMIC V PASS-THROUGH RATE: With respect to REMIC V
Regular Interest LTV-IIISUB, REMIC V Regular Interest LTV-IVSUB, REMIC V Regular
Interest LTV-VSUB, REMIC V Regular Interest LTV-VISUB, REMIC V Regular Interest
LTV-VII-1SUB, REMIC V Regular Interest LTV-VII-2SUB and REMIC V Regular Interest
LTV-XX, a per annum rate equal to the weighted average of the Net Mortgage Rates
of the Group III-VII Loans as of the first day of the related Due Period,
weighted on the basis of the Stated Principal Balances thereof as of the first
day of the related Due Period. With respect to REMIC V Regular Interest
LTV-IIIA, REMIC V Regular Interest LTV-IVA, REMIC V Regular Interest VA, REMIC V
Regular Interest LTV-VIA, REMIC V Regular Interest LTV-VIIAR1 and REMIC V
Regular Interest LTV-VII-AR2, a per annum rate equal to the weighted average of
the Net Mortgage Rates of the Group III Loans, Group IV Loans, Group V Loans,
Group VI Loans, Group VII-1 Loans and Group VII-2 Loans, respectively, as of the
first day of the related Due Period, weighted on the basis of the Stated
Principal Balances thereof as of the first day of the related Due Period. With
respect to REMIC V Regular Interest LTV-R, a per annum rate equal to the
weighted average of the Net Mortgage Rates of the Group III Loans as of the
first day of the related Due Period, weighted on the basis of the Stated
Principal Balances as of the first day of the related Due Period.

                                      -76-
<PAGE>

         UNCERTIFICATED REMIC VI PASS-THROUGH RATE: With respect to REMIC VI
Regular Interest LTVI-IIIA and REMIC VI Regular Interest LTVI-R, the weighted
average of the Uncertificated REMIC V Pass-Through Rate on REMIC V Regular
Interest LTV-IIIGRP, weighted on the basis of the Uncertificated Principal
Balance of such REMIC V Regular Interest. With respect to REMIC VI Regular
Interest LTVI-IVA, the weighted average of the Uncertificated REMIC V
Pass-Through Rate on REMIC V Regular Interest LTV-IVGRP, weighted on the basis
of the Uncertificated Principal Balance of such REMIC V Regular Interest. With
respect to REMIC VI Regular Interest LTVI-VA, the weighted average of the
Uncertificated REMIC V Pass-Through Rate on REMIC V Regular Interest LTV-VGRP,
weighted on the basis of the Uncertificated Principal Balance of such REMIC V
Regular Interest. With respect to REMIC VI Regular Interest LTVI-VIA, the
weighted average of the Uncertificated REMIC V Pass-Through Rate on REMIC V
Regular Interest LTV-VIGRP, weighted on the basis of the Uncertificated
Principal Balance of such REMIC V Regular Interest. With respect to REMIC VI
Regular Interest LTVI-VIIAR1, the weighted average of the Uncertificated REMIC V
Pass-Through Rate on REMIC V Regular Interest LTV-VII-1GRP, weighted on the
basis of the Uncertificated Principal Balance of such REMIC V Regular Interest.
With respect to REMIC VI Regular Interest LTVI-VIIAR2, the weighted average of
the Uncertificated REMIC V Pass-Through Rate on REMIC V Regular Interest
LTV-VII-2GRP, weighted on the basis of the Uncertificated Principal Balance of
such REMIC V Regular Interest. With respect to REMIC VI Regular Interest LTVI-M,
REMIC VI Regular Interest LTVI-B1, REMIC VI Regular Interest LTVI-B2, REMIC VI
Regular Interest LTVI-B3, REMIC VI Regular Interest LTVI-B4 and REMIC VI Regular
Interest LTVI-B5, the weighted average of the Uncertificated REMIC V
Pass-Through Rate on REMIC V Regular Interest LTV-IIISUB, REMIC V Regular
Interest LTV-IVSUB, REMIC V Regular Interest LTV-VSUB, REMIC V Regular Interest
LTV-VISUB, REMIC V Regular Interest LTV-VII-1SUB and REMIC V Regular Interest
LTV-VII-2SUB, in each case subject to a cap and a floor equal to the weighted
average of the Net Mortgage Rates on the Loans in the related Loan Group,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
V Regular Interest.

         UNCOLLECTED INTEREST: With respect to any Distribution Date, the sum of
(i) the aggregate Prepayment Interest Shortfalls with respect to the Loans for
such Distribution Date and (ii) the aggregate Curtailment Shortfalls with
respect to the Loans for such Distribution Date.

         UNCOMPENSATED INTEREST SHORTFALL: For any Distribution Date, the
excess, if any, of (i) the sum of (a) the related Uncollected Interest for such
Distribution Date, and (b) any shortfall in interest collections for the Loans
in the calendar month immediately preceding such Distribution Date resulting
from a Relief Act Interest Shortfall over (ii) the aggregate Compensating
Interest paid by the Servicers and the Master Servicer with respect to the Loans
for such Distribution Date, which excess shall be allocated to each Class of
Certificates, pro rata, according to the amount of interest accrued thereon in
reduction thereof.

         UNDERCOLLATERALIZED GROUP: With respect to any Distribution Date, a
Loan Group consisting of Group III-VII Loans for which the aggregate Certificate
Principal Balance of the related Group III-VII Senior Certificates immediately
prior to such Distribution Date is greater than the aggregate Principal Balance
of the Loans in such Loan Group at the end of the Prepayment Period related to
the immediately preceding Distribution Date.

         UNDERWRITER: Deutsche Bank Securities Inc.

                                      -77-
<PAGE>

         UNINSURED CAUSE: Any cause of damage to a Mortgaged Property such that
the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.9.

         U.S. PERSON: A citizen or resident of the United States, a corporation
or partnership (including an entity treated as a corporation or partnership for
United States federal income tax purposes) created or organized in, or under the
laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, 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 such U.S. Persons have the authority to control all substantial decisions
of the trust. To the extent prescribed in regulations by the Secretary of the
Treasury, which have not yet been issued, a trust which was in existence on
August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part 1 of subchapter J of chapter 1 of the Code), and which was
treated as a U.S. Person on August 20, 1996 may elect to continue to be treated
as a U.S. Person notwithstanding the previous sentence.

         WELLS FARGO: Wells Fargo Bank, N.A., or any successor thereto.

         Section 1.2 ALLOCATION OF CERTAIN INTEREST SHORTFALL.

         For purposes of calculating the Interest Distribution Amount for the
Group I Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls and Curtailment Shortfalls with respect to the
Group I Loans, to the extent not covered by payment by the related Servicers
pursuant to the related Servicing Agreements or the Master Servicer pursuant to
Section 3.20, shall first reduce the related Net Monthly Excess Cashflow for
such Distribution Date, second, reduce the Interest Distribution Amount payable
to the Class I-CE Certificates, third, reduce the Interest Distribution Amount
payable to the Class I-M-3 Certificates, fourth, reduce the Interest
Distribution Amount payable to the Class I-M-2 Certificates, fifth, reduce the
Interest Distribution Amount payable to the Class I-M-1 Certificates and sixth,
reduce the Interest Distribution Amount payable to the Group I Senior
Certificates (on a pro rata basis based on their respective Senior Interest
Distribution Amounts before such reduction), in that order and (2) any Relief
Act Interest Shortfalls on the Group I Loans shall be allocated to the Group I
Certificates on a pro rata basis based on their respective Interest Distribution
Amounts before such reduction.

         For purposes of calculating the Interest Distribution Amount for the
Group II Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls and Curtailment Shortfalls with respect to the
Group II Loans, to the extent not covered by payment by the related Servicers
pursuant to the related Servicing Agreements or the Master Servicer pursuant to
Section 3.20, shall first reduce the related Net Monthly Excess Cashflow for
such Distribution Date, second, reduce the Interest Distribution Amount payable
to the Class II-CE Certificates, third, reduce the Interest Distribution Amount
payable to the Class II-MR-3 Certificates, fourth, reduce the Interest
Distribution Amount payable to the Class II-MR-2 Certificates, fifth, reduce the
Interest Distribution Amount payable to the Class II-MR-1 Certificates and
sixth, with respect to Prepayment Interest Shortfalls and Curtailment Shortfalls
on the Group II-1 Loans, reduce the Interest Distribution Amount payable to the
Class II-AR-1 Certificates, and with respect to Prepayment Interest Shortfalls
and Curtailment Shortfalls on the

                                      -78-
<PAGE>

Group II-2 Loans, reduce the Interest Distribution Amount payable to the Class
II-AR-2 Certificates, and (2) any Relief Act Interest Shortfalls on the Group
II-1 Loans shall be allocated to the Class II-AR-1 Certificates and the Group II
Mezzanine Certificates on a pro rata basis based on their respective Interest
Distribution Amounts before such reduction, and any Relief Act Interest
Shortfalls on the Group II-2 Loans shall be allocated to the Group II-AR-2
Certificates and the Group II Mezzanine Certificates on a pro rata basis based
on their respective Interest Distribution Amounts before such reduction.

         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 and Curtailment
Shortfalls with respect to the Group I Loans, to the extent not covered by
payment by the related Servicers pursuant to the related Servicing Agreements or
the Master Servicer pursuant to Section 3.20, shall be allocated first, to REMIC
I Regular Interest LTI-1 and REMIC I Regular Interest LTI-P, to the extent of
one month's interest at the then applicable respective Uncertificated REMIC I
Pass-Through Rate on the Uncertificated Principal Balance of each such REMIC I
Regular Interest; and then, to REMIC I Regular Interest LTI-IO-1, REMIC I
Regular Interest LTI-IO-2, REMIC I Regular Interest LTI-IO-3, REMIC I Regular
Interest LTI-IO-4, REMIC I Regular Interest LTI-IO-5, REMIC I Regular Interest
LTI-IO-6, REMIC I Regular Interest LTI-IO-7 and REMIC I Regular Interest
LTI-IO-8, in each case to the extent of one month's interest at the then
applicable respective Uncertificated REMIC I Pass-Through Rate on the respective
Uncertificated Notional Amount of each such REMIC I Regular Interest.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC II Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls and Curtailment
Shortfalls with respect to the Group II Loans, to the extent not covered by
payment by the related Servicers pursuant to the related Servicing Agreements or
the Master Servicer pursuant to Section 3.20, shall be allocated to REMIC II
Regular Interest LTII-1, REMIC II Regular Interest LTII-2 and REMIC II Regular
Interest LTII-P, to the extent of one month's interest at the then applicable
respective Uncertificated REMIC II Pass-Through Rate on the Uncertificated
Principal Balance of each such REMIC II Regular Interest.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC III Group I Regular Interests for any Distribution Date,
the aggregate amount of any Prepayment Interest Shortfalls and Curtailment
Shortfalls with respect to the Group I Loans, to the extent not covered by
payment by the related Servicers pursuant to the related Servicing Agreements or
the Master Servicer pursuant to Section 3.20, shall be allocated first, to
Uncertificated Accrued Interest payable to REMIC III Regular Interest LTIII-1-AA
and REMIC III Regular Interest LTIII-1 ZZ up to an aggregate amount equal to the
REMIC III Group I Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter among REMIC III Regular Interest LTIII-1A1, REMIC III Regular
Interest LTIII-1A2, REMIC III Regular Interest LTIII-1A3, REMIC III Regular
Interest LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC III Regular
Interest LTIII-1A6, REMIC III Regular Interest LTIII-1M1, REMIC III Regular
Interest LTIII-1M2, REMIC III Regular Interest LTIII-1M3 and REMIC III Regular
Interest LTIII-1ZZ, pro rata based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC III Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC III
Regular Interest.

                                      -79-
<PAGE>

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

                  (A) The REMIC III Group II Marker Allocation Percentage of the
aggregate amount of any Prepayment Interest Shortfalls and Curtailment
Shortfalls with respect to the Group II Loans, to the extent not covered by
payment by the related Servicers pursuant to the related Servicing Agreements or
the Master Servicer pursuant to Section 3.20, shall be allocated first, to
Uncertificated Accrued Interest payable to REMIC III Regular Interest LTIII-2AA
and REMIC III Regular Interest LTIII-2ZZ up to an aggregate amount equal to the
REMIC III Group II Interest Loss Allocation Amount, 98% and 2%, respectively,
and thereafter among, REMIC III Regular Interest LTIII-2AR1, REMIC III Regular
Interest LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1, REMIC III Regular
Interest LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3, REMIC III Regular
Interest LTIII-2ZZ, pro rata based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC III Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC III
Regular Interest; and

                  (B) The REMIC III Sub WAC Allocation Percentage of the
aggregate amount of any Prepayment Interest Shortfalls and Curtailment
Shortfalls with respect to the Group II Loans, to the extent not covered by
payment by the related Servicers pursuant to the related Servicing Agreements or
the Master Servicer pursuant to Section 3.20, shall be allocated to
Uncertificated Accrued Interest payable to REMIC III Regular Interest
LTIII-2SUB1, REMIC III Regular Interest LTIII-2GRP1, REMIC III Regular Interest
LTIII-2SUB2, REMIC III Regular Interest LTIII-2GRP2 and REMIC III Regular
Interest LTIII-2XX, pro rata based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC III Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC III
Regular Interest.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC V Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls and Curtailment
Shortfalls incurred in respect of the Group III-VII Loans to the extent not
covered by payment by the related Servicer pursuant to the related Servicing
Agreements or the Master Servicer pursuant to Section 3.20, shall be allocated
to the REMIC V Regular Interests, pro rata, to the extent of one month's
interest at the then applicable respective Uncertificated REMIC V Pass-Through
Rate on the Uncertificated Principal Balance of each such REMIC V Regular
Interest.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC VI Regular Interests for any Distribution Date, the
aggregate amount of any Unpaid Interest Shortfalls incurred in respect of the
Group III-VII Loans for any Distribution Date shall be allocated to the REMIC VI
Regular Interests, pro rata, to the extent of one month's interest at the then
applicable respective Uncertificated REMIC VI Pass-Through Rate on the
Uncertificated Principal Balance of each such REMIC VI Regular Interest.

                                      -80-
<PAGE>

                                   ARTICLE II

                            CONVEYANCE OF TRUST FUND;
                        ORIGINAL ISSUANCE OF CERTIFICATES

         Section 2.1 CONVEYANCE OF TRUST FUND. The Depositor, concurrently with
the execution and delivery hereof, does hereby transfer, assign, set over and
otherwise convey to the Trustee, on behalf of the Trust, without recourse, for
the benefit of the Certificateholders all the right, title and interest of the
Depositor, including any security interest therein for the benefit of the
Depositor, in and to the Loans identified on the Loan Schedule, the rights of
the Depositor under the Mortgage Loan Purchase Agreement and the Assignment
Agreements (including, without limitation the right to enforce the obligations
of the other parties thereto thereunder), and all other assets included or to be
included in REMIC I, REMIC II and REMIC V. Such assignment includes all interest
and principal received by the Depositor or the applicable Servicer on or with
respect to the Loans (other than payments of principal and interest due on such
Loans on or before the Cut-Off Date). The Depositor herewith delivers to the
Trustee executed copies of the Mortgage Loan Purchase Agreement, the Servicing
Agreements and the Assignment Agreements.

                  In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Custodian pursuant to the
Custodial Agreement the documents with respect to each Loan as described under
Section 2 of the Custodial Agreement (the "Loan Documents"). In connection with
such delivery and as further described in the Custodial Agreement, the Custodian
will be required to review such Loan Documents and deliver to the Trustee, the
Depositor, the Master Servicer and the Seller certifications (in the forms
attached to the Custodial Agreement) with respect to such review with exceptions
noted thereon. In addition, the Depositor under the Custodial Agreement will
have to cure certain defects with respect to the Loan Documents for the related
Loans after the delivery thereof by the Depositor to the Custodian as more
particularly set forth therein.

         Section 2.2 ACCEPTANCE BY TRUSTEE.

         The Trustee acknowledges receipt, subject to the provisions of Section
2.1 hereof and Section 2 of the Custodial Agreement, of the Loan Documents and
all other assets included in the definitions of "REMIC I", "REMIC II" and "REMIC
V" under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited
into the Distribution Accounts) and declares that it holds (or the Custodian on
its behalf holds) and will hold such documents and the other documents delivered
to it constituting a Loan Document, and that it holds (or the Custodian on its
behalf holds) or will hold all such assets and such other assets included in the
definitions of "REMIC I", "REMIC II" and "REMIC V" in trust for the exclusive
use and benefit of all present and future Certificateholders.

         Section 2.3 REPURCHASE OR SUBSTITUTION OF LOANS.

                  (a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
a breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Loan that materially and
adversely affects the value of such Loan or the interest therein of the
Certificateholders, the Trustee shall promptly notify the Seller of such defect,
missing

                                      -81-
<PAGE>

document or breach and request that the Seller deliver such missing document,
cure such defect or breach within 60 days from the date the Seller was notified
of such missing document, defect or breach, and if the Seller does not deliver
such missing document or cure such defect or breach in all material respects
during such period, the Trustee shall enforce the obligations of the Seller
under the Mortgage Loan Purchase Agreement to repurchase such Loan from REMIC I,
REMIC II or REMIC V, as applicable, at the Purchase Price within 90 days after
the date on which the Seller was notified of such missing document, defect or
breach, if and to the extent that the Seller is obligated to do so under the
Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased Loan
shall be deposited in the related Distribution Account and the Trustee, upon
receipt of written certification from the Securities Administrator of such
deposit and receipt by the Custodian of a properly completed request for release
for such Loan in the form of EXHIBIT 3 to the Custodial Agreement, shall release
or cause the Custodian to release to the Seller the related Mortgage File and
the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as the
Seller shall furnish to it and as shall be necessary to vest in the Seller any
Loan released pursuant hereto, and the Trustee shall not have any further
responsibility with regard to such Mortgage File. In lieu of repurchasing any
such Loan as provided above, if so provided in the Mortgage Loan Purchase
Agreement, the Seller may cause such Loan to be removed from REMIC I, REMIC II
or REMIC V, as applicable, (in which case it shall become a Deleted Loan) and
substitute one or more Substitute Loans in the manner and subject to the
limitations set forth in Section 2.3(b). It is understood and agreed that the
obligation of the Seller to cure or to repurchase (or to substitute for) any
Loan as to which a document is missing, a material defect in a constituent
document exists or as to which such a breach has occurred and is continuing
shall constitute the sole remedy respecting such omission, defect or breach
available to the Trustee and the Certificateholders.

                  In addition, should the Master Servicer become aware of or in
the event of its receipt of notice by a Responsible Officer of the Master
Servicer of the breach of the representation or covenant of the Seller set forth
in Section 5(x) of the Mortgage Loan Purchase Agreement which materially and
adversely affects the interests of a Holder of a Class P Certificate in any
Prepayment Charge, the Master Servicer shall promptly notify the Seller and the
Trustee of such breach. The Trustee shall enforce the obligations of the Seller
under the Mortgage Loan Purchase Agreement to remedy such breach to the extent
and in the manner set forth in the Mortgage Loan Purchase Agreement.

                  (b) Any substitution of Substitute Loans for Deleted Loans
made pursuant to Section 2.3(a) must be effected prior to the date which is two
years after the Startup Day for REMIC I, REMIC II or REMIC V.

                  As to any Deleted Loan for which the Seller, substitutes a
Substitute Loan or Loans, such substitution shall be effected by the Seller
delivering to the Trustee or the Custodian on behalf of the Trustee, for such
Substitute Loan or Loans, the Mortgage Note, the Mortgage, and the Assignment to
the Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2 of the Custodial Agreement,
as applicable, together with an Officers' Certificate providing that each such
Substitute Loan satisfies the definition thereof and specifying the Substitution
Shortfall Amount (as described below), if any, in connection with such
substitution. The Custodian on behalf of the Trustee shall acknowledge receipt
of such Substitute Loan or Loans and, within ten Business Days thereafter,
review such

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documents and deliver to the Depositor, the Trustee and the Master Servicer,
with respect to such Substitute Loan or Loans, an initial certification pursuant
to the Custodial Agreement, with any applicable exceptions noted thereon. Within
one year of the date of substitution, the Custodian on behalf of the Trustee
shall deliver to the Depositor, the Trustee and the Master Servicer a final
certification pursuant to the Custodial Agreement with respect to such
Substitute Loan or Loans, with any applicable exceptions noted thereon. Monthly
Payments due with respect to Substitute Loans in the month of substitution are
not part of REMIC I, REMIC II or REMIC V and shall be retained by the Seller.
For the month of substitution, distributions to Certificateholders shall reflect
the Monthly Payment due on such Deleted Loan on or before the Due Date in the
month of substitution, and the Seller shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Loan. The Depositor
shall give or cause to be given written notice to the Certificateholders that
such substitution has taken place, shall amend the Loan Schedule to reflect the
removal of such Deleted Loan from the terms of this Agreement and the
substitution of the Substitute Loan or Loans and shall deliver a copy of such
amended Loan Schedule to the Trustee and the Master Servicer. Upon such
substitution, such Substitute Loan or Loans shall constitute part of the Trust
Fund and shall be subject in all respects to the terms of this Agreement and the
Mortgage Loan Purchase Agreement including all applicable representations and
warranties thereof included herein or in the Mortgage Loan Purchase Agreement.

                  For any month in which the Seller substitutes one or more
Substitute Loans for one or more Deleted Loans, the Master Servicer shall
determine the amount (the "Substitution Shortfall Amount"), if any, by which the
aggregate Purchase Price of all such Deleted Loans exceeds the aggregate of, as
to each such Substitute Loan, the Scheduled Principal Balance thereof as of the
Due Date in the month of substitution, together with one month's interest on
such Scheduled Principal Balance at the applicable Net Mortgage Rate, plus all
outstanding Advances and Servicing Advances (including Nonrecoverable Advances)
related thereto. On the date of such substitution, the Seller shall deliver or
cause to be delivered to the Securities Administrator for deposit in the related
Distribution Account an amount equal to the Substitution Shortfall Amount, if
any, and the Trustee or the Custodian on behalf of the Trustee, upon receipt of
the related Substitute Loan or Loans and certification by the Securities
Administrator of such deposit and receipt by the Custodian of a properly
completed request for release for such Loan in the form of EXHIBIT 3 to the
Custodial Agreement, shall release to the Seller the related Mortgage File or
Files and the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as the
Seller shall deliver to it and as shall be necessary to vest therein any Deleted
Loan released pursuant hereto.

                  In addition, the Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on any REMIC,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code, or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding.

                  (c) Upon discovery by the Depositor, the Seller, the Master
Servicer or the Trustee that any Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall

                                      -83-
<PAGE>

repurchase or substitute one or more Substitute Loans for the affected Loan
within 90 days of the earlier of discovery or receipt of such notice with
respect to such affected Loan. Such repurchase or substitution shall be made by
(i) the Seller, if the affected Loan's status as a non-qualified mortgage is or
results from a breach of any representation, warranty or covenant made by the
Seller under the Mortgage Loan Purchase Agreement or (ii) the Depositor, if the
affected Loan's status as a non-qualified mortgage does not result from a breach
of representation or warranty. Any such repurchase or substitution shall be made
in the same manner as set forth in Section 2.3(a). The Trustee shall reconvey to
the Seller or the Depositor the Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Loan repurchased for
breach of a representation or warranty.

                  (d) Within 90 days of the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.5 which materially and adversely affects the interests of the
Certificateholders in any Loan or Prepayment Charge, the Master Servicer shall
cure such breach in all material respects.

         Section 2.4 AUTHENTICATION AND DELIVERY OF CERTIFICATES; DESIGNATION OF
CERTIFICATES AS REMIC REGULAR AND RESIDUAL INTERESTS.

                  (a) The Trustee acknowledges the transfer to the extent
provided herein and assignment to it of the Trust Fund and, concurrently with
such transfer and assignment, has caused the Securities Administrator to execute
and authenticate and has delivered to or upon the order of the Depositor, in
exchange for the Trust Fund, Certificates evidencing the entire ownership of the
Trust Fund.

                  (b) This Agreement shall be construed so as to carry out the
intention of the parties that each of REMIC I, REMIC II, REMIC III, REMIC IV,
REMIC V, REMIC VI and REMIC VII be treated as a REMIC at all times prior to the
date on which the Trust Fund is terminated. The "regular interests" (within the
meaning of Section 860G(a)(1) of the Code) in REMIC IV shall consist of the
Group I Certificates and the Group II Certificates (exclusive of any right to
receive payments from a Reserve Fund). The "residual interest" (within the
meaning of Section 860G(a)(2) of the Code) in REMIC IV shall consist of
Component R-4. The "regular interests" (within the meaning of Section 860G(a)(1)
of the Code) of REMIC III shall consist of the REMIC III Regular Interests. The
"residual interest" (within the meaning of Section 860(G)(a)(2) of the Code) of
REMIC III shall consist of Component R-3. The "regular interests" (within the
meaning of Section 860G(a)(1) of the Code) of REMIC II shall consist of the
REMIC II Regular Interests. The "residual interest" (within the meaning of
Section 860(G)(a)(2) of the Code) of REMIC II shall consist of Component R-2.
The "regular interests" (within the meaning of Section 860G(a)(1) of the Code)
of REMIC I shall consist of the REMIC I Regular Interests. The "residual
interest" (within the meaning of Section 860(G)(a)(2) of the Code) of REMIC I
shall consist of Component R-1. The "regular interests" (within the meaning of
Section 860G(a)(1) of the Code) in REMIC VII shall consist of the Group III-VII
Certificates (exclusive of any right to receive payments from a Reserve Fund).
The "residual interest" (within the meaning of Section 860G(a)(2) of the Code)
in REMIC VII shall consist of Component R-7. The "regular interests" (within the
meaning of Section 860G(a)(1) of the Code) of REMIC VI shall consist of the
REMIC VI Regular Interests. The "residual interest" (within the meaning of
Section 860(G)(a)(2) of the Code) of REMIC VI

                                      -84-
<PAGE>

shall consist of Component R-6. The "regular interests" (within the meaning of
Section 860G(a)(1) of the Code) of REMIC V shall consist of the REMIC V Regular
Interests. The "residual interest" (within the meaning of Section 860(G)(a)(2)
of the Code) of REMIC V shall consist of Component R-5.

         Section 2.5 REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER.

         The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee, the Certificateholders and the
Depositor that as of the Closing Date or as of such date specifically provided
herein:

                  (i) The Master Servicer is a national banking association duly
         formed, validly existing and in good standing under the laws of the
         United States of America and is duly authorized and qualified to
         transact any and all business contemplated by this Agreement to be
         conducted by the Master Servicer;

                  (ii) The Master Servicer has the full power and authority to
         conduct its business as presently conducted by it and to execute,
         deliver and perform, and to enter into and consummate, all transactions
         contemplated by this Agreement. The Master Servicer has duly authorized
         the execution, delivery and performance of this Agreement, has duly
         executed and delivered this Agreement, and this Agreement, assuming due
         authorization, execution and delivery by the Depositor and the Trustee,
         constitutes a legal, valid and binding obligation of the Master
         Servicer, enforceable against it in accordance with its terms except as
         the enforceability thereof may be limited by bankruptcy, insolvency,
         reorganization or similar laws affecting the enforcement of creditors'
         rights generally and by general principles of equity;

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer, the consummation by the Master Servicer of any other
         of the transactions herein contemplated, 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 breach of any term
         or provision of charter and by-laws of the Master Servicer or (B)
         conflict with, result in a breach, violation or acceleration of, or
         result in a 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 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 a party to, bound by, or in breach or violation
         of any indenture or other agreement or instrument, or subject to or in
         violation of any statute, order or regulation of any court, regulatory
         body, administrative agency or governmental body having jurisdiction
         over it, which materially and adversely affects or, to the Master
         Servicer's knowledge, would in the future materially and adversely
         affect, (x) the ability of the Master Servicer to perform its
         obligations under this Agreement or (y) the business, operations,
         financial condition, properties or assets of the Master Servicer taken
         as a whole;

                  (iv) The Master Servicer does not believe, nor does it have
         any reason or cause to believe, that it cannot perform each and every
         covenant made by it and contained in this Agreement;

                                      -85-
<PAGE>

                  (v) No litigation is pending 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 perform any of its other obligations hereunder in accordance with
         the terms hereof,

                  (vi) There are no actions or proceedings against, or
         investigations known to it of, the Master Servicer before any court,
         administrative or other tribunal (A) that might prohibit its entering
         into this Agreement, (B) seeking to prevent the consummation of the
         transactions contemplated by this Agreement or (C) that might prohibit
         or materially and adversely affect the performance by the Master
         Servicer of its obligations under, or validity or enforceability of,
         this Agreement; and

                  (vii) 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 by it of
         the transactions contemplated by this Agreement, except for such
         consents, approvals, authorizations or orders, if any, that have been
         obtained prior to the Closing Date.

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.5 shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders.

         Section 2.6 ESTABLISHMENT OF THE TRUST.

         The Depositor does hereby establish, pursuant to the further provisions
of this Agreement and the laws of the State of New York, an express trust to be
known, for convenience, as "Deutsche Mortgage Securities, Inc., Mortgage Loan
Trust, Series 2004-4" and does hereby appoint HSBC Bank USA, as Trustee in
accordance with the provisions of this Agreement.

                                      -86-
<PAGE>

                                  ARTICLE III
               ADMINISTRATION AND SERVICING OF THE LOANS; ACCOUNTS

         Section 3.1 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Loans in accordance with the terms of the applicable Servicing
Agreement and shall have full power and authority to do any and all things which
it may deem necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with Accepted Master Servicing Practices.
Furthermore, the Master Servicer shall oversee and consult with each Servicer as
necessary from time-to-time to carry out the Master Servicer's obligations
hereunder, shall receive, review and evaluate all reports, information and other
data provided to the Master Servicer by each Servicer and shall cause each
Servicer to perform and observe the covenants, obligations and conditions to be
performed or observed by such Servicer under the applicable Servicing Agreement.
The Master Servicer shall independently and separately monitor each Servicer's
servicing activities with respect to each related Loan, reconcile the results of
such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to the Servicers' and Master
Servicer's records, and based on such reconciled and corrected information,
prepare the statements specified in Section 4.8 and any other information and
statements required to be provided by the Master Servicer hereunder. The Master
Servicer shall reconcile the results of its Loan monitoring with the actual
remittances of the Servicers to the related Distribution Account pursuant to the
applicable Servicing Agreements.

         Notwithstanding anything in this Agreement or any Servicing Agreement
to the contrary, the Master Servicer shall not have any duty or obligation to
enforce any Credit Risk Management Agreement that a Servicer is a party to (a
"Servicer Credit Risk Management Agreement") or to supervise, monitor or oversee
the activities of the Credit Risk Manager under any such Servicer Credit Risk
Management Agreement with respect to any action taken or not taken by the
applicable Servicer pursuant to a recommendation of the Credit Risk Manager.

         The Trustee shall furnish the Servicers and the Master Servicer with
any limited powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the Servicers and the Master Servicer to
service or master service and administer the related Loans and REO Property. The
Trustee shall have no responsibility for any action of the Master Servicer or
any Servicer pursuant to any such limited power of attorney and shall be
indemnified by the Master Servicer or such Servicer for any cost, liability or
expense arising from the misuse thereof by the Master Servicer or such Servicer.

         The Trustee, the Custodian and the Securities Administrator shall
provide access to the records and documentation in possession of the Trustee,
the Custodian or the Securities Administrator regarding the related Loans and
REO Property and the servicing thereof to the Certificateholders, the FDIC, and
the supervisory agents and examiners of the FDIC, such access being afforded
only upon reasonable prior written request and during normal business hours at
the office of the Trustee, the Custodian or the Securities Administrator;
provided, however, that, unless otherwise required by law, none of the Trustee,
the Custodian or the Securities Administrator shall be required to provide
access to such records and documentation if the provision thereof would violate
the legal right to privacy of any Mortgagor. The Trustee, the Custodian and the
Securities Administrator shall allow representatives of the above entities to

                                      -87-
<PAGE>

photocopy any of the records and documentation and shall provide equipment for
that purpose at a charge that covers the Trustee's, the Custodian's or the
Securities Administrator's actual costs.

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

         Section 3.2 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall treat such REMIC as a
REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the related Servicer or the Master Servicer to assure
such continuing treatment. In particular, the Trustee shall not (a) sell or
permit the sale of all or any portion of the Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Loans pursuant to this Agreement or the Trustee has received an Opinion of
Counsel stating that such sale will not result in an Adverse REMIC Event as
defined in Section 10.1(f) hereof prepared at the expense of the Trust Fund; and
(b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreements, the Assignment Agreements or Section 2.3 of this Agreement,
as applicable, accept any contribution to any REMIC after the Startup Day
without receipt of an Opinion of Counsel stating that such contribution will not
result in an Adverse REMIC Event as defined in Section 10.1(f) hereof.

         Section 3.3 MONITORING OF SERVICERS.

                  (a) The Master Servicer shall be responsible for monitoring
the compliance by each Servicer with its duties under the related Servicing
Agreement. In the review of each Servicer's activities, the Master Servicer may
rely upon an officer's certificate of any Servicer with regard to such
Servicer's compliance with the terms of its Servicing Agreement. In the event
that the Master Servicer, in its judgment, determines that a Servicer should be
terminated in accordance with its Servicing Agreement, or that a notice should
be sent pursuant to such Servicing Agreement with respect to the occurrence of
an event that, unless cured, would constitute grounds for such termination, the
Master Servicer shall notify the Seller and the Trustee thereof and the Master
Servicer shall issue such notice or take such other action as it deems
appropriate.

                  (b) The Master Servicer, for the benefit of the Trustee and
the Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Loans or to cause the
Trustee to enter in to a new Servicing Agreement with a successor Servicer
selected by the Master Servicer; provided, however, it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without

                                      -88-
<PAGE>

limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense,
provided that the Master Servicer shall not be required to prosecute or defend
any legal action except to the extent that the Master Servicer shall have
received indemnity reasonably acceptable to it for its costs and expenses in
pursuing such action.

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

                  (d) The Master Servicer shall require each Servicer to comply
with the remittance requirements and other obligations set forth in the related
Servicing Agreement.

                  (e) If the Master Servicer acts as Servicer, it shall not
assume liability for the representations and warranties of the Servicer, if any,
that it replaces.

         Section 3.4 FIDELITY BOND. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy that would meet the requirements of Fannie Mae or Freddie Mac, affording
coverage with respect to all directors, officers, employees and other Persons
acting on such Master Servicer's behalf, and covering errors and omissions in
the performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees. Any such errors and omissions policy and fidelity bond may not be
cancelable without thirty (30) days' prior written notice to the Trustee.

         Section 3.5 POWER TO ACT; PROCEDURES. The Master Servicer shall master
service the Loans and shall have full power and authority, subject to the REMIC
Provisions and the provisions of Article X hereof, to do any and all things that
it may deem necessary or desirable in connection with the master servicing and
administration of the Loans, including but not limited to the power and
authority (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, (iii) to collect any Insurance Proceeds
and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Loan, in each case, in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable; provided, however, that the Master Servicer shall not
(and,

                                      -89-
<PAGE>

consistent with its responsibilities under Section 3.3, shall not permit any
Servicer to) knowingly or intentionally take any action, or fail to take (or
fail to cause to be taken) any action reasonably within its control and the
scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, would cause REMIC I,
REMIC II, REMIC III, REMIC IV, REMIC V, REMIC VI or REMIC VII to fail to qualify
as a REMIC or result in the imposition of a tax upon the Trust Fund (including
but not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) unless the Master Servicer, the Securities
Administrator has received an Opinion of Counsel (but not at the expense of the
Master Servicer, the Securities Administrator) to the effect that the
contemplated action will not cause REMIC I, REMIC II, REMIC III, REMIC IV, REMIC
V, REMIC VI or REMIC VII to fail to qualify as a REMIC or result in the
imposition of a tax upon REMIC I, REMIC II, REMIC III, REMIC IV, REMIC V, REMIC
VI or REMIC VII as the case may be. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer or any Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Loans or the
Mortgaged Property, in accordance with the applicable Servicing Agreement and
this Agreement, and the Trustee shall execute and deliver such other documents,
as the Master Servicer or applicable Servicer may request, to enable the Master
Servicer to master service and administer the Loans and carry out its duties
hereunder, in each case in accordance with Accepted Master Servicing Practices
(and the Trustee shall have no liability for the misuse of any such powers of
attorney by the Master Servicer or any Servicer and shall be indemnified by the
Master Servicer or such Servicer for any costs, liabilities or expenses incurred
by the Trustee in connection with such misuse). If the Master Servicer or the
Trustee has been advised that it is likely that the laws of the state in which
action is to be taken prohibit such action if taken in the name of the Trustee
or that the Trustee would be adversely affected under the "doing business" or
tax laws of such state if such action is taken in its name, the Master Servicer
shall join with the Trustee in the appointment of a co-trustee pursuant to
Section 8.10 hereof. In the performance of its duties hereunder, the Master
Servicer shall be an independent contractor and shall not, except in those
instances where it is taking action authorized pursuant to this Agreement to be
taken by it in the name of the Trustee, be deemed to be the agent of the
Trustee.

         Section 3.6 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in the applicable Servicing Agreement and to the extent Loans contain
enforceable due-on-sale clauses, the Master Servicer shall cause the Servicers
to enforce such clauses in accordance with the applicable Servicing Agreement.
If applicable law prohibits the enforcement of a due-on-sale clause or such
clause is otherwise not enforced in accordance with the applicable Servicing
Agreement, and, as a consequence, a Loan is assumed, the original Mortgagor may
be released from liability in accordance with the applicable Servicing
Agreement.

         Section 3.7 RELEASE OF MORTGAGE FILES.

                  (a) Upon becoming aware of the payment in full of any Loan, or
the receipt by any Servicer of a notification that payment in full has been
escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the applicable Servicer will
(or if the Servicer does not, the Master Servicer may), if required under the

                                      -90-
<PAGE>

applicable Servicing Agreement, promptly furnish to the Custodian, on behalf of
the Trustee, two copies of a request for release substantially in the form
attached to the Custodial Agreement, and signed by a Servicing Officer or in a
mutually agreeable electronic format which will, in lieu of a signature on its
face, originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained by
the applicable Servicer pursuant to its Servicing Agreement have been or will be
so deposited) and shall request that the Custodian, on behalf of the Trustee,
deliver to the applicable Servicer the related Mortgage File. Upon receipt of
such certification and request, the Custodian, on behalf of the Trustee, shall
promptly release the related Mortgage File to the applicable Servicer and the
Trustee and Custodian shall have no further responsibility with regard to such
Mortgage File. Upon any such payment in full, each Servicer is authorized to
give, as agent for the Trustee, as the mortgagee under the Mortgage that secured
the Loan, an instrument of satisfaction (or assignment of mortgage without
recourse) regarding the Mortgaged Property subject to the Mortgage, which
instrument of satisfaction or assignment, as the case may be, shall be delivered
to the Person or Persons entitled thereto against receipt therefor of such
payment, it being understood and agreed that no expenses incurred in connection
with such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the related Distribution Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of a Servicer or the Master Servicer, and delivery to the Custodian, on
behalf of the Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form attached to the Custodial Agreement
(or in a mutually agreeable electronic format which will, in lieu of a signature
on its face, originate from a Servicing Officer), release the related Mortgage
File held in its possession or control to the Servicer or the Master Servicer,
as applicable. Such request for release shall obligate the Servicer or the
Master Servicer to return the Mortgage File to the Custodian on behalf of the
Trustee, when the need therefor by the Servicer or the Master Servicer no longer
exists unless the Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
Mortgage File shall be released by the Custodian, on behalf of the Trustee, to
the Servicer or the Master Servicer.

         Section 3.8 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR TRUSTEE.

                  (a) The Master Servicer shall transmit and each Servicer (to
the extent required by the related Servicing Agreement) shall transmit to the
Trustee or Custodian such documents and instruments coming into the possession
of the Master Servicer or such Servicer from time to time as are required by the
terms hereof, or in the case of the Servicers, the applicable Servicing
Agreement, to be delivered to the Trustee or Custodian. Any funds received by
the Master Servicer or by a Servicer in respect of any Loan or which otherwise
are collected by the Master Servicer or by a Servicer as Liquidation Proceeds,
Insurance Proceeds or Subsequent Recoveries in respect of any Loan shall be held
for the benefit of the Trustee and the related Certificateholders subject to the
Master Servicer's right to retain or withdraw from the related Distribution
Account the Master Servicing Compensation and other amounts provided in

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this Agreement, and to the right of each Servicer to retain its Servicing Fee
and other amounts as provided in the applicable Servicing Agreement. The Master
Servicer shall, and (to the extent provided in the applicable Servicing
Agreement) shall cause each Servicer to, provide access to information and
documentation regarding the Loans to the Trustee, its agents and accountants at
any time upon reasonable request and during normal business hours, and to
Certificateholders that are savings and loan associations, banks or insurance
companies, the OTS, the FDIC and the supervisory agents and examiners of such
Office and Corporation or examiners of any other federal or state banking or
insurance regulatory authority if so required by applicable regulations of the
OTS or other regulatory authority, such access to be afforded without charge but
only upon reasonable request in writing and during normal business hours at the
offices of the Master Servicer designated by it. In fulfilling such a request
the Master Servicer shall not be responsible for determining the sufficiency of
such information.

                  (b) All Mortgage Files and funds collected or held by, or
under the control of, the Master Servicer, in respect of any Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the related Certificateholders and shall be and remain the sole
and exclusive property of the Trustee; provided, however, that the Master
Servicer and each Servicer shall be entitled to setoff against, and deduct from,
any such funds any amounts that are properly due and payable to the Master
Servicer or such Servicer under this Agreement or the applicable Servicing
Agreement.

         Section 3.9 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

                  (a) For each Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.

                  (b) Pursuant to Section 3.23, any amounts collected by the
Master Servicer, or by any Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the related Distribution
Account, subject to withdrawal pursuant to Section 3.24. Any cost incurred by
the Master Servicer or any Servicer in maintaining any such insurance if the
Mortgagor defaults in its obligation to do so shall be added to the amount owing
under the Loan where the terms of the Loan so permit; provided, however, that
the addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders and shall be
recoverable by the Master Servicer or such Servicer pursuant to Section 3.24.

         Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee and the related Certificateholders all claims under

                                      -92-
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any insurance policies and take such actions (including the negotiation,
settlement, compromise or enforcement of the insured's claim) as shall be
necessary to realize recovery under such policies. Any proceeds disbursed to the
Master Servicer (or disbursed to a Servicer and remitted to the Master Servicer)
in respect of such policies, bonds or contracts shall be promptly deposited in
the related Distribution Account upon receipt, except that any amounts realized
that are to be applied to the repair or restoration of the related Mortgaged
Property as a condition precedent to the presentation of claims on the related
Loan to the insurer under any applicable insurance policy need not be so
deposited (or remitted).

         Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

                  (a) The Master Servicer shall not take, or permit any Servicer
(to the extent such action is prohibited under the applicable Servicing
Agreement) to take, any action that would result in noncoverage under any
primary mortgage insurance policy or any loss which, but for the actions of such
Master Servicer or Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause each Servicer (to the
extent required under the related Servicing Agreement) to keep in force and
effect (to the extent that the Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Loan in accordance
with the provisions of this Agreement and the related Servicing Agreement, as
applicable. The Master Servicer shall not, and shall not permit any Servicer (to
the extent required under the related Servicing Agreement) to, cancel or refuse
to renew any primary mortgage insurance policy that is in effect at the date of
the initial issuance of the Mortgage Note and is required to be kept in force
hereunder except in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable.

(b) The Master Servicer agrees to cause each Servicer (to the extent required
under the related Servicing Agreement) to present, on behalf of the Trustee and
the related Certificateholders, claims to the insurer under any primary mortgage
insurance policies and, in this regard, to take such reasonable action as shall
be necessary to permit recovery under any primary mortgage insurance policies
respecting defaulted Loans. Pursuant to Section 3.22 and 3.23, any amounts
collected by the Master Servicer or any Servicer under any primary mortgage
insurance policies shall be deposited by the related Servicer in its Protected
Account or by the Master Servicer in the related Distribution Account, subject
to withdrawal pursuant to Sections 3.22 or 3.24, as applicable.

         Section 3.12 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES
AND DOCUMENTS.

                  The Trustee or the applicable Custodian, shall retain
possession and custody of the originals (to the extent available) of any primary
mortgage insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Group I Certificates, Group II Certificates and Group III-VII Certificates
have been distributed in full and the Master Servicer otherwise has fulfilled
its obligations under this Agreement with respect to the Group I Certificates,
Group II Certificates and Group III-VII Certificates, respectively, the Trustee
or the Custodian shall also retain possession and custody of each related
Mortgage File in accordance with and subject to the terms and conditions of this
Agreement and the Custodial Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee or the Custodian, upon the
execution or receipt thereof the originals

                                      -93-
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of any primary mortgage insurance policies, any certificates of renewal, and
such other documents or instruments that constitute Loan Documents that come
into the possession of the Master Servicer from time to time.

         Section 3.13 REALIZATION UPON DEFAULTED LOANS. The Master Servicer
shall cause each Servicer (to the extent required under the related Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments, all in accordance with the applicable
Servicing Agreement.

         Section 3.14 COMPENSATION FOR THE MASTER SERVICER.

                  (a) All income and gain realized from any investment of funds
in each Distribution Account shall be for the benefit of the Master Servicer as
compensation. Servicing compensation in the form of assumption fees, if any,
late payment charges, as collected, if any, or otherwise (but not including any
Prepayment Charges other than with respect to the Loans serviced by Countrywide)
shall be retained by the applicable Servicer and shall not be deposited in the
Protected Account. The Master Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder and shall not be
entitled to reimbursement therefor except as provided in this Agreement.

                  (b) The amount of the aggregate compensation payable as set
forth in Section 3.14(a) (the "Master Servicing Compensation") to the Master
Servicer in respect of any Distribution Date shall be reduced in accordance with
Section 3.20.

         Section 3.15 REO PROPERTY.

                  (a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Further, the
Master Servicer shall, to the extent provided in the related Servicing
Agreement, cause the applicable Servicer to sell any REO Property prior to three
years after the end of the calendar year of its acquisition by REMIC I, REMIC II
or REMIC V as applicable, unless (i) the Trustee and the Securities
Administrator shall have been supplied with an Opinion of Counsel to the effect
that the holding by the Trust Fund of such REO Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of any REMIC hereunder as defined in Section 860F of the Code or
cause any REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel) or (ii) the applicable Servicer shall have applied for, prior to the
expiration of such three-year period, an extension of such three-year period in
the manner contemplated by Section 856(e)(3) of the Code, in which case the
three-year period shall be extended by the applicable extension period. The
Master Servicer shall cause the applicable Servicer (to the extent provided in
the related Servicing Agreement) to protect and conserve, such REO Property in
the manner and to the

                                      -94-
<PAGE>

extent required by the applicable Servicing Agreement, in accordance with the
REMIC Provisions and in a manner that does not result in a tax on "net income
from foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

                  (b) The Master Servicer shall, to the extent required by the
related Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.

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

                  (d) To the extent provided in the related Servicing Agreement,
the Liquidation Proceeds from the final disposition of the REO Property, net of
any payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Distribution Account on the next succeeding Remittance Date.

         Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

                  (a) The Master Servicer shall deliver to the Trustee and the
Rating Agencies on or before March 15 of each year, commencing on March 15,
2005, an Officer's Certificate signed by a Servicing Officer, certifying that
with respect to the period ending December 31 of the prior year: (i) such
Servicing Officer has reviewed the activities of such Master Servicer during the
preceding calendar year or portion thereof and its performance under this
Agreement, (ii) to the best of such Servicing Officer's knowledge, based on such
review, such Master Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement in all material respects
throughout such year, or, if there has been a default in the fulfillment of any
such duties, responsibilities or obligations, specifying each such default known
to such Servicing Officer and the nature and status thereof, (iii) nothing has
come to the attention of such Servicing Officer to lead such Servicing Officer
to believe that any Servicer has failed to perform any of its duties,
responsibilities and obligations under its Servicing Agreement in all material
respects throughout such year, or, if there has been a material default in the
performance or fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof.

                  (b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).

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<PAGE>

         Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Loans, then the Master Servicer at its expense shall cause a nationally
recognized firm of independent certified public accountants to furnish a
statement to the Trustee, the Rating Agencies and the Seller on or before March
15 of each year, commencing on March 15, 2005 to the effect that, with respect
to the most recently ended fiscal year, such firm has examined certain records
and documents relating to the Master Servicer's performance of its servicing
obligations under this Agreement and pooling and servicing and trust agreements
in material respects similar to this Agreement and to each other and that, on
the basis of such examination conducted substantially in compliance with the
audit program for mortgages serviced for Freddie Mac or the Uniform Single
Attestation Program for Mortgage Bankers, such firm is of the opinion that the
Master Servicer's activities have been conducted in compliance with this
Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies (unless
(i) the Master Servicer shall have failed to provide the Trustee with such
statement or (ii) the Trustee shall be unaware of the Master Servicer's failure
to provide such statement). If such report discloses exceptions that are
material, the Master Servicer shall advise the Trustee whether such exceptions
have been or are susceptible of cure, and shall take prompt action to do so.

         Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.

                  (a) Within 15 days after each Distribution Date, the Master
Servicer shall, in accordance with industry standards, file with the Commission
via the Electronic Data Gathering and Retrieval System ("EDGAR"), a Form 8-K
with a copy of the statement to be furnished by the Securities Administrator to
the Certificateholders for such Distribution Date as an exhibit thereto. Prior
to January 30, 2005, the Master Servicer shall, in accordance with industry
standards, file a Form 15 Suspension Notice with respect to the Trust Fund, if
applicable. Prior to March 30, 2005 and annually thereafter (if required), the
Master Servicer shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. Such Form 10-K shall include, to the
extent available, as exhibits (i) each applicable Servicer's annual statement of
compliance described under the related Servicing Agreement, (ii) each applicable
Servicer's accountant's report described under the related Servicing Agreement,
(iii) the Master Servicer's accountant's report described in Section 3.17, if
applicable, in each case to the extent timely delivered, if applicable, to the
Master Servicer, and (iv) a written certification signed by an officer of the
Master Servicer that complies with the Sarbanes-Oxley Act of 2002 as in effect
on the date of this Agreement and the February 3, 2003 Statement by the Staff of
the Division of Corporation Finance of the Commission Regarding Compliance by
Asset-Backed Issuers with Exchange Act Rules 13a-14 and 15d-14 as in effect as
of the date of this Agreement. The Depositor hereby grants to the Master
Servicer a limited power of attorney to execute and file each Form 8-K and Form
10-K on behalf of the Depositor. Such power of attorney shall continue until
either the earlier of (i) receipt by the Master Servicer from the Depositor of
written termination of such power of attorney and (ii) the termination of the
Trust Fund. The Depositor and the Trustee each agree to promptly furnish to the
Master Servicer, from time to time upon

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request, such further information, reports and financial statements within its
control related to this Agreement and the Loans as the Master Servicer
reasonably deems appropriate to prepare and file all necessary reports with the
Commission. The Master Servicer shall cooperate with the Depositor in connection
with any additional filings with respect to the Trust Fund as the Depositor
deems necessary under the Exchange Act. Copies of all reports filed by the
Master Servicer under the Exchange Act shall be sent to the Depositor.

                  (b) The Master Servicer shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Master Servicer's
obligations under this Section 3.18 or the Master Servicer's negligence, bad
faith or willful misconduct in connection therewith. Fees and expenses incurred
by the Master Servicer in connection with this Section 3.18 shall not be
reimbursable from the Trust Fund.

         Section 3.19 UCC. The Depositor shall file any financing statements or
amendments thereto required by any change in the Uniform Commercial Code. The
Depositor agrees to file continuation statements for any such Uniform Commercial
Code financing statements which the Seller or the Depositor filed in connection
with the Trust Fund.

         Section 3.20 OBLIGATION OF THE MASTER SERVICER IN RESPECT OF
COMPENSATING INTEREST. The Master Servicer shall deposit in the related
Distribution Account not later than each related Distribution Account Deposit
Date an amount equal to the lesser of (i) the aggregate amounts required to be
paid by the related Servicer under the related Servicing Agreement with respect
to Compensating Interest on the related Loans for the related Distribution Date,
and not so paid by such Servicer and (ii) the Master Servicing Compensation for
such Distribution Date, without reimbursement therefor.

         Section 3.21 RESERVED.

         Section 3.22 PROTECTED ACCOUNTS.

                  (a) The Master Servicer shall enforce the obligation of each
Servicer to establish and maintain a Protected Account in accordance with the
applicable Servicing Agreement, with records to be kept with respect thereto on
a Loan by Loan basis, into which accounts shall be deposited within 48 hours (or
as of such other time specified in the related Servicing Agreement) of receipt
all collections of principal and interest on any Loan and with respect to any
REO Property received by a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries and advances made from the
Servicer's own funds (less servicing compensation as permitted by the applicable
Servicing Agreement in the case of any Servicer) and all other amounts to be
deposited in the Protected Account. Each Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes
required or permitted by the related Servicing Agreement. To the extent provided
in the related Servicing Agreement, the Protected Account shall be held in a
depository institution and segregated on the books of such institution in the
name of the Trustee for the benefit of the related Certificateholders.

                                      -97-
<PAGE>

                  (b) To the extent provided in the related Servicing Agreement,
amounts on deposit in a Protected Account may be invested in Eligible
Investments in the name of the Trustee for the benefit of Certificateholders
and, except as provided in the preceding paragraph, not commingled with any
other funds, such Eligible Investments to mature, or to be subject to redemption
or withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the related Distribution Account, and shall be held
until required for such deposit. The income earned from Eligible Investments
made pursuant to this Section 3.22 shall be paid to the related Servicer under
the applicable Servicing Agreement, and amounts required to be distributed to
the Certificateholders resulting from the loss of monies from such investments
shall be borne by and be the risk of the related Servicer. The related Servicer
(to the extent provided in the Servicing Agreement) shall deposit the amount of
any such loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.

                  (c) To the extent provided in the related Servicing Agreement
and subject to this Article III, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from the
Protected Accounts and shall immediately deposit or cause to be deposited in the
related Distribution Account amounts representing the following collections and
payments (other than with respect to principal of or interest on the Loans due
on or before the Cut-Off Date):

                  (i) Monthly Payments on the Loans received or any related
         portion thereof advanced by the Servicers pursuant to the Servicing
         Agreements which were due on or before the related Due Date, net of the
         amount thereof comprising the Servicing Fees;

                  (ii) Principal Prepayments, Liquidation Proceeds, Insurance
         Proceeds and Subsequent Recoveries received by the Servicers with
         respect to such Loans in the related Prepayment Period, Compensating
         Interest and the amount of any related Prepayment Charges; and

                  (iii) Any amount to be used as an Advance.

                  (d) Withdrawals may be made from an Account only to make
remittances as provided in Section 3.22(c), 3.23 and 3.24 or as otherwise
provided in the Servicing Agreements; to reimburse the Master Servicer or a
Servicer for Advances which have been recovered by subsequent collection from
the related Mortgagor; to remove amounts deposited in error; to remove fees,
charges or other such amounts deposited on a temporary basis; or to clear and
terminate the account at the termination of this Agreement in accordance with
Section 9.1. As provided in Sections 3.22(c) and 3.23(b) or as otherwise
provided in the Servicing Agreements certain amounts otherwise due to the
Servicers may be retained by them and need not be deposited in the related
Distribution Account.

         Section 3.23 DISTRIBUTION ACCOUNTS.

                  (a) The Securities Administrator shall establish and maintain,
for the benefit of the Certificateholders, a Distribution Account with respect
to the Group I Loans, a Distribution Account with respect

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to the Group II Loans and a Distribution Account with respect to the Group
III-VII Loans, in each case as a segregated trust account or accounts. The
Master Servicer shall deposit in the related Distribution Account as identified
by the Master Servicer and as received by the Master Servicer, the following
amounts with respect to the related Loan Group(s):

                  (i) Any amounts withdrawn from a Protected Account;

                  (ii) Any Advance and any amounts in respect of Prepayment
         Interest Shortfalls or Curtailment Shortfalls;

                  (iii) Any Insurance Proceeds, Liquidation Proceeds, or
         Subsequent Recoveries received by or on behalf of the Master Servicer;

                  (iv) The Purchase Price with respect to any Loans purchased by
         the Seller pursuant to Section 2.3 and all proceeds of any Loans or
         property acquired with respect thereto purchased by the Terminator
         pursuant to Section 9.1;

                  (v) Any amounts required to be deposited by the Master
         Servicer or any Servicer with respect to losses on investments of
         deposits in an Account; and

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

                  (b) All amounts deposited to a Distribution Account shall be
held by the Securities Administrator in trust for the benefit of the related
Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the related Distribution Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges or
assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges, need not be credited by
the Master Servicer or the related Servicer to the related Distribution Account.
In the event that the Master Servicer shall deposit or cause to be deposited to
a Distribution Account any amount not required to be credited thereto, the
Securities Administrator, upon receipt of a written request therefor signed by a
Servicing Officer of the Master Servicer, shall promptly transfer such amount to
the Master Servicer, any provision herein to the contrary notwithstanding.

                  (c) The Distribution Accounts shall constitute trust accounts
of the Trust Fund segregated on the books of the Securities Administrator and
held by the Securities Administrator in trust in its Corporate Trust Office, and
the Distribution Accounts and the funds deposited therein shall not be subject
to, and shall be protected from, all claims, liens, and encumbrances of any
creditors or depositors of the Securities Administrator (whether made directly,
or indirectly through a liquidator or receiver of the Securities Administrator).
The amount at any time credited to the Distribution Accounts shall be invested
in the name of the Master Servicer, in such Eligible Investments selected by the
Master Servicer or deposited in demand deposits with such depository
institutions as selected by the Master Servicer, provided that time deposits of
such depository institutions would be an Eligible Investment. All Eligible
Investments shall mature or be subject to redemption or withdrawal on or before,
and shall be held until, the Distribution Date following the date of the
investment of such funds (the "Investment

                                      -99-
<PAGE>

Withdrawal Distribution Date") if the obligor for such Eligible Investment is
the Securities Administrator or, if such obligor is any other Person, the
Business Day preceding such Investment Withdrawal Distribution Date. All
investment earnings on amounts on deposit in the Distribution Accounts from time
to time shall be for the account of the Master Servicer. The Master Servicer
shall be permitted to receive distribution of any and all investment earnings
from the Distribution Accounts on each Distribution Date. If there is any loss
on an Eligible Investment or demand deposit, the Master Servicer shall deposit
such amount in the related Distribution Account. With respect to each
Distribution Account and the funds deposited therein, the Securities
Administrator shall take such action as may be necessary to ensure that the
related Certificateholders shall be entitled to the priorities afforded to such
a trust account (in addition to a claim against the estate of the Securities
Administrator) as provided by 12 U.S.C. ss. 92a(e), and applicable regulations
pursuant thereto, if applicable, or any applicable comparable state statute
applicable to state chartered banking corporations.

         Section 3.24 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNTS.

                  (a) The Securities Administrator shall, from time to time on
demand of the Master Servicer make or cause to be made such withdrawals or
transfers from the related Distribution Account as the Master Servicer has
designated for such transfer or withdrawal pursuant to the Servicing Agreements
with respect to the related Loans for the following purposes, not in any order
of priority:

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

                  (ii) to reimburse the Master Servicer or any Servicer from
         Insurance Proceeds or Liquidation Proceeds relating to a particular
         Loan for amounts expended by the Master Servicer or such Servicer in
         good faith in connection with the restoration of the related Mortgaged
         Property which was damaged by an Uninsured Cause or in connection with
         the liquidation of such Loan;

                  (iii) to reimburse the Master Servicer or any Servicer from
         Insurance Proceeds relating to a particular Loan for insured expenses
         incurred with respect to such Loan and to reimburse the Master Servicer
         or such Servicer from Liquidation Proceeds from a particular Loan for
         Liquidation Expenses incurred with respect to such Loan;

                  (iv) to pay the Master Servicer or any Servicer, as
         appropriate, from Liquidation Proceeds or Insurance Proceeds received
         in connection with the liquidation of any Loan, the amount which it or
         such Servicer would have been entitled to receive under subclause (vii)
         of this Subsection (a) as servicing compensation on account of each
         defaulted scheduled payment on such Loan if paid in a timely manner by
         the related Mortgagor;

                                     -100-
<PAGE>

                  (v) to pay the Master Servicer or any Servicer from the
         Purchase Price for any Loan, the amount which it or such Servicer would
         have been entitled to receive under subclause (vii) of this Subsection
         (a) as servicing compensation;

                  (vi) to reimburse the Master Servicer or any Servicer for any
         Nonrecoverable Advance, after a Realized Loss has been allocated with
         respect to the related Loan if the Advance or Servicing Advance has not
         been reimbursed pursuant to clause (i);

                  (vii) to pay the Servicing Fee to the Servicers (to the extent
         such Servicing Fee was not retained by the Servicer pursuant to the
         related Servicing Agreement) and, with respect to the Group I Loans and
         Group II Loans, the Credit Risk Management Fee to the Credit Risk
         Manager, for such Distribution Date and the amount of any income or
         gain realized from investments of funds on deposit in the Distribution
         Account pursuant to Section 3.14 hereof and to reimburse the Master
         Servicer for expenses, costs and liabilities incurred by and
         reimbursable to it pursuant to Sections 3.3 and 6.3;

                  (viii) to reimburse or pay any Servicer any such amounts as
         are due thereto under the applicable Servicing Agreement and have not
         been retained by or paid to the Servicer, to the extent provided in the
         related Servicing Agreement;

                  (ix) to reimburse the Trustee, the Custodian and the
         Securities Administrator for expenses, costs and liabilities, if any,
         incurred by or reimbursable to such parties pursuant to this Agreement;

                  (x) to remove amounts deposited in error; and

                  (xi) to clear and terminate the related Distribution Account
         pursuant to Section 9.1.

                  (b) The Master Servicer shall keep and maintain separate
accounting, on a Loan by Loan basis, for the purpose of accounting for any
reimbursement from the related Distribution Account pursuant to subclauses (i)
through (v), inclusive, or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the related Distribution Account under
Section 3.23(b).

                  (c) On each Distribution Date, the Securities Administrator
shall distribute the Available Distribution Amount with respect to each Loan
Group to the Holders of the related Certificates in accordance with Section 4.1,
4.3 or 4.5, as applicable.

         Section 3.25 RESERVE FUNDS.

                  (a) No later than the Closing Date, the Securities
Administrator shall establish and maintain (i) a separate, segregated trust
account titled, "Reserve Fund, Wells Fargo Bank, N.A., in trust for the
registered holders of Deutsche Mortgage Securities, Inc. Mortgage Loan Trust,
Series 2004-4, Mortgage Pass-Through Certificates, Group I Certificates" (the
"Group I Reserve Fund"), (ii) a separate, segregated trust account titled,
"Reserve Fund, Wells Fargo Bank, N.A., in trust for the registered holders of
Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series 2004-4, Mortgage
Pass-Through Certificates, Group II Certificates" (the

                                     -101-
<PAGE>

"Group II Reserve Fund") and (iii) a separate, segregated trust account titled,
"Reserve Fund, Wells Fargo Bank, N.A., in trust for the registered holders of
Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series 2004-4, Mortgage
Pass-Through Certificates, Group VII Certificates" (the "Group VII Reserve
Fund"). The Group I Reserve Fund shall include any payments received by the
Securities Administrator under the Class I-A-1 Cap Contract which shall be
deposited into the Group I Reserve Fund for the benefit of the related
Certificateholders. The Group II Reserve Fund shall include any payments
received by the Securities Administrator under the Class II-AR-1 Cap Contract,
Class II-AR-2 Cap Contract, Class II-MR-1 Cap Contract, Class II-MR-2 Cap
Contract and Class II-MR-3 Cap Contract, which payments shall be deposited into
the Group II Reserve Fund for the benefit of the related Certificateholders. The
Group VII Reserve Fund shall include any payments received by the Securities
Administrator under the Class VII-AR-1 Cap Contract and Class VII-AR-2 Cap
Contract, which payments shall be deposited into the Group VII Reserve Fund for
the benefit of the related Certificateholders.

                  (b) (i) On each Distribution Date as to which there is a Net
WAC Rate Carryover Amount payable to the Group I Senior Certificates and Group I
Mezzanine Certificates, the Securities Administrator will deposit into the Group
I Reserve Fund the amounts described in Section 4.1(c)(v) rather than
distributing such amounts to the Class I-CE Certificateholders. On each such
Distribution Date, the Securities Administrator shall hold all such amounts for
the benefit of the Holders of the Group I Senior Certificates (other than the
Class I-A-IO Certificates) and the Group I Mezzanine Certificates, and will
distribute such amounts to the Holders of the Group I Senior Certificates (other
than the Class I-A-IO Certificates) and the Group I Mezzanine Certificates in
the amounts and priorities set forth in the last paragraph of Section 4.1(c).

                           (ii) On each Distribution Date as to which there is a
Net WAC Rate Carryover Amount payable to the Group II Senior Certificates and
the Group II Mezzanine Certificates, the Securities Administrator will deposit
into the related Reserve Fund the amounts described in Section 4.3(c)(v) rather
than distributing such amounts to the Class II-CE Certificateholders. On each
such Distribution Date, the Securities Administrator shall hold all such amounts
for the benefit of the Holders of the Group II Senior Certificates and the Group
II Mezzanine Certificates, and will distribute such amounts to the Holders of
the Group II Senior Certificates and the Group II Mezzanine Certificates in the
amounts and priorities set forth in the last paragraph of Section 4.3(c).

                  (c) For federal and state income tax purposes, the Class I-CE
Certificateholders will be deemed to be the owners of the Group I Reserve Fund,
and the Class II-CE Certificateholders will be deemed to be the owners of the
Group II Reserve Fund and all amounts deposited into the related Reserve Fund
(other than the initial deposit therein of $1,000) shall be treated as amounts
distributed by REMIC IV to the Holders of the related Class CE Certificates.
Upon the termination of the Trust Fund, a Cleanup Call pursuant to Section 9.1
or the payment in full of the Group I Certificates or Group II Certificates, all
amounts remaining on deposit in the related Reserve Funds will be released by
the Trust Fund and distributed to the related Class CE Certificateholders or
their designees. The Reserve Funds will be part of the Trust Fund but not part
of any REMIC and any payments to the Holders of the related Senior Certificates
or the related Mezzanine Certificates of Net WAC Rate Carryover Amounts will not
be payments with respect to a "regular interest" in a REMIC within the meaning
of Code Section 860(G)(a)(1).

                                     -102-
<PAGE>

                  (d) For federal and state income tax purposes, the Seller will
be deemed to be the owners of the Group VII Reserve Fund and all amounts
deposited into the Group VII Reserve Fund (other than the initial deposit
therein of $1,000) shall be treated as amounts distributed by REMIC VII to the
Seller. Upon the termination of the Trust Fund, a Cleanup Call pursuant to
Section 9.1 or the payment in full of the Group III-VII Certificates, all
amounts remaining on deposit in the Group VII Reserve Fund will be released by
the Trust Fund and distributed to the Seller or its designee. The Group VII
Reserve Fund will be part of the Trust Fund but not part of any REMIC and any
payments to the Holders of the related Group III-VII Certificates of Net WAC
Rate Carryover Amounts will not be payments with respect to a "regular interest"
in a REMIC within the meaning of Code Section 860(G)(a)(1).

                  (e) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees that the Securities Administrator will deposit
into the related Reserve Fund the amounts described above on each Distribution
Date rather than distributing such amounts to the Class CE Certificateholders.
By accepting a Class CE Certificate, each Class CE Certificateholder further
agrees that its agreement to such action by the Securities Administrator is
given for good and valuable consideration, the receipt and sufficiency of which
is acknowledged by such acceptance.

                  (f) The Securities Administrator shall direct any depository
institution maintaining a Reserve Fund to invest the funds in such account in
one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the
Securities Administrator or an Affiliate manages or advises such investment, and
(ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Securities Administrator or
an Affiliate manages or advises such investment. All income and gain earned upon
such investment shall be deposited into the related Reserve Fund. In no event
shall the Securities Administrator be liable for any investments made pursuant
to this clause (e).

                  (g) For federal tax return and information reporting, the
right of the Holders of the (i) Class I-A-1 Certificates, (ii) Class II-AR-1
Certificates, (iii) Class II-AR-2 Certificates, (iv) Class II-MR-1 Certificates,
(v) Class II-MR-2 Certificates, (vi) Class II-MR-3 Certificates, (vii) Class
VII-AR-1 Certificates and (viii) Class VII-AR-2 Certificates to receive payments
from the related Reserve Fund in respect of any Net WAC Rate Carryover Amount
shall be assigned a value of (i) $20,000.00, (ii) $1,833,288.00, (iii)
$1,612,023.00, (iv) $101,062.00, (v) $82,690.00, (vi) $45,938.00, (vii)
$1,058,000.00 and (viii) $3,030,000.00, respectively. For federal tax return and
information reporting, the right of the Holders of the Group I Senior
Certificates (other than the Class I-A-1 Certificates) and the Group I Mezzanine
Certificates to receive payments from the related Reserve Fund in respect of any
Net WAC Rate Carryover Amount shall be assigned a value of $0.00.

         Section 3.26 PREPAYMENT PENALTY VERIFICATION.

                  On or prior to each Servicer Remittance Date, each Servicer
shall, to the extent provided in the respective Servicing Agreement, provide in
an electronic format acceptable to the Master Servicer the data necessary for
the Master Servicer to perform its verification duties

                                     -103-
<PAGE>

agreed to by the Master Servicer and the Depositor. The Master Servicer or a
third party reasonably acceptable to the Master Servicer and the Depositor (the
"Verification Agent") will perform such verification duties and will use its
best efforts to issue its findings in a report (the "Verification Report")
delivered to the Master Servicer and the Depositor within ten (10) Business Days
following the related Distribution Date; provided, however, that if the
Verification Agent is unable to issue the Verification Report within ten (10)
Business Days following the Distribution Date, the Verification Agent may issue
and deliver to the Master Servicer and the Depositor the Verification Report
upon the completion of its verification duties. The Master Servicer shall
forward the Verification Report to the respective Servicer and shall notify such
Servicer if the Master Servicer has determined that such Servicer did not
deliver the appropriate Prepayment Charges to the Master Servicer in accordance
with the respective Servicing Agreement. Such written notification from the
Master Servicer shall include the loan number, prepayment penalty code and
prepayment penalty amount as calculated by the Master Servicer or the
Verification Agent, as applicable, of each Loan for which there is a
discrepancy. If the respective Servicer agrees with the verified amounts, such
Servicer shall adjust the immediately succeeding Remittance Report and the
amount remitted to the Master Servicer with respect to prepayments accordingly.
If the respective Servicer disagrees with the determination of the Master
Servicer, such Servicer shall, within five (5) Business Days of its receipt of
the Verification Report, notify the Master Servicer of such disagreement and
provide the Master Servicer with detailed information to support such Servicer's
position. The respective Servicer and the Master Servicer shall cooperate to
resolve any discrepancy on or prior to the immediately succeeding Servicer
Remittance Date, and such Servicer will indicate the effect of such resolution
on the related Remittance Report and shall adjust the amount remitted with
respect to prepayments on such Servicer Remittance Date accordingly.

                  During such time as the respective Servicer and the Master
Servicer are resolving discrepancies with respect to the Prepayment Charges, no
payments in respect of any disputed Prepayment Charges will be remitted to the
related Distribution Account(s) and the Master Servicer shall not be obligated
to remit such payments, unless otherwise required pursuant to Section 7.1
hereof. In connection with such duties, the Master Servicer shall be able to
rely solely on the information provided to it (if any) by the respective
Servicer in accordance with this Section. The Master Servicer shall not be
responsible for verifying the accuracy of any of the information provided to it
by the respective Servicer.

                                     -104-
<PAGE>

                                   ARTICLE IV

                    PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
                             STATEMENTS AND REPORTS

         Section 4.1 DISTRIBUTIONS TO GROUP I CERTIFICATEHOLDERS.

                  On each Distribution Date, the Securities Administrator, to
the extent on deposit therein and based solely upon the Remittance Report for
such Distribution Date, shall withdraw from the Distribution Account for the
Group I Loans, the Group I Available Distribution Amount for such Distribution
Date and distribute to each Holder of a Group I Certificate, by wire transfer in
immediately available funds for the account of such Certificateholder or by any
other means of payment acceptable to each related Certificateholder of record on
the immediately preceding Record Date (other than as provided in Section 9.1
respecting the final distribution) as specified by each such Certificateholder
and at the address of such Holder appearing in the Certificate Register, from
the amount so withdrawn and to the extent of such Group I Available Distribution
Amount, such Certificateholder's Percentage Interest of the following amounts
and in following order and priority:

                  (a) On each Distribution Date, the Securities Administrator
         shall distribute the Interest Remittance Amount with respect to the
         Group I Certificates for such Distribution Date in the following order
         and priority:

                           (i)      first, to the Holders of each Class of Group
                                    I Senior Certificates, the related Senior
                                    Interest Distribution Amount for such
                                    Distribution Date and such Class, on a pro
                                    rata basis based on the entitlement of each
                                    such Class;

                           (ii)     second, to the Holders of the Class I-M-1
                                    Certificates, the related Interest
                                    Distribution Amount allocable to such
                                    Certificates to the extent of the related
                                    Interest Remittance Amount for such
                                    Distribution Date remaining after payment of
                                    the related Senior Interest Distribution
                                    Amount to the Group I Senior Certificates;

                           (iii)    third, to the Holders of the Class I-M-2
                                    Certificates, the Interest Distribution
                                    Amount allocable to such Certificates to the
                                    extent of the related Interest Remittance
                                    Amount for such Distribution Date remaining
                                    after payment of the related Senior Interest
                                    Distribution Amount to the Group I Senior
                                    Certificates and the related Interest
                                    Distribution Amount to the Class I-M-1
                                    Certificates;

                           (iv)     fourth, to the Holders of the Class I-M-3
                                    Certificates, the Interest Distribution
                                    Amount allocable to such Certificates to the
                                    extent of the related Interest Remittance
                                    Amount for such Distribution Date remaining
                                    after payment of the related Senior Interest
                                    Distribution Amount to the Group I Senior
                                    Certificates and the related Interest
                                    Distribution Amounts to the Class I-M-1
                                    Certificates and the Class I-M-2
                                    Certificates;

                                     -105-
<PAGE>

                  (b) On each Distribution Date, the Securities Administrator
         shall distribute the Group I Principal Distribution Amount to the
         Holders of each Class of Group I Certificates, other than the Class
         I-A-IO Certificates, Class I-P Certificates and Class I-CE
         Certificates, in the following order and priority:

                           (i)      The Group I Senior Principal Distribution
                                    Amount will be distributed as follows:

                                    (A) first, to the Class I-A-6 Certificates,
                           an amount up to the Class I-A-6 Lockout Distribution
                           Amount for that Distribution Date, until the
                           Certificate Principal Balance thereof has been
                           reduced to zero; and

                                    (B) second, any remaining Group I Senior
                           Principal Distribution Amount after the distribution
                           described above, sequentially:

                                             (1) to the Class I-A-1
                                    Certificates, until the Certificate
                                    Principal Balance thereof has been reduced
                                    to zero;

                                             (2) to the Class I-A-2
                                    Certificates, until the Certificate
                                    Principal Balance thereof has been reduced
                                    to zero;

                                             (3) to the Class I-A-3
                                    Certificates, until the Certificate
                                    Principal Balance thereof has been reduced
                                    to zero;

                                             (4) to the Class I-A-4
                                    Certificates, until the Certificate
                                    Principal Balance thereof has been reduced
                                    to zero;

                                             (5) to the Class I-A-5
                                    Certificates, until the Certificate
                                    Principal Balance thereof has been reduced
                                    to zero; and

                                             (6) to the Class I-A-6
                                    Certificates, until the Certificate
                                    Principal Balance thereof has been reduced
                                    to zero.

                           (ii)     Holders of the Class I-M-1 Certificates will
                                    be entitled to receive on each Distribution
                                    Date, to the extent of the portion of the
                                    Group I Principal Distribution Amount
                                    remaining after the Group I Senior Principal
                                    Distribution Amount has been distributed,
                                    the Class I-M-1 Principal Distribution
                                    Amount in reduction of the Certificate
                                    Principal Balance thereof, until the
                                    Certificate Principal Balance of the Class
                                    I-M-1 Certificates has been reduced to zero.

                           (iii)    Holders of the Class I-M-2 Certificates will
                                    be entitled to receive on each Distribution
                                    Date, to the extent of the portion of the
                                    Group I Principal Distribution Amount
                                    remaining after the sum of the Group I
                                    Senior Principal Distribution Amount and the
                                    Class I-M-1 Principal Distribution Amount
                                    has been distributed, the Class I-M-2
                                    Principal Distribution Amount in reduction
                                    of the Certificate Principal Balance
                                    thereof, until the Certificate Principal
                                    Balance of the Class I-M-2 Certificates has
                                    been reduced to zero.

                           (iv)     Holders of the Class I-M-3 Certificates will
                                    be entitled to receive on each Distribution
                                    Date, to the extent of the portion of the
                                    Group I Principal Distribution Amount
                                    remaining after the sum of the Group I
                                    Senior Principal Distribution Amount, the
                                    Class I-M-1 Principal Distribution Amount
                                    and the Class I-M-2 Principal Distribution
                                    Amount has been distributed, the Class I-M-3
                                    Principal Distribution Amount in reduction
                                    of the Certificate Principal Balance
                                    thereof, until the Certificate Principal
                                    Balance of the Class I-M-3 Certificates has
                                    been reduced to zero.

                                     -106-
<PAGE>

                  (c) On each Distribution Date, the Securities Administrator
         shall distribute any related Net Monthly Excess Cashflow for such
         Distribution Date in the following order of priority:

                           (i)      to the Holders of the Group I Senior
                                    Certificates (other than the Class I-A-IO
                                    Certificates) and Group I Mezzanine
                                    Certificates, an amount equal to the related
                                    Extra Principal Distribution Amount for such
                                    Distribution Date in accordance with clause
                                    (d) below;

                           (ii)     to the Holders of the Class I-M-1
                                    Certificates, in an amount equal to the
                                    related Interest Carry Forward Amount for
                                    such Distribution Date allocable to such
                                    Class of Certificates;

                           (iii)    to the Holders of the Class I-M-2
                                    Certificates, in an amount equal to the
                                    related Interest Carry Forward Amount for
                                    such Distribution Date allocable to such
                                    Class of Certificates;

                           (iv)     to the Holders of the Class I-M-3
                                    Certificates, in an amount equal to the
                                    related Interest Carry Forward Amount for
                                    such Distribution Date allocable to such
                                    Class of Certificates;

                           (v)      to the Group I Reserve Fund, an amount equal
                                    to (a) with respect to the Group I Senior
                                    Certificates (other than the Class I-A-1
                                    Certificates and the Class I-A-IO
                                    Certificates), the sum of the related Net
                                    WAC Rate Carryover Amounts, if any, (b) with
                                    respect to the Class I-A-1 Certificates, the
                                    amount by which the sum of the Net WAC Rate
                                    Carryover Amounts with respect to the Class
                                    I-A-1 Certificates exceeds the sum of any
                                    amounts received by the Securities
                                    Administrator with respect to the Class
                                    I-A-I Cap Contract since the prior
                                    Distribution Date and (c) with respect to
                                    the Group I Mezzanine Certificates, the sum
                                    of the related Net WAC Rate Carryover
                                    Amounts, if any;

                           (vi)     to the Holders of the Class I-M-1, Class
                                    I-M-2 and Class I-M-3 Certificates, in that
                                    order, the Allocated Realized Loss Amount
                                    allocable to each such Class of Certificate;

                                     -107-
<PAGE>

                           (vii)    to the Holders of the Class II-MR-1, Class
                                    II-MR-2 and Class II-MR-3 Certificates, in
                                    that order, the Allocated Realized Loss
                                    Amount allocable to each such Class of
                                    Certificate to the extent remaining unpaid
                                    from Net Monthly Excess Cashflow relating to
                                    the Group II Certificates as described under
                                    Section 4.3(c) hereof;

                           (viii)   to the Holders of the Class I-CE
                                    Certificates, the related Interest
                                    Distribution Amount and any related
                                    Overcollateralization Reduction Amount for
                                    such Distribution Date; and

                           (ix)     to the Holders of the Class I/II-R
                                    Certificates, any remaining amounts;
                                    provided, however, that on the Distribution
                                    Date in May 2009 and for each Distribution
                                    Date thereafter any such remaining amounts
                                    will be distributed first, to the Holders of
                                    the Class I-P Certificates, until the
                                    Certificate Principal Balance thereof has
                                    been reduced to zero; and second, to the
                                    Holders of the Class I/II-R Certificates.

         On each Distribution Date, the Securities Administrator, after making
the required distributions of interest and principal to the Group I Senior
Certificates and Group I Mezzanine Certificates as described in Section 4.1(a)
and (b) above, and after the distribution of the Net Monthly Excess Cashflow
with respect to the Group I Loans as described in Section 4.1(c), the Securities
Administrator will withdraw from the Group I Reserve Fund the amounts on deposit
therein and distribute such amounts to the Group I Senior Certificates (other
than the Class I-A-IO Certificates) and the Group I Mezzanine Certificates, in
respect of any Net WAC Rate Carryover Amounts in the following manner and order
of priority: first, concurrently to the Group I Senior Certificates, other than
the Class I-A-IO Certificates, on a pro rata basis, the related Net WAC Rate
Carryover Amount for such Distribution Date for each such Class; second, to the
Class I-M-1 Certificates, the related Net WAC Rate Carryover Amount for such
Distribution Date for such Class; third, to the Class I-M-2 Certificates, the
related Net WAC Rate Carryover Amount for such Distribution Date for such Class;
and fourth, to the Class I-M-3 Certificates, the related Net WAC Rate Carryover
Amount for such Distribution Date for such Class.

                  (d) (i) On each Distribution Date (x) prior to the Group I
         Stepdown Date or (y) on which a Group I Trigger Event is in effect, the
         related Extra Principal Distribution Amount shall be distributed in the
         following order of priority:

                           (A) first, to the Holders of the Class I-A-6
                  Certificates, up to the Class I-A-6 Lockout Distribution
                  Amount;

                           (B) second, to the Holders of the Class I-A-1, Class
                  I-A-2, Class I-A-3, Class I-A-4, Class I-A-5 and Class I-A-6
                  Certificates, on a pro rata basis based on the Certificate
                  Principal Balance of each such Class, until the Certificate
                  Principal Balance of each such Class has been reduced to zero;

                                     -108-
<PAGE>

                           (C) third, to the Holders of the Class I-M-1
                  Certificates, until the Certificate Principal Balance thereof
                  has been reduced to zero;

                           (D) fourth, to the Holders of the Class I-M-2
                  Certificates, until the Certificate Principal Balance thereof
                  has been reduced to zero; and

                           (E) fifth, to the Holders of the Class I-M-3
                  Certificates, until the Certificate Principal Balance thereof
                  has been reduced to zero.

         (ii)         On each Distribution Date (x) on or after the Group I
                      Stepdown Date and (b) on which a Group I Trigger Event is
                      not in effect, distributions of principal to the extent of
                      the related Extra Principal Distribution Amount shall be
                      distributed in the following order of priority:

                           (A) first, the lesser of (x) the related Extra
                  Principal Distribution Amount and (y) the Class I-A-6 Lockout
                  Distribution Amount, shall be distributed to the Holders of
                  the Class I-A-6 Certificates until the Certificate Principal
                  Balance thereof has been reduced to zero;

                           (B) second, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount over (ii) the
                  amount distributed to the Holders of the Class I-A-6
                  Certificates under clause (A) immediately above, and (y) the
                  Group I Senior Principal Distribution Amount, shall be
                  distributed to the Holders of the Class I-A-1, Class I-A-2,
                  Class I-A-3, Class I-A-4, Class I-A-5 and Class I-A-6
                  Certificates, in that order, until the Certificate Principal
                  Balance of each such Class has been reduced to zero;

                           (C) third, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount over (ii) the
                  amount distributed to the Holders of the Group I Senior
                  Certificates under clauses (A) and (B) immediately above, and
                  (y) the Class I-M-1 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class I-M-1 Certificates,
                  until the Certificate Principal Balance of the Class I-M-1
                  Certificates has been reduced to zero;

                           (D) fourth, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount over (ii) the sum
                  of the amounts distributed to the Holders of the Group I
                  Senior Certificates under clauses (A) and (B) immediately
                  above and to the Holders of the Class I-M-1 Certificates under
                  clause (C) immediately above, and (y) the Class I-M-2
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class I-M-2 Certificates, until the Certificate
                  Principal Balance of the Class I-M-2 Certificates has been
                  reduced to zero; and

                           (E) fifth, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount over (ii) the sum
                  of the amount distributed

                                     -109-
<PAGE>

                  to the Holders of the Group I Senior Certificates under
                  clauses (A) and (B) immediately above, to the Holders of the
                  Class I-M-1 Certificates under clause (C) immediately above
                  and to the Holders of the Class I-M-2 Certificates under
                  clause (D) immediately above, and (y) the Class I-M-3
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class I-M-3 Certificates, until the Certificate
                  Principal Balance of the Class I-M-3 Certificates has been
                  reduced to zero.

                  (e) On each Distribution Date, the Securities Administrator
         shall withdraw any amounts then on deposit in the related Distribution
         Account that represent Prepayment Charges received on the Group I Loans
         and shall distribute such amounts to the Holders of the Class I-P
         Certificates.

         Section 4.2 ALLOCATION OF REALIZED LOSSES ON THE GROUP I LOANS.

         Prior to each Distribution Date, the Master Servicer, based solely on
the information provided by the related Servicers, shall determine the amount of
Realized Losses, if any, with respect to the Group I Loans.

         Realized Losses on the Group I Loans for any Distribution Date will
first, cause a reduction in the related Net Monthly Excess Cash Flow for that
Distribution Date and second, cause a reduction in the Certificate Principal
Balance of the Class I-CE Certificates for that Distribution Date, until the
Certificate Principal Balance thereof has been reduced to zero. To the extent
that Realized Losses on the Group I Loans on a Distribution Date cause the
aggregate Certificate Principal Balance of the Group I Senior (other than the
Class I-A-IO Certificates), Group I Mezzanine and Class I-P Certificates, after
taking into account all distributions on such Distribution Date to exceed the
aggregate Principal Balance of the Group I Loans as of the last day of the
related Due Period, such excess will be allocated first, to the Class I-M-3
Certificates; second, to the Class I-M-2 Certificates; and third, to the Class
I-M-1 Certificates in each case to reduce the Certificate Principal Balance
thereof until it has been reduced to zero. In addition, to the extent the
related Servicer receives Subsequent Recoveries with respect to any defaulted
Group I Loan, the amount of the Realized Loss with respect to that defaulted
Group I Loan will be reduced to the extent such Subsequent Recoveries are
applied to reduce the Certificate Principal Balance of any Class of Group I
Certificates on any Distribution Date.

         Any allocation of a Realized Loss on a Group I Loan to a Group I
Mezzanine Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated as of such
Distribution Date after all distributions on such Distribution Date have been
made. Any allocation of Realized Losses on a Group I Loan to a Class I-CE
Certificate shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.1(c)(viii). No allocations of Realized Losses
shall be made to the Group I Senior Certificates or the Class I-P Certificates.
Notwithstanding anything to the contrary in this Agreement, in no event will the
Certificate Principal Balance of any Group I Mezzanine Certificate be reduced
more than once in respect of any particular amount both (i) allocable to the
Group I Mezzanine Certificate in respect of Realized Losses and (ii) payable as
principal to the Holder of such Certificate from the related Net Monthly Excess
Cashflow.

                                     -110-
<PAGE>

         As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.

         In the event that the related Servicer collects a Subsequent Recovery
with respect to a defaulted Group I Loan that is a Liquidated Loan with respect
to which a Realized Loss has been incurred, such Subsequent Recovery will be
distributed as part of the Group I Available Distribution Amount in accordance
with the priorities described under Section 4.1. In addition, the Certificate
Principal Balance of each Class of Group I Mezzanine Certificates that has been
reduced by the allocation of a Realized Loss to such Certificate will be
increased, in order of seniority, by the amount of such Subsequent Recoveries,
but only to the extent that such Certificate has not been reimbursed for the
amount of such Realized Loss (or a portion thereof) allocated to such
Certificate from Net Monthly Excess Cashflow. Holders of such Certificates will
not be entitled to any payment in respect of current interest on the amount of
such increases for any Interest Accrual Period preceding the Distribution Date
on which such increase occurs.

         The principal portion of all Realized Losses on the Group I Loans shall
be allocated on each Distribution Date first, to REMIC I Regular Interest LTI-1
and REMIC I Regular Interest LTI-P, until the Uncertificated Principal Balances
have been reduced to zero and then sequentially to REMIC I Regular Interest
LTI-IO-1, REMIC I Regular Interest LTI-IO-2, REMIC I Regular Interest LTI-IO-3,
REMIC I Regular Interest LTI-IO-4, LTI-IO-5, LTI-IO-6, LTI-IO-7 and LTI-IO-8,
until the Uncertificated Principal Balances have been reduced to zero.

         All Realized Losses on the REMIC I Regular Interests shall be allocated
on each Distribution Date to the following REMIC III Regular Interests in the
specified percentages, as follows: first, to Uncertificated Accrued Interest
payable to the REMIC III Regular Interest LTIII-1AA and REMIC III Regular
Interest LTIII-1ZZ up to an aggregate amount equal to the REMIC III Group I
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of the REMIC III Regular Interest LTIII-1AA
and REMIC III Regular Interest LTIII-1ZZ up to an aggregate amount equal to the
REMIC III Group I Principal Loss Allocation Amount, 98% and 2%, respectively;
third, to the Uncertificated Principal Balances of REMIC III Regular Interest
LTIII-1AA, REMIC III Regular Interest LTIII-1M3 and to REMIC III Regular
Interest LTIII-1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC III Regular Interest LTIII-1M3 has been reduced to
zero; fourth, to the Uncertificated Principal Balances of REMIC III Regular
Interest LTIII-1AA, REMIC III Regular Interest LTIII-1M2 and REMIC III Regular
Interest LTIII-1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC III Regular Interest LTIII-1M2 has been reduced to
zero; and fifth, to the Uncertificated Principal Balances of REMIC III Regular
Interest LTIII-1AA, REMIC III Regular Interest LTIII-1M1 and REMIC III Regular
Interest LTIII-1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC III Regular Interest LTIII-1M1 has been reduced to
zero.

                                     -111-
<PAGE>

         Section 4.3 DISTRIBUTIONS TO GROUP II CERTIFICATEHOLDERS.

         On each Distribution Date, the Securities Administrator, to the extent
on deposit therein and based solely upon the Remittance Report for such
Distribution Date, shall withdraw from the Distribution Account for the Group II
Loans, the Group II Available Distribution Amount for such Distribution Date and
distribute to each Holder of a Group II Certificate by wire transfer in
immediately available funds for the account of such Certificateholder or by any
other means of payment acceptable to each related Certificateholder of record on
the immediately preceding Record Date (other than as provided in Section 9.1
respecting the final distribution) as specified by each such Certificateholder
and at the address of such Holder appearing in the Certificate Register, from
the amount so withdrawn and to the extent of such Group II Available
Distribution Amount, such Certificateholder's Percentage Interest of the
following amounts and in following order and priority:

                  (a) (i) On each Distribution Date, the Securities
         Administrator shall distribute the portion of the Interest Remittance
         Amount relating to the Group II-1 Loans for such Distribution Date in
         the following order and priority:

                           (A) first, to the Holders of the Class II-AR-1
                  Certificates, the related Senior Interest Distribution Amount
                  for such Distribution Date; and

                           (B) second, to the Holders of the Class II-AR-2
                  Certificates, the related Senior Interest Distribution Amount
                  to the extent remaining unpaid after the distribution of the
                  Interest Remittance Amount related to the Group II-2 Loans as
                  set forth in clause (a)(ii)(A) immediately below;

                  (ii)     On each Distribution Date, the Securities
                           Administrator shall distribute the portion of the
                           Interest Remittance Amount relating to the Group II-2
                           Loans for such Distribution Date in the following
                           order and priority:

                           (A) first, to the Holders of the Class II-AR-2
                  Certificates, the related Senior Interest Distribution Amount
                  for such Distribution Date; and

                           (B) second, to the Holders of the Class II-AR-1
                  Certificates, the related Senior Interest Distribution Amount
                  to the extent remaining unpaid after the distribution of the
                  Interest Remittance Amount related to the Group II-2 Loans as
                  set forth in clause (a)(i)(A) immediately above;

                  (iii)    On each Distribution Date, the Interest Remittance
                           Amount relating to the Group II Loans remaining after
                           distributions to the Class II-AR-1 Certificates and
                           Class II-AR-2 Certificates as set forth in clauses
                           (a)(i) and (a)(ii) above will be distributed to the
                           Holders of the Class II-MR-1, Class II-MR-2 and Class
                           II-MR-3 Certificates, in that order, in an amount
                           equal to the Interest Distribution Amount allocable
                           to each such Class.

                                     -112-
<PAGE>

                  (b) On each Distribution Date, the Securities Administrator
         shall distribute the Group II Principal Distribution Amount to the
         Holders of each Class of Group II Certificates, other than the Class
         II-P Certificates and Class II-CE Certificates, in the following order
         and priority:

                  (i)      The Class II-AR-1 Principal Distribution Amount will
                           be distributed as follows:

                           (A) first, to the Holders of the Class II-AR-1
                  Certificates until the Certificate Principal Balance thereof
                  has been reduced to zero; and

                           (B) second, to the Holders of the Class II-AR-2
                  Certificates, after taking into account the distribution of
                  the Class II-AR-2 Principal Distribution Amount as described
                  in clause (b)(ii)(A) immediately below, until the Certificate
                  Principal Balance thereof has been reduced to zero.

                  (ii)     The Class II-AR-2 Principal Distribution Amount will
                           be distributed as follows:

                           (A) first, to the Holders of the Class II-AR-2
                  Certificates until the Certificate Principal Balance thereof
                  has been reduced to zero; and

                           (B) second, to the Holders of the Class II-AR-1
                  Certificates, after taking into account the distribution of
                  the Class II-AR-1 Principal Distribution Amount as described
                  in clause (b)(i)(A) immediately above, until the Certificate
                  Principal Balance thereof has been reduced to zero.

                  (iii)    Holders of the Class II-MR-1 Certificates will be
                           entitled to receive on each Distribution Date, to the
                           extent of the portion of the Group II Principal
                           Distribution Amount remaining after the Group II
                           Senior Principal Distribution Amount has been
                           distributed, the Class II-MR-1 Principal Distribution
                           Amount in reduction of the Certificate Principal
                           Balance thereof, until the Certificate Principal
                           Balance of the Class II-MR-1 Certificates has been
                           reduced to zero.

                  (iv)     Holders of the Class II-MR-2 Certificates will be
                           entitled to receive on each Distribution Date, to the
                           extent of the portion of the Group II Principal
                           Distribution Amount remaining after the sum of the
                           Group II Senior Principal Distribution Amount and the
                           Class II-MR-1 Principal Distribution Amount has been
                           distributed, the Class II-MR-2 Principal Distribution
                           Amount in reduction of the Certificate Principal
                           Balance thereof, until the Certificate Principal
                           Balance of the Class II-MR-2 Certificates has been
                           reduced to zero.

                  (v)      Holders of the Class II-MR-3 Certificates will be
                           entitled to receive on each Distribution Date, to the
                           extent of the portion of the Group II Principal
                           Distribution Amount remaining after the

                                     -113-
<PAGE>

                           sum of the Group II Senior Principal Distribution
                           Amount, the Class II-MR-1 Principal Distribution
                           Amount and the Class II-MR-2 Principal Distribution
                           Amount has been distributed, the Class II-MR-3
                           Principal Distribution Amount in reduction of the
                           Certificate Principal Balance thereof, until the
                           Certificate Principal Balance of the Class II-MR-3
                           Certificates has been reduced to zero.

                  (c) On each Distribution Date, the Securities Administrator
         shall distribute any related Net Monthly Excess Cashflow for such
         Distribution Date in the following order of priority:

                  (i)      to the Holders of the Group II Senior Certificates
                           and Group II Mezzanine Certificates, an amount equal
                           to the related Extra Principal Distribution Amount
                           for such Distribution Date in accordance with clause
                           (d) below;

                  (ii)     to the Holders of the Class II-MR-1 Certificates, in
                           an amount equal to the related Interest Carry Forward
                           Amount for such Distribution Date allocable to such
                           Class of Certificates;

                  (iii)    to the Holders of the Class II-MR-2 Certificates, in
                           an amount equal to the related Interest Carry Forward
                           Amount for such Distribution Date allocable to such
                           Class of Certificates;

                  (iv)     to the Holders of the Class II-MR-3 Certificates, in
                           an amount equal to the related Interest Carry Forward
                           Amount for such Distribution Date allocable to such
                           Class of Certificates;

                  (v)      to the Group II Reserve Fund, an amount equal to the
                           sum of:

                           (A) the amount by which the sum of the Net WAC Rate
                  Carryover Amounts with respect to the Class II-AR-1
                  Certificates exceeds the sum of any amounts received by the
                  Securities Administrator with respect to the Class II-AR-1 Cap
                  Contract; (B) the amount by which the sum of the Net WAC Rate
                  Carryover Amounts with respect to the Class II-AR-2
                  Certificates exceeds the sum of any amounts received by the
                  Securities Administrator with respect to the Class II-AR-2 Cap
                  Contract;

                           (C) the amount by which the sum of the Net WAC Rate
                  Carryover Amounts with respect to the Class II-MR-1
                  Certificates exceeds the sum of any amounts received by the
                  Securities Administrator with respect to the Class II-MR-1 Cap
                  Contract;

                           (D) the amount by which the sum of the Net WAC Rate
                  Carryover Amounts with respect to the Class II-MR-2
                  Certificates exceeds the sum of any amounts received by the
                  Securities Administrator with respect to the Class II-MR-2 Cap
                  Contract;

                                     -114-
<PAGE>

                           (E) the amount by which the sum of the Net WAC Rate
                  Carryover Amounts with respect to the Class II-MR-3
                  Certificates exceeds the sum of any amounts received by the
                  Securities Administrator with respect to the Class II-MR-3 Cap
                  Contract;

                  (vi)     to the Holders of the Class II-MR1, Class II-MR-2 and
                           Class II-MR-3 Certificates, in that order, the
                           Allocated Realized Loss Amount allocable to each such
                           Class of Certificates;

                  (vii)    to the Holders of the Class I-M-1, Class I-M-2 and
                           Class I-M-3 Certificates, in that order, the
                           Allocated Realized Loss Amount allocable to each such
                           Class of Certificates to the extent remaining unpaid
                           from Net Monthly Excess Cashflow relating to the
                           Group I Certificates as described under Section
                           4.1(c);

                  (viii)   to the Holders of the Class II-CE Certificates, the
                           related Interest Distribution Amount and any related
                           Overcollateralization Reduction Amount for such
                           Distribution Date; and

                  (ix)     to the Holders of the Class I/II-R Certificates, any
                           remaining amounts; provided, however, that on the
                           Distribution Date in May 2009 and for each
                           Distribution Date thereafter any such remaining
                           amounts will be distributed first, to the Holders of
                           the Class II-P Certificates, until the Certificate
                           Principal Balance thereof has been reduced to zero;
                           and second, to the Holders of the Class I/II-R
                           Certificates.

         On each Distribution Date, after making the required distributions of
interest and principal to the Group II Senior Certificates and Group II
Mezzanine Certificates as described in Section 4.3(a) and (b) above, and after
the distribution of the related Net Monthly Excess Cashflow with respect to the
Group II Loans as described in Section 4.3(c), the Securities Administrator will
withdraw from the Group II Reserve Fund the amounts on deposit therein and
distribute such amounts to the Group II Senior Certificates and the Group II
Mezzanine Certificates, in respect of any Net WAC Rate Carryover Amounts in the
following manner and order of priority: first, concurrently to the Group II
Senior Certificates, on a pro rata basis, the related Net WAC Rate Carryover
Amount for such Distribution Date for each such Class; second, to the Class
II-MR-1 Certificates, the related Net WAC Rate Carryover Amount for such
Distribution Date for such Class; third, to the Class II-MR-2 Certificates, the
related Net WAC Rate Carryover Amount for such Distribution Date for such Class;
and fourth, to the Class II-MR-3 Certificates, the related Net WAC Rate
Carryover Amount for such Distribution Date for such Class.

                  (d) (i) Prior to the Distribution Date in December 2004, the
         Extra Principal Distribution Amount with respect to the Group II Loans
         on each Distribution Date will be distributed to the Class II-CE
         Certificates.

                  (ii)     On each Distribution Date on and after the
                           Distribution Date in December 2004 (a) prior to the
                           Group II Stepdown Date or (b) on

                                     -115-
<PAGE>

                           which a Group II Trigger Event is in effect, the
                           related Extra Principal Distribution Amount shall be
                           distributed in the following order of priority:

                           (A) first, concurrently to the Holders of Group II
                  Senior Certificates, on a pro rata basis based on the
                  Certificate Principal Balance of each such Class, until the
                  Certificate Principal Balance of each such Class has been
                  reduced to zero;

                           (B) second, to the Holders of the Class II-MR-1
                  Certificates, until the Certificate Principal Balance of the
                  Class II-MR-1 Certificates has been reduced to zero;

                           (C) third, to the Holders of the Class II-MR-2
                  Certificates, until the Certificate Principal Balance of the
                  Class II-MR-2 Certificates has been reduced to zero; and

                           (D) fourth, to the Holders of the Class II-MR-3
                  Certificates, until the Certificate Principal Balance of the
                  Class II-MR-3 Certificates has been reduced to zero.

                  (iii)    On each Distribution Date on and after the
                           Distribution Date in December 2004 (x) on or after
                           the Group II Stepdown Date and (y) on which a Group
                           II Trigger Event is not in effect, distributions of
                           principal to the extent of the related Extra
                           Principal Distribution Amount shall be distributed in
                           the following order of priority:

                           (A) first, concurrently to the Group II Senior
                  Certificates on a pro rata basis based on the related
                  Principal Remittance Amount of each such Class (a) the lesser
                  of (x) the Group II-1 Principal Distribution Amount and (y)
                  the Class II-AR-1 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class II-AR-1 Certificates
                  until the Certificate Principal Balance of the Class II-AR-1
                  Certificates has been reduced to zero and (b) the lesser of
                  (x) the Group II-2 Principal Distribution Amount and (y) the
                  Class II-AR-2 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class II-AR-2 Certificates
                  until the Certificate Principal Balance of the Class II-AR-2
                  Certificates has been reduced to zero;

                           (B) second, the lesser of (x) the excess of (i) the
                  Group II Principal Distribution Amount over (ii) the amount
                  distributed to the Holders of the Group II Senior Certificates
                  under clause (A) immediately above, and (y) the Class II-MR-1
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class II-MR-1 Certificates until the
                  Certificate Principal Balance of the Class II-MR-1
                  Certificates has been reduced to zero;

                                     -116-
<PAGE>

                           (C) third, the lesser of (x) the excess of (i) the
                  Group II Principal Distribution Amount over (ii) the sum of
                  the amounts distributed to the Holders of the Group II Senior
                  Certificates and Class II-MR-1 Certificates under clauses (A)
                  and (B) immediately above, and (y) the Class II-MR-2 Principal
                  Distribution Amount, shall be distributed to the Holders of
                  the Class II-MR-2 Certificates until the Certificate Principal
                  Balance of the Class II-MR-2 Certificates has been reduced to
                  zero; and

                           (D) fourth, the lesser of (x) the excess of (i) the
                  Group II Principal Distribution Amount and (ii) the sum of the
                  amounts distributed to the Holders of the Group II Senior,
                  Class II-MR-1 and Class II-MR-2 Certificates under clauses
                  (A), (B) and (C) immediately above and (y) the Class II-MR-3
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class II-MR-3 Certificates until the
                  Certificate Principal Balance of the Class II-MR-3
                  Certificates has been reduced to zero.

                  (e) On each Distribution Date, the Securities Administrator
         shall withdraw any amounts then on deposit in the related Distribution
         Account that represent Prepayment Charges received on the Group II
         Loans and shall distribute such amounts to the Holders of the Class
         II-P Certificates.

         Section 4.4 ALLOCATION OF REALIZED LOSSES ON THE GROUP II LOANS.

         Prior to each Distribution Date, the Master Servicer, based solely on
the information provided by the related Servicer, shall determine the amount of
Realized Losses, if any, with respect to the Group II Loans.

         Realized Losses on the Group II Loans for any Distribution Date will
first, cause a reduction in the related Net Monthly Excess Cash Flow for that
Distribution Date and second, cause a reduction in the Certificate Principal
Balance of the Class II-CE Certificates for that Distribution Date, until the
Certificate Principal Balance thereof has been reduced to zero. To the extent
that Realized Losses on the Group II Loans on a Distribution Date cause the
aggregate Certificate Principal Balance of the Group II Senior, Group II
Mezzanine, and Class II-P Certificates, after taking into account all
distributions on such Distribution Date to exceed the aggregate Principal
Balance of the Group II Loans as of the last day of the related Due Period, such
excess will be allocated first, to the Class II-MR-3 Certificates; second, to
the Class II-MR-2 Certificates; and third, to the Class II-MR-1 Certificates in
each case to reduce the Certificate Principal Balance thereof until it has been
reduced to zero. In addition, to the extent the related Servicer receives
Subsequent Recoveries with respect to any defaulted Group II Loan, the amount of
the Realized Loss with respect to that defaulted Group II Loan will be reduced
to the extent such Subsequent Recoveries are applied to reduce the Certificate
Principal Balance of any Class of Group II Certificates on any Distribution
Date.

         Any allocation of a Realized Loss on a Group II Loan to a Group II
Mezzanine Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated as of such
Distribution Date after all distributions on such Distribution Date have been
made. Any allocation of Realized Losses on a Group II Loan to a Class II-CE
Certificate shall be made by reducing the amount otherwise payable in respect

                                     -117-
<PAGE>

thereof pursuant to Section 4.3(c)(viii). No allocations of Realized Losses
shall be made to the Group II Senior Certificates or the Class II-P
Certificates. Notwithstanding anything to the contrary in this Agreement, in no
event will the Certificate Principal Balance of any Group II Mezzanine
Certificate be reduced more than once in respect of any particular amount both
(i) allocable to the Group II Mezzanine Certificate in respect of Realized
Losses and (ii) payable as principal to the Holder of such Certificate from the
Net Monthly Excess Cashflow.

         As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.

         In the event that the related Servicer collects any Subsequent Recovery
with respect to a defaulted Group II Loan that is a Liquidated Loan with respect
to which a Realized Loss has been incurred, such Subsequent Recovery will be
distributed as part of the Group II Available Distribution Amount in accordance
with the priorities described under Section 4.3. In addition, the Certificate
Principal Balance of each class of Group II Mezzanine Certificates that has been
reduced by the allocation of a Realized Loss to such Certificate will be
increased, in order of seniority, by the amount of such Subsequent Recovery, but
only to the extent that such Certificate has not been reimbursed for the amount
of such Realized Loss (or a portion thereof) allocated to such Certificate from
Net Monthly Excess Cashflow. Holders of such Certificates will not be entitled
to any payment in respect of current interest on the amount of such increases
for any Interest Accrual Period preceding the Distribution Date on which such
increase occurs.

         The principal portion of all Realized Losses on the Group II Loans
shall be allocated on each Distribution Date to REMIC II Regular Interest
LTII-1, REMIC II Regular Interest LTII-2 and REMIC II Regular Interest LTII-P,
until the Uncertificated Principal Balances have been reduced to zero.

         The REMIC III Group II Marker Allocation Percentage of all Realized
Losses on the REMIC III Regular Interests shall be allocated on each
Distribution Date to the following REMIC III Regular Interests in the specified
percentages, as follows: first, to Uncertificated Accrued Interest payable to
the REMIC III Regular Interest LTIII-2AA and REMIC III Regular Interest
LTIII-2ZZ up to an aggregate amount equal to the REMIC III Group II Interest
Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated
Principal Balances of the REMIC III Regular Interest LTIII-2AA and REMIC III
Regular Interest LTIII-2ZZ up to an aggregate amount equal to the REMIC III
Group II Principal Loss Allocation Amount, 98% and 2%, respectively; third, to
the Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AA,
98%, to REMIC III Regular Interest LTIII-2MR3, 1% and to REMIC III Regular
Interest LTIII-2ZZ, 1%, respectively, until the Uncertificated Principal Balance
of REMIC III Regular Interest LTIII-2MR3 has been reduced to zero; fourth, to
the Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AA,
REMIC III Regular Interest LTIII-2MR2 and REMIC III Regular Interest LTIII-2ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC III Regular Interest LTIII-2MR2 has been reduced to zero; and fifth, to
the Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AA,

                                     -118-
<PAGE>

REMIC III Regular Interest LTIII-2MR1 and REMIC III Regular Interest LTIII-2ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC III Regular Interest LTIII-2MR1 has been reduced to zero.

         The REMIC III Sub WAC Allocation Percentage of all Realized Losses on
the Group II Loans shall be applied after all distributions have been made on
each Distribution Date first, so as to keep the Uncertificated Principal Balance
of each REMIC III Group II Regular Interest ending with the designation "GRP"
equal to 0.01% of the aggregate Stated Principal Balance of the Group II Loans;
second, to each REMIC III Regular Interest ending with the designation "SUB," so
that the Uncertificated Principal Balance of each such REMIC III Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal
Balance of the Group II Loans over (y) the current Certificate Principal Balance
of the Group II Senior Certificates (except that if any such excess is a larger
number than in the preceding distribution period, the least amount of Realized
Losses shall be applied to such REMIC III Regular Interests such that the REMIC
III Subordinated Balance Ratio is maintained); and third, any remaining Realized
Losses on the Group II Loans shall be allocated to REMIC III Regular Interest
LTIII-2XX.

         Section 4.5 DISTRIBUTIONS TO HOLDERS OF THE GROUP III-VII CERTIFICATES.

         On each Distribution Date, the Securities Administrator, to the extent
on deposit therein and based solely upon the Remittance Report for such
Distribution Date, shall withdraw from the related Distribution Account for the
Group III-VII Loans, the Group III-VII Available Distribution Amount for such
Distribution Date and distribute to each related Certificateholder, by wire
transfer in immediately available funds for the account of such
Certificateholder or by any other means of payment acceptable to each related
Certificateholder of record on the immediately preceding Record Date (other than
as provided in Section 9.1 respecting the final distribution) as specified by
each such Certificateholder and at the address of such Holder appearing in the
Certificate Register, from the amount so withdrawn and to the extent of the
related Group III-VII Available Distribution Amount, such Certificateholder's
Percentage Interest of the following amounts and in following order and
priority:

                  (a) On each Distribution Date prior to the Credit Support
         Depletion Date, the Securities Administrator will distribute the Group
         III-VII Available Distribution Amount in the following order and
         priority:

                  (i)      On each Distribution Date, the Group III Available
                           Distribution Amount will be distributed as follows:

                           (A) first, concurrently, to the Class III-AR-1
                  Certificates and the Class A-R Certificates, the related
                  Interest Distribution Amount with respect to each such Class;

                           (B) second, to the Class A-R Certificates from the
                  Group III Available Distribution Amount remaining after
                  payments pursuant to clause (a)(i)(A) above until the
                  Certificate Principal Balance of the Class A-R Certificates
                  has been reduced to zero; and

                                     -119-
<PAGE>

                           (C) third, to the Class III-AR-1 Certificates from
                  the Group III Available Distribution Amount remaining after
                  payments pursuant to clauses (a)(i)(A) and (B) above, the
                  related Senior Principal Distribution Amount until the
                  Certificate Principal Balance of the Class III-AR-1
                  Certificates has been reduced to zero.

                  (ii)     On each Distribution Date, the Group IV Available
                           Distribution Amount will be distributed as follows:

                           (A) first, to the Class IV-AR-1 Certificates, the
                  Interest Distribution Amount with respect to such Class; and

                           (B) second, to the Class IV-AR-1 Certificates from
                  the Group IV Available Distribution Amount remaining after
                  payments pursuant to clause (a)(ii)(A) above, the related
                  Senior Principal Distribution Amount until the Certificate
                  Principal Balance of the Class IV-AR-1 Certificates has been
                  reduced to zero.

                  (iii)    On each Distribution Date, the Group V Available
                           Distribution Amount will be distributed as follows:

                           (A) first, to the Class V-AR-1 Certificates, the
                  Interest Distribution Amount with respect to such Class; and

                           (B) second, to the Class V-AR-1 Certificates from the
                  Group V Available Distribution Amount remaining after payments
                  pursuant to clause (a)(iii)(A) above, the related Senior
                  Principal Distribution Amount until the Certificate Principal
                  Balance of the Class V-AR-1 Certificates has been reduced to
                  zero.

                  (iv)     On each Distribution Date, the Group VI Available
                           Distribution Amount will be distributed as follows:

                           (A) first, to the Class VI-AR-1 Certificates, the
                  Interest Distribution Amount with respect to such Class; and

                           (B) second, to the Class VI-AR-1 Certificates from
                  the Group VI Available Distribution Amount remaining after
                  payments pursuant to clause (a)(iv)(A) above, the related
                  Senior Principal Distribution Amount until the Certificate
                  Principal Balance of the Class VI-AR-1 Certificates has been
                  reduced to zero.

                  (v)      On each Distribution Date, the Group VII-1 Available
                           Distribution Amount will be distributed as follows:

                           (A) first, concurrently to the Class VII-AR-1
                  Certificates and Class VII-AR-3 Certificates, the Interest
                  Distribution Amount with respect to each such Class; provided,
                  however, that for the purpose of distributions to the Class
                  VII-AR-3 Certificates under this clause, only the

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                  portion of the Class VII-AR-3 Notional Amount derived from the
                  Certificate Principal Balance of the Class VII-AR-1
                  Certificates will be used to calculate these distributions;
                  and

                           (B) second, to the Class VII-AR-1 Certificates from
                  the Group VII-1 Available Distribution Amount remaining after
                  payments pursuant to clause (a)(v)(A) above, the related
                  Senior Principal Distribution Amount to the Class VII-AR-1
                  Certificates until the Certificate Principal Balance of the
                  Class VII-AR-1 Certificates has been reduced to zero;

                  (vi)     On each Distribution Date, the Group VII-2 Available
                           Distribution Amount will be distributed as follows:

                           (A) first, concurrently to the Class VII-AR-2
                  Certificates and Class VII-AR-3 Certificates, the Interest
                  Distribution Amount with respect to each such Class; provided,
                  however, that for the purpose of distributions to the Class
                  VII-AR-3 Certificates under this clause, only the portion of
                  the Class VII-AR-3 Notional Amount derived from the
                  Certificate Principal Balance of the Class VII-AR-2
                  Certificates will be used to calculate these distributions;
                  and

                           (B) second, to the Class VII-AR-2 Certificates from
                  the Group VII-2 Available Distribution Amount remaining after
                  payments pursuant to clause (a)(vi)(A) above, the related
                  Senior Principal Distribution Amount to the Class VII-AR-2
                  Certificates until the Certificate Principal Balance of the
                  Class VII-AR-2 Certificates has been reduced to zero;

                  (vii)    From the Group III-VII Available Distribution Amount
                           remaining after payments pursuant to clauses (i)
                           through (vi) above, (a) first, to each Class of Group
                           III-VII Certificates for which there is a Senior
                           Interest Shortfall Amount on such Distribution Date,
                           the related Senior Interest Shortfall Amount and (b)
                           second, to make payments to the Group III-VII Senior
                           Certificates relating to each Undercollateralized
                           Group pro rata to the Undercollateralized Groups
                           based on the amount by which the Certificate
                           Principal Balance of the Group III-VII Senior
                           Certificates in each such Undercollateralized Group
                           exceeds the aggregate Principal Balance of the
                           related Loans.

                  (viii)   From the sum of the remaining Group III-VII Available
                           Distribution Amount, after payments pursuant to
                           clauses (i) through (vii) above, to the Class M, B-1,
                           Class B-2, Class B-3, Class B-4 and Class B-5
                           Certificates, sequentially, in that order, an amount
                           equal to their respective Interest Distribution
                           Amounts for such Distribution Date and their pro rata
                           share, based on the outstanding Certificate Principal
                           Balance of each such Class, of the Subordinate
                           Principal Distribution Amount; provided, however,
                           that on any Distribution Date on which the
                           Subordination Level for

                                     -121-
<PAGE>

                           any Class of Group III-VII Subordinate Certificates
                           is less than the Subordination Level as of the
                           Closing Date, the portion of the Subordinate
                           Principal Prepayment Amount otherwise payable to the
                           Class or Classes of the Group III-VII Subordinate
                           Certificates junior to such Class will be distributed
                           to the most senior Class of Group III-VII Subordinate
                           Certificates for which the Subordination Level is
                           less than such percentage as of the Closing Date, and
                           to the Class or Classes of Group III-VII Subordinate
                           Certificates senior thereto, pro rata based on the
                           Certificate Principal Balance of each such Class.

                  (ix)     To the Group III-VII Senior Certificates, from the
                           Group III-VII Available Distribution Amount remaining
                           after distributions pursuant to clauses (i) through
                           (viii) above, by Pro Rata Allocation, the amount of
                           any unreimbursed losses previously allocated to such
                           Classes of Certificates and then to the Group III-VII
                           Subordinate Certificates, in the order of their
                           seniority, the amount of any unreimbursed losses
                           previously allocated to such Classes of Certificates.

                  (x)      To the Class A-R Certificates, the remainder (which
                           is expected to be zero), if any, of the Group III-VII
                           Available Distribution Amount remaining after
                           distributions pursuant to clauses (i) through (ix)
                           above.

                  (b) On each Distribution Date on or after the Credit Support
         Depletion Date, to the extent of the related Group III-VII Available
         Distribution Amount on such Distribution Date, distributions will be
         made to the Group III-VII Senior Certificates in the following order of
         priority:

                  (i)      first, (A) to the Class III-AR-1 Certificates from
                           the Group III Available Distribution Amount, the
                           related Interest Distribution Amount to the extent of
                           amounts available, (B) to the Class IV-AR-1
                           Certificates from the Group IV Available Distribution
                           Amount, the related Interest Distribution Amount to
                           the extent of amounts available, (C) to the Class
                           V-AR-1 Certificates from the Group V Available
                           Distribution Amount, the related Interest
                           Distribution Amount to the extent of amounts
                           available, (D) to the Class VI-AR-1 Certificates from
                           the Group VI Available Distribution Amount, the
                           related Interest Distribution Amount to the extent of
                           amounts available, (E) concurrently to the Class
                           VII-AR-1 Certificates and Class VII-AR-3 Certificates
                           from the Group VII-1 Available Distribution Amount,
                           the related Interest Distribution Amount to the
                           extent of amounts available; provided, however, that
                           for the purpose of distributions to the Class
                           VII-AR-3 Certificates under this clause, only the
                           portion of the Class VII-AR-3 Notional Amount derived
                           from the Certificate Principal Balance of the Class
                           VII-AR-1 Certificates will be used to

                                     -122-
<PAGE>

                           calculate these distributions; and (F) concurrently
                           to the Class VII-AR-2 Certificates and Class VII-AR-3
                           Certificates from the Group VII-2 Available
                           Distribution Amount, the related Interest
                           Distribution Amount to the extent of amounts
                           available; provided, however, that for the purpose of
                           distributions to the Class VII-AR-3 Certificates
                           under this clause, only the portion of the Class
                           VII-AR-3 Notional Amount derived from the Certificate
                           Principal Balance of the Class VII-AR-2 Certificates
                           will be used to calculate these distributions;

                  (ii)     second, (A) to the Class III-AR-1 Certificates, the
                           Group III Available Distribution Amount remaining
                           after payments pursuant to clause (i)(A) above, (B)
                           to the Group IV-AR-1 Certificates, the Group IV
                           Available Distribution Amount remaining after
                           payments pursuant to clause (i)(B) above, (C) to the
                           Class V-AR-1 Certificates, the Group V Available
                           Distribution Amount remaining after payments pursuant
                           to clause (i)(C) above, (D) to the Class VI-AR-1
                           Certificates, the Group VI Available Distribution
                           Amount remaining after payments pursuant to clause
                           (i)(D) above, (E) to the Class VII-AR-1 Certificates,
                           the Group VII-1 Available Distribution Amount
                           remaining after payments pursuant to clause (i)(E)
                           above and (F) to the Class VII-AR-2 Certificates, the
                           Group VII-2 Available Distribution Amount remaining
                           after payments pursuant to clause (i)(F) above, in
                           each case until the Certificate Principal Balance of
                           each such Class has been reduced to zero;

                  (iii)    third, from the related Group III-VII Available
                           Distribution Amount remaining after payments pursuant
                           to clauses (i) and (ii) above, to each class of Group
                           III-VII Certificates for which a Senior Interest
                           Shortfall Amount exists, the Senior Interest
                           Shortfall Amount for such Distribution Date;

                  (iv)     fourth, from the related Group III-VII Available
                           Distribution Amount remaining after payments pursuant
                           to clauses (i) through (iii) above, to each class of
                           Group III-VII Senior Certificates, the amount of any
                           unreimbursed losses previously allocated to each
                           class; and

                  (v)      fifth, to the Class A-R Certificates, the remainder,
                           if any (which is expected to be zero), of the Group
                           III-VII Available Distribution Amount remaining after
                           distributions pursuant to clauses (i) through (iv)
                           above.

                  (c) On each Distribution Date after making distributions
         pursuant to Sections 4.5(a) and (b), the Securities Administrator will
         withdraw from the Group VII Reserve Fund the amounts on deposit therein
         and distribute such amounts to the Class VII-AR-1 Certificates and
         Class VII-AR-2 Certificates in respect of any payments

                                     -123-
<PAGE>

         received under the Class VII-AR-1 Cap Contract and Class VII-AR-2 Cap
         Contract, in each case up to an amount equal to the Net WAC Rate
         Carryover Amounts payable to the Class VII-AR-1 Certificates and Class
         VII AR-2 Certificates.

                  (d) If on any Distribution Date there is an
         Undercollateralized Group, then the following will occur:

                  (i)      the related Group III-VII Available Distribution
                           Amount of the Overcollateralized Group will be
                           reduced, after distributions of interest to the Group
                           III-VII Senior Certificates related to such
                           Overcollateralized Group, by an amount equal to one
                           month's interest on the Transfer Payment Received by
                           the Undercollateralized Group at the weighted average
                           Net Mortgage Rate of the Loans in such
                           Undercollateralized Group and that amount will be
                           added to the related Group III-VII Available
                           Distribution Amount of the Undercollateralized Group;
                           and

                  (ii)     the portion of the related Group III-VII Available
                           Distribution Amount in respect of principal on the
                           Loans in the Overcollateralized Group, after
                           distributions of principal to the Group III-VII
                           Senior Certificates of the Overcollateralized Group,
                           will be distributed, to the extent of the portion of
                           the Available Distribution Amount available therefor,
                           to the Group III-VII Senior Certificates of the
                           Undercollateralized Group until the Certificate
                           Principal Balance of the Group III-VII Senior
                           Certificates of the Undercollateralized Group equals
                           the aggregate Principal Balance of the Loans in the
                           related Loan Group.

         Consequently, the Group III-VII Subordinate Certificates will not
receive any distributions of principal until each Undercollateralized Group is
no longer undercollateralized.

         All or a portion of the distributions to the Group III-VII Senior
Certificates pursuant to the transfer payment provisions described above may be
made on the Distribution Date in the month following the month during which such
Transfer Payment occurs (without any additional distribution of interest or
earnings thereon with respect to such delay).

         Section 4.6 ALLOCATION OF REALIZED LOSSES ON THE GROUP III-VII LOANS.

                  (a) Prior to each Distribution Date, the Master Servicer,
based solely on the information provided by each related Servicer, shall
determine the amount of Realized Losses on the Group III-VII Loans, if any.

                  (b) Realized Losses on the Group III-VII Loans, other than
Excess Losses, shall be allocated as follows: (i) first, to the Junior
Subordinate Certificates, in the reverse order of their numerical Class
designation, according to their respective Certificate Principal Balances until
the Certificate Principal Balances thereof have been reduced to zero, (ii)
second, to the Class B-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero, (iii) third, to the Class B-1 Certificates,
until the Certificate Principal Balance thereof has been

                                     -124-
<PAGE>

reduced to zero, (iv) fourth, to the Class M Certificates, until the Certificate
Principal Balance thereof has been reduced to zero, and (v) fifth, to the Group
III-VII Senior Certificates (other than the Class VII-AR-3 Certificates) related
to the Loan Group for which such Realized Losses were incurred, by Pro Rata
Allocation within such Loan Group, until the Certificate Principal Balances
thereof have been reduced to zero.

                  (c) Excess Losses with respect to the Group III-VII Loans will
be allocated to the outstanding Class or Classes of Group III-VII Senior
Certificates of the related Loan Group and to the Group III-VII Subordinate
Certificates by Pro Rata Allocation.

                  (d) On each Distribution Date, if the aggregate Certificate
Principal Balance of all Group III-VII Certificates exceeds the aggregate
Principal Balance of the Group III-VII Loans (after giving effect to
distributions of principal and the allocation and reimbursement of all losses on
the related Certificates on such Distribution Date), such excess will be deemed
a principal loss and will be allocated to the Group III-VII Subordinate
Certificates in reverse order of seniority until the Certificate Principal
Balance of each such Class has been reduced to zero. If the Certificate
Principal Balance of each Group III-VII Subordinate Certificate has been reduced
to zero and the aggregate Certificate Principal Balance of all outstanding
Classes of Group III-VII Senior Certificates exceeds the aggregate Principal
Balance of the Group III-VII Loans (after giving effect to distributions of
principal and the allocation and reimbursement of all losses on Group III-VII
Certificates on such Distribution Date), such excess will be deemed a principal
loss and will be allocated to the Group III-VII Senior Certificates of the
related Loan Group by Pro Rata Allocation.

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

                  (f) Realized Losses on the Group III-VII Loans shall be
applied after all distributions have been made on each Distribution Date to the
REMIC VI Regular Interests in the same manner and priority as such Realized
Losses are allocated to the Corresponding Certificates.

                  Section 4.7 EFFECT OF DISTRIBUTIONS AND REALIZED LOSSES; FINAL
DISTRIBUTIONS ON CERTIFICATES.

                  (a) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal or allocations of Realized
Losses made on any Distribution Date shall be binding upon all Holders of such
Certificate and of any Certificate issued upon the

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<PAGE>

registration of transfer or exchange therefor or in lieu thereof, whether or not
such distribution is noted on such Certificate. The final distribution of
principal of each Certificate (and the final distribution with respect to the
related Residual Certificate upon termination of the Trust Fund) shall be
payable in the manner provided in Sections 4.1, 4.3 and 4.5, as applicable, only
upon presentation and surrender thereof on or after the Distribution Date
therefor at the office or agency of the Securities Administrator specified in
the notice delivered pursuant to Section 4.7(b) or Section 9.1.

                  (b) Whenever, on the basis of Curtailments, Payoffs and
Monthly Payments on the Group I Loans, Group II Loans or Group III-VII Loans, as
applicable, and related Insurance Proceeds and Liquidation Proceeds received and
expected to be received during the applicable Prepayment Period, the Securities
Administrator believes that the entire remaining unpaid Certificate Principal
Balance of any Class of Certificates shall become distributable on the next
Distribution Date, the Securities Administrator shall, no later than the
Determination Date of the month of such Distribution Date, mail or cause to be
mailed to each Person in whose name a Certificate to be so retired is registered
at the close of business on the Record Date, to the Underwriter and to each
Rating Agency a notice to the effect that:

                  (i) it is expected that funds sufficient to make such final
         distribution shall be available in the related Distribution Account on
         such Distribution Date, and

                  (ii) if such funds are available, (A) such final distribution
         shall be payable on such Distribution Date, but only upon presentation
         and surrender of such Certificate at the office or agency of the
         Securities Administrator maintained for such purpose (the address of
         which shall be set forth in such notice), and (B) no interest shall
         accrue on such Certificate after such Distribution Date.

         Section 4.8 STATEMENTS TO CERTIFICATEHOLDERS.

                  (a) On each Distribution Date, the Securities Administrator
shall provide or make available, upon request to each Holder of a Group I
Certificate, and the Credit Risk Manager, a statement (each, a "Remittance
Report") as to the distributions made on such Distribution Date setting forth:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of the Group I Certificates of each Class allocable
         to principal and the amount of the distribution made on such
         Distribution Date to the Holders of the Class I-P Certificates
         allocable to Prepayment Charges;

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of the Group I Certificates of each Class allocable
         to interest;

                  (iii) The aggregate Servicing Fee received by each related
         Servicer during the related Due Period with respect to the Group I
         Loans;

                  (iv) The number and aggregate Principal Balance of the Group I
         Loans delinquent 31-60 days, 61-90 days or 91 or more days;

                                     -126-
<PAGE>

                  (v) The (A) number and aggregate Principal Balance of Group I
         Loans with respect to which foreclosure proceedings have been
         initiated, and (B) number and aggregate Principal Balance of Mortgaged
         Properties related to the Group I Loans acquired through foreclosure,
         deed in lieu of foreclosure or other exercise of rights respecting the
         Trustee's security interest in the Group I Loans;

                  (vi) The aggregate Principal Balance of the Group I Loans as
         of the close of business on the last day of the related Prepayment
         Period;

                  (vii) The aggregate amount of Principal Prepayments on the
         Group I Loans made during the related Prepayment Period and the
         aggregate amount of any Prepayment Charges received in respect thereof;

                  (viii) The amount of Realized Losses with respect to the Group
         I Loans allocable to the Group I Certificates on the related
         Distribution Date and the cumulative amount of Realized Losses incurred
         on the Group I Loans and allocated to the Group I Certificates since
         the Cut-Off Date;

                  (ix) The amount of interest accrued but not paid to each Class
         of Group I Certificates entitled to interest since (a) the prior
         Distribution Date and (b) the Closing Date;

                  (x) The amount of funds advanced related to the Group I Loans
         by the related Servicers and the Master Servicer for such Distribution
         Date;

                  (xi) The total amount of Payoffs and Curtailments related to
         the Group I Loans received during the related Prepayment Period;

                  (xii) With respect to any Group I Loan that became an REO
         Property during the preceding calendar month, the loan number of such
         Group I Loan, the unpaid principal balance and the Scheduled Principal
         Balance of such Group I Loan;

                  (xiii) To the extent provided by the related Servicer, the
         book value of any Group I REO Property as of the close of business on
         the last Business Day of the calendar month preceding the Distribution
         Date;

                  (xiv) The aggregate amount of extraordinary Trust Fund
         expenses withdrawn from the Distribution Account related to the Group I
         Loans for such Distribution Date;

                  (xv) The Certificate Principal Balance of each Class of Group
         I Certificates, after giving effect to the distributions and
         allocations of Realized Losses on the Group I Loans made on such
         Distribution Date, separately identifying any reduction thereof due to
         allocations of Realized Losses on the Group I Loans;

                  (xvi) The aggregate amount of any Prepayment Interest
         Shortfalls and Curtailment Shortfalls related to the Group I Loans for
         such Distribution Date, to the extent not covered by payments by the
         Master Servicer pursuant to Section 3.20;

                                     -127-
<PAGE>

                  (xvii) The aggregate amount of Relief Act Interest Shortfalls
         related to the Group I Loans for such Distribution Date;

                  (xviii) The Group I Required Overcollateralization Amount and
         the Group I Credit Enhancement Percentage for such Distribution Date;

                  (xix) The Overcollateralization Increase Amount related to the
         Group I Certificates, if any, for such Distribution Date;

                  (xx) The Overcollateralization Reduction Amount related to the
         Group I Certificates, if any, for such Distribution Date;

                  (xxi) The Net WAC Rate Carryover Amount, if any, for such
         Distribution Date;

                  (xxii) The Net WAC Rate Carryover Amount, if any, outstanding
         after reimbursements therefor on such Distribution Date and any amounts
         received under the Class I-A-1 Cap Contract;

                  (xxiii) The respective Pass-Through Rates applicable to each
         Class of Group I Certificates for such Distribution Date;

                  (xxiv) The amount of any deposit to the Group I Reserve Fund
         contemplated by Section 3.25;

                  (xxv) The balance of the Group I Reserve Fund prior to the
         deposit or withdrawal of any amounts on such Distribution Date;

                  (xxvi) The amount of any withdrawal from the Group I Reserve
         Fund pursuant to the last paragraph of Section 4.1(c); and

                  (xxvii) The balance of the Group I Reserve Fund after all
         deposits and withdrawals on such Distribution Date.

                  (b) On each Distribution Date, the Securities Administrator
shall provide or make available, upon request to each Holder of a Group II
Certificate and the Credit Risk Manager, a statement (each, a "Remittance
Report") as to the distributions made on such Distribution Date setting forth:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of the Group II Certificates of each Class
         allocable to principal and the amount of the distribution made on such
         Distribution Date to the Holders of the Class II-P Certificates
         allocable to Prepayment Charges;

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of the Group II Certificates of each Class
         allocable to interest;

                  (iii) The aggregate Servicing Fee received by each related
         Servicer during the related Due Period;

                                     -128-
<PAGE>

                  (iv) The number and aggregate Principal Balance of the Group
         II Loans delinquent 31-60 days, 61-90 days or 91 or more days;

                  (v) The (A) number and aggregate Principal Balance of Group II
         Loans with respect to which foreclosure proceedings have been
         initiated, and (B) number and aggregate Principal Balance of Mortgaged
         Properties related to the Group II Loans acquired through foreclosure,
         deed in lieu of foreclosure or other exercise of rights respecting the
         Trustee's security interest in the Group II Loans;

                  (vi) The aggregate Principal Balance of the Group II Loans as
         of the close of business on the last day of the related Prepayment
         Period;

                  (vii) The aggregate amount of Principal Prepayments on the
         Group II Loans made during the related Prepayment Period and the
         aggregate amount of any Prepayment Charges received in respect thereof;

                  (viii) The amount of Realized Losses with respect to the Group
         II Loans allocable to the Group II Certificates on the related
         Distribution Date and the cumulative amount of Realized Losses incurred
         on the Group II Loans and allocated to the Group II Certificates since
         the Cut-Off Date;

                  (ix) The amount of interest accrued but not paid to each Class
         of Group II Certificates entitled to interest since (a) the prior
         Distribution Date and (b) the Closing Date; (x) The amount of funds
         advanced related to the Group II Loans by the related Servicers and the
         Master Servicer for such Distribution Date;

                  (xi) The total amount of Payoffs and Curtailments related to
         the Group II Loans received during the related Prepayment Period;

                  (xii) With respect to any Group II Loan that became an REO
         Property during the preceding calendar month, the loan number of such
         Group II Loan, the unpaid principal balance and the Scheduled Principal
         Balance of such Group II Loan;

                  (xiii) To the extent provided by the related Servicer, the
         book value of any Group II REO Property as of the close of business on
         the last Business Day of the calendar month preceding the Distribution
         Date;

                  (xiv) The aggregate amount of extraordinary Trust Fund
         expenses withdrawn from the Distribution Account related to the Group
         II Loans for such Distribution Date;

                  (xv) The Certificate Principal Balance of each Class of Group
         II Certificates, after giving effect to the distributions and
         allocations of Realized Losses on the Group II Loans made on such
         Distribution Date, separately identifying any reduction thereof due to
         allocations of Realized Losses on the Group II Loans;

                                     -129-
<PAGE>

                  (xvi) The aggregate amount of any Prepayment Interest
         Shortfalls and Curtailment Shortfalls related to the Group II Loans for
         such Distribution Date, to the extent not covered by payments by the
         Master Servicer pursuant to Section 3.20;

                  (xvii) The aggregate amount of Relief Act Interest Shortfalls
         related to the Group II Loans for such Distribution Date.

                  (xviii) The Group II Required Overcollateralization Amount and
         the Group II Credit Enhancement Percentage for such Distribution Date;

                  (xix) The Overcollateralization Increase Amount related to the
         Group II Certificates, if any, for such Distribution Date;

                  (xx) The Overcollateralization Reduction Amount related to the
         Group II Certificates, if any, for such Distribution Date;

                  (xxi) The Net WAC Rate Carryover Amount, if any, for such
         Distribution Date;

                  (xxii) The Net WAC Rate Carryover Amount, if any, outstanding
         after reimbursements therefor on such Distribution Date and any amounts
         received under the Cap Contracts (other than the Class I-A-1 Cap
         Contract, VII-AR-1 Cap Contract and VII-AR-2 Cap Contract);

                  (xxiii) The respective Pass-Through Rates applicable to each
         Class of Group II Certificates for such Distribution Date;

                  (xxiv) The amount of any deposit to the Group II Reserve Fund
         contemplated by Section 3.25;

                  (xxv) The balance of the Group II Reserve Fund prior to the
         deposit or withdrawal of any amounts on such Distribution Date;

                  (xxvi) The amount of any withdrawal from the Group II Reserve
         Fund pursuant to the last paragraph of Section 4.3(c); and

                  (xxvii) The balance of the Group II Reserve Fund after all
         deposits and withdrawals on such Distribution Date.

                  (c) On each Distribution Date, the Securities Administrator
shall provide or make available, upon request to each Holder of a Group III-VII
Certificate, a statement (each, a "Remittance Report") as to the distributions
made on such Distribution Date setting forth:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of the Group III-VII Certificates of each Class
         allocable to principal;

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of the Group III-VII Certificates of each Class
         allocable to interest;

                                     -130-
<PAGE>

                  (iii) the aggregate Servicing Fee received by the each related
         Servicer during the related Due Period;

                  (iv) the number and aggregate Principal Balance of the Group
         III-VII Loans delinquent 31-60 days, 61-90 days or 91 or more days;

                  (v) the (A) number and aggregate Principal Balance of Group
         III-VII Loans with respect to which foreclosure proceedings have been
         initiated, and (B) number and aggregate Principal Balance of Mortgaged
         Properties related to the Group III-VII Loans acquired through
         foreclosure, deed in lieu of foreclosure or other exercise of rights
         respecting the Trustee's security interest in the Group III-VII Loans;

                  (vi) the aggregate Principal Balance of the Group III-VII
         Loans as of the close of business on the last day of the related
         Prepayment Period;

                  (vii) the aggregate amount of Principal Prepayments on the
         Group III-VII Loans made during the related Prepayment Period and the
         aggregate amount of any Prepayment Charges received in respect thereof;

                  (viii) the amount of Realized Losses with respect to the Group
         III-VII Loans allocable to the Group III-VII Certificates on the
         related Distribution Date and the cumulative amount of Realized Losses
         incurred on the Group III-VII Loans and allocated to the Group III-VII
         Certificates since the Cut-Off Date;

                  (ix) the amount of interest accrued but not paid to each Class
         of Group III-VII Certificates entitled to interest since (a) the prior
         Distribution Date and (b) the Closing Date;

                  (x) the amount of funds advanced related to the Group III-VII
         Loans by the related Servicers and the Master Servicer for such
         Distribution Date;

                  (xi) the total amount of Payoffs and Curtailments related to
         the Group III-VII Loans received during the related Prepayment Period;

                  (xii) with respect to any Group III-VII Loan that became an
         REO Property during the preceding calendar month, the loan number of
         such Group III-VII Loan, the unpaid principal balance and the Scheduled
         Principal Balance of such Group III-VII Loan;

                  (xiii) to the extent provided by the related Servicer, the
         book value of any Group III-VII REO Property as of the close of
         business on the last Business Day of the calendar month preceding the
         Distribution Date;

                  (xiv) the aggregate amount of extraordinary Trust Fund
         expenses withdrawn from the Distribution Account related to the Group
         III-VII Loans for such Distribution Date;

                  (xv) the Certificate Principal Balance of each Class of Group
         III-VII Certificates, after giving effect to the distributions and
         allocations of Realized Losses on

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         the Group III-VII Loans made on such Distribution Date, separately
         identifying any reduction thereof due to allocations of Realized Losses
         on the Group III-VII Loans;

                  (xvi) the aggregate amount of any Prepayment Interest
         Shortfalls and Curtailment Shortfalls related to the Group III-VII
         Loans for such Distribution Date, to the extent not covered by payments
         by the Master Servicer pursuant to Section 3.20;

                  (xvii) the aggregate amount of Relief Act Interest Shortfalls
         related to the Group III-VII Loans for such Distribution Date.

                  (xviii) the respective Pass-Through Rates applicable to each
         Class of Group III-VII Certificates for such Distribution Date;

                  (xix) the amount of Special Hazard Coverage available to the
         Group III-VII Senior Certificates remaining as of the close of business
         on the applicable Determination Date;

                  (xx) the amount of Bankruptcy Coverage available to the Group
         III-VII Senior Certificates remaining as of the close of business on
         the applicable Determination Date;

                  (xxi) the amount of Fraud Coverage available to the Group
         III-VII Senior Certificates remaining as of the close of business on
         the applicable Determination Date;

                  (xxii) the amount of any deposit to the Group VII Reserve Fund
         contemplated by Section 3.25;

                  (xxiii) the balance of the Group VII Reserve Fund prior to the
         deposit or withdrawal of any amounts on such Distribution Date;

                  (xxiv) the amount of any withdrawal from the Group VII Reserve
         Fund pursuant to Section 4.5(c); and

                  (xxv) the balance of the Group VII Reserve Fund after all
         deposits and withdrawals on such Distribution Date.

                  (d) The Securities Administrator shall make such statements
(and, at its option, any additional files containing the same information in an
alternative format) in one report available each month to the
Certificateholders, the Trustee and the Rating Agencies via the Securities
Administrator's internet website. The Securities Administrator's internet
website shall initially be located at http:\\www.ctslink.com and assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at 1-301-815-6600. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Securities Administrator shall have the right to change the way such statements
are distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Securities Administrator shall provide
timely and adequate notification to all above parties regarding any such
changes.

                                     -132-
<PAGE>

         In the case of information furnished pursuant to subclauses (a)(i),
(b)(i), (c)(i), (a)(ii), (b)(ii) and (c)(ii) above, the amounts shall be
expressed as a dollar amount per single Certificate of the relevant Class.

         Within a reasonable period of time after the end of each calendar year,
the Securities Administrator shall furnish to each Person who at any time during
the calendar year was a Holder of a Regular Interest Certificate a statement
containing the information set forth in subclauses (a)(i), (b)(i), (c)(i),
(a)(ii), (b)(ii) and (c)(ii) above, aggregated for such calendar year or
applicable portion thereof during which such person was a Certificateholder.
Such obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Securities Administrator pursuant to any requirements of the
Code as from time to time are in force.

         Within a reasonable period of time after the end of each calendar year,
the Securities Administrator shall furnish to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.

         The Securities Administrator shall, upon request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide.

         On each Distribution Date the Securities Administrator shall provide
Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each
Class of Certificates as of such Distribution Date, using a format and media
mutually acceptable to the Securities Administrator and Bloomberg.

         Section 4.9 ADVANCES.

         If the Monthly Payment on a Loan or a portion thereof is delinquent as
of its Due Date, other than as a result of interest shortfalls due to bankruptcy
proceedings or application of the Relief Act, and the related Servicer fails to
make an advance of the delinquent amount pursuant to the related Servicing
Agreement, the Master Servicer shall deposit in the related Distribution
Account, from its own funds or from amounts on deposit in such Distribution
Account that are held for future distribution, not later than the related
Distribution Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such delinquency, net of the Servicing Fee for such Loan
except to the extent the Master Servicer determines any such advance to be
nonrecoverable from Liquidation Proceeds, Insurance Proceeds or future payments
on the Loan for which such Advance was made. Any amounts held for future
distribution and so used shall be appropriately reflected in the Master
Servicer's records and replaced by the Master Servicer by deposit in the related
Distribution Account on or before any future Distribution Account Deposit Date
to the extent that the related Available Distribution Amount for the related
Distribution Date (determined without regard to Advances to be made on the
related Distribution Account Deposit Date) shall be less than the total amount
that would be distributed to the Classes

                                     -133-
<PAGE>

of Certificateholders of Group I Certificates pursuant to Section 4.1, Group II
Certificates pursuant to Section 4.3, or Group III-VII Certificates pursuant to
Section 4.5 as applicable, on such Distribution Date if such amounts held for
future distributions had not been so used to make Advances. Subject to the
foregoing, the Master Servicer shall continue to make such Advances through the
date that the related Servicer is required to do so under its Servicing
Agreement. In the event the Master Servicer elects not to make an Advance
because the Master Servicer deems such Advance nonrecoverable pursuant to this
Section 4.9, on the Distribution Account Deposit Date, the Master Servicer shall
present an Officer's Certificate to the Trustee (i) stating that the Master
Servicer elects not to make an Advance in a stated amount and (ii) detailing the
reason it deems the advance to be nonrecoverable.

         Section 4.10 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.

         Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount that the Trustee and the Securities Administrator reasonably
believe are applicable under the Code. The consent of Certificateholders shall
not be required for such withholding. In the event the Securities Administrator
does withhold any amount from interest or original issue discount payments or
advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Securities Administrator shall indicate the amount withheld to
such Certificateholders.

         Section 4.11 REMIC DISTRIBUTIONS.

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

                  (i) first, to the Holders of REMIC I Regular Interest
         LTI-IO-1, REMIC I Regular Interest LTI-IO-2, REMIC I Regular Interest
         LTI-IO-3, REMIC I Regular Interest LTI-IO-4, REMIC I Regular Interest
         LTI-IO-5, REMIC I Regular Interest LTI-IO-6, REMIC I Regular Interest
         LTI-IO-7 and REMIC I Regular Interest LTI-IO-8, 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 and second, to the Holders of REMIC I Regular
         Interest LTI-1 and REMIC I Regular Interest LTI-P, 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;

                  (ii) to the Holders of the REMIC I Regular Interest LTI-P, on
         the Distribution Date immediately following the expiration of the
         latest Prepayment Change term in respect of a Group I Loan as
         identified on the Loan Schedule or any Distribution Date thereafter
         until $100 has been distributed pursuant to this clause;

                  (iii) on each Distribution Date, the remainder of the Group I
         Available Distribution Amount for such Distribution Date after the
         distributions made pursuant to

                                     -134-
<PAGE>

         clause (i) and clause (ii) above, first, to the Holders of REMIC I
         Regular Interest LTI-1 until the Uncertificated Principal Balance of
         such REMIC I Regular Interest is reduced to zero, and second,
         sequentially to the Holders of REMIC I Regular Interest LTI-IO-1, REMIC
         I Regular Interest LTI-IO-2, REMIC I Regular Interest LTI-IO-3, REMIC I
         Regular Interest LTI-IO-4, REMIC I Regular Interest LTI-IO-5, REMIC I
         Regular Interest LTI-IO-6, REMIC I Regular Interest LTI-IO-7 and REMIC
         I Regular Interest LTI-IO-8, until the Uncertificated Principal Balance
         of each such REMIC I Regular Interest is reduced to zero; and

                  (iv) to the Holders of the Class I/II-R Certificates (in
         respect of Component R-1), any amounts remaining after the
         distributions pursuant to clauses (i) through (iii) above.

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

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

                  (i) first, to the Holders of REMIC III Regular Interest
         LTIII-IO-A and REMIC Regular Interest LTIII-IO-B, in an amount equal to
         (A) the Uncertificated Accrued Interest for such REMIC III Regular
         Interest for such Distribution Date, plus (B) any amounts in respect
         thereof remaining unpaid from previous Distribution Dates and then to
         Holders of REMIC III Regular Interest LTIII-1AA, REMIC III Regular
         Interest LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
         Regular Interest LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC
         III Regular Interest LTIII-1A5, REMIC III Regular Interest LTIII-1A6,
         REMIC III Regular Interest LTIII-1M1, REMIC III Regular Interest
         LTIII-1M2, REMIC III Regular Interest LTIII-1M3, REMIC III Regular
         Interest LTIII-1ZZ and REMIC III Regular Interest LTIII-1P, pro rata,
         in an amount equal to (A) the Uncertificated Accrued Interest for each
         such REMIC III Group I Regular 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 III Regular Interest LTIII-1ZZ shall be reduced and
         deferred when the REMIC III Group I Overcollateralization Amount is
         less than the REMIC III Group I Overcollateralization Target Amount, by
         the lesser of (x) the amount of such difference and (y) the REMIC III
         Group I Regular Interest LTIII-1ZZ Maximum Interest Deferral Amount and
         such amount will be payable to the Holders of REMIC III Regular
         Interest LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
         Regular Interest LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC
         III Regular Interest LTIII-1A5, REMIC III Regular Interest LTIII-1A6,
         REMIC III Regular Interest LTIII-1M1, REMIC III Regular Interest
         LTIII-1M2 and REMIC III Regular Interest LTIII-1M3 in the same
         proportion as the related

                                     -135-
<PAGE>

         Overcollateralization Increase Amount is allocated to the Corresponding
         Certificates, provided, however, that the Uncertificated Principal
         Balance of REMIC III Regular Interest LTIII-1ZZ is increased by such
         amount;

                  (ii) second, to the Holders of REMIC III Group I Regular
         Interests, in an amount equal to the remainder of the Group I Available
         Distribution Amount for such Distribution Date after the distributions
         made pursuant to clause (i) above, allocated as follows:

                            (a) to the Holders of REMIC III Regular Interest
                    LTIII-1AA and REMIC III Regular Interest LTIII-1P, 98.00% of
                    such remainder (other than amounts payable under clause (d)
                    below), until the Uncertificated Principal Balance of such
                    REMIC III Regular Interest is reduced to zero, provided,
                    however, that the Uncertificated Principal Balance of REMIC
                    III Regular Interest LTIII-1P shall not be reduced until the
                    Distribution Date in May 2009 or any Distribution Date
                    thereafter, at which point such amount shall be distributed
                    to REMIC III Regular Interest LTIII-1P, until $100 has been
                    distributed pursuant to this clause;

                            (b) to the Holders of REMIC III Regular Interest
                    LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
                    Regular Interest LTIII-1A3, REMIC III Regular Interest
                    LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC III
                    Regular Interest LTIII-1A6, REMIC III Regular Interest
                    LTIII-1M1, REMIC III Regular Interest LTIII-1M2 and REMIC
                    III Regular Interest LTIII-1M3, 1.00% of such remainder
                    (other than amounts payable under clause (iii) below), in
                    the same proportion as principal payments are allocated to
                    the Corresponding Certificates, until the Uncertificated
                    Principal Balances of such REMIC III Regular Interests are
                    reduced to zero;

                            (c) to the Holders of REMIC III Regular Interest
                    LTIII-1ZZ, 1.00% of such remainder (other than amounts
                    payable under the proviso below), until the Uncertificated
                    Principal Balance of such REMIC III Regular Interest is
                    reduced to zero; then

                            (d) any remaining amount to the Holders of the Class
                    I/II-R Certificates (in respect of Component R-3); and

                  (iii) third, to REMIC III Regular Interest LTIII-1P, 100% of
         the amount paid in respect of REMIC I Regular Interest LTI-P;

         provided, however, that (i) 98.00% and (ii) 2.00% of any principal
payments that are attributable to a related Overcollateralization Reduction
Amount shall be allocated to Holders of (i) REMIC III Regular Interest LTIII-1AA
and REMIC III Regular Interest LTIII-1P, in that order and (ii) REMIC III
Regular Interest LTIII-1ZZ, respectively; provided that REMIC III Regular
Interest LTIII-1P shall not be reduced until the Distribution Date in May 2009,
at which point such amount shall be distributed to REMIC III Regular Interest
LTIII-1P, until $100 has been distributed pursuant to this clause.

                                     -136-
<PAGE>

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

                  (i) first, to the Holders of REMIC II Regular Interest LTII-1,
         REMIC II Regular Interest LTII-2 and REMIC I Regular Interest LTII-P,
         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;

                  (ii) to the Holders of the REMIC II Regular Interest LTII-P,
         on the Distribution Date immediately following the expiration of the
         latest Prepayment Change term in respect of a Group II Loan as
         identified on the Loan Schedule or any Distribution Date thereafter
         until $100 has been distributed pursuant to this clause;

                  (iii) to the extent of amounts remaining after the
         distributions made pursuant to clause (i) and (ii) above, to the Holder
         of REMIC I Regular Interest LTII-1 and REMIC II Regular Interest
         LTII-2, until the Uncertificated Principal Balances of such REMIC II
         Regular Interests are reduced to zero; and

                  (iv) to the Holders of the Class I/II-R Certificates (in
         respect of Component R-2), any amounts remaining after the
         distributions pursuant to clauses (i) through (iii) above.

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

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

                  (i) first, to Holders of REMIC III Regular Interest LTIII-2AA,
         REMIC III Regular Interest LTIII-2AR1, REMIC III Regular Interest
         LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1, REMIC III Regular
         Interest LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3, REMIC III
         Regular Interest LTIII-2ZZ and REMIC III Regular Interest LTIII-2P, pro
         rata, in an amount equal to (A) the Uncertificated Accrued Interest for
         each such REMIC III Group II Regular 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 III Regular Interest LTIII-2ZZ shall be
         reduced and deferred when the REMIC III Group II Overcollateralization
         Amount is less than the REMIC III Group II Overcollateralization Target
         Amount, by the lesser of (x) the amount of such difference and (y) the
         REMIC III Group II Regular Interest LTIII-2ZZ Maximum

                                     -137-
<PAGE>

         Interest Deferral Amount and such amount will be payable to the Holders
         of REMIC III Regular Interest LTIII-2AR1, REMIC III Regular Interest
         LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1, REMIC III Regular
         Interest LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3 in the same
         proportion as the related Overcollateralization Increase Amount is
         allocated to the Corresponding Certificates, provided, however, that
         the Uncertificated Principal Balance of REMIC III Regular Interest
         LTIII-2ZZ is increased by such amount;

                  (ii) to Holders of REMIC III Regular Interest LTIII-2SUB1,
         REMIC III Regular Interest LTIII-2GRP1, REMIC III Regular Interest
         LTIII-2SUB2, REMIC III Regular Interest LTIII-2GRP2 and REMIC III
         Regular Interest LTIII-2XX, 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;

                  (iii) second, to the Holders of REMIC III Group II Regular
         Interests, in an amount equal to the REMIC III Group II Marker
         Allocation Percentage of the remainder of the Available Distribution
         Amount for such Distribution Date after the distributions made pursuant
         to clause (i) above, allocated as follows:

                           (a) to the Holders of REMIC III Regular Interest
                  LTIII-2AA and REMIC III Regular Interest LTIII-2P, 98.00% of
                  such remainder (other than amounts payable under clause (d)
                  below), until the Uncertificated Principal Balance of such
                  REMIC III Regular Interest is reduced to zero, provided,
                  however, that the Uncertificated Principal Balance of REMIC
                  III Regular Interest LTIII-2P shall not be reduced until the
                  Distribution Date in May 2009 or any Distribution Date
                  thereafter, at which point such amount shall be distributed to
                  REMIC III Regular Interest LTIII-2P, until $100 has been
                  distributed pursuant to this clause;

                           (b) to the Holders of REMIC Regular Interest
                  LTIII-2AR1, REMIC Regular Interest LTIII-2AR2, REMIC III
                  Regular Interest LTIII-2MR1, REMIC III Regular Interest
                  LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3, 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 III Regular
                  Interests are reduced to zero;

                           (c) to the Holders of REMIC III Regular Interest
                  LTIII-2ZZ, 1.00% of such remainder (other than amounts payable
                  under the proviso below), until the Uncertificated Principal
                  Balance of such REMIC III Regular Interest is reduced to zero;
                  then

                           (d) any remaining amount to the Holders of the Class
                  I/II-R Certificates (in respect of Component R-3); and

                  (iv) third, to REMIC III Regular Interest LTIII-2P, 100% of
         the amount paid in respect of REMIC I Regular Interest LTI-P;

                                     -138-
<PAGE>

         provided, however, that (i) 98.00% and (ii) 2.00% of any principal
payments that are attributable to an Overcollateralization Release Amount shall
be allocated to Holders of (i) REMIC III Regular Interest LTIII-2AA and REMIC
III Regular Interest LTIII-2P, in that order and (ii) REMIC III Regular Interest
LTIII-2ZZ, respectively; provided that REMIC III Regular Interest LTIII-2P shall
not be reduced until the Distribution Date in May 2009, at which point such
amount shall be distributed to REMIC III Regular Interest LTIII-2P, until $100
has been distributed pursuant to this clause.

                  (v) to the Holders of REMIC III Regular Interests, in an
         amount equal to the remainder of the REMIC III Sub WAC Allocation
         Percentage of Group II Available Distribution Amount for such
         Distribution Date after the distributions made pursuant to clause (i)
         above, such that distributions of principal shall be deemed to be made
         to the REMIC III Regular Interests first, so as to keep the
         Uncertificated Principal Balance of each REMIC III Regular Interest
         ending with the designation "GRP" equal to 0.01% of the aggregate
         Stated Principal Balance of the Group II Loans; second, to each REMIC
         III Regular Interest ending with the designation "SUB," so that the
         Uncertificated Balance of each such REMIC III Regular Interest is equal
         to 0.01% of the excess of (x) the aggregate Stated Principal Balance of
         the Group II Loans over (y) the current Certificate Principal Balance
         of the Group II Senior Certificate (except that if any such excess is a
         larger number than in the preceding distribution period, the least
         amount of principal shall be distributed to such REMIC III Regular
         Interests such that the REMIC III Subordinated Balance Ratio is
         maintained); and third, any remaining principal to REMIC III Regular
         Interest LTIII-2XX.

                  (f) On each Distribution Date, the following amounts, in the
following order of priority and in accordance with the Remittance Report, shall
be distributed by REMIC V to REMIC VI on account of the REMIC V Regular
Interests or withdrawn from the related Distribution Account and distributed to
the Holders of the Class A-R Certificates, as the case may be: first, so as to
keep the Uncertificated Principal Balance of each REMIC V Regular Interest
ending with the designation "GRP" equal to 0.01% of the aggregate Scheduled
Principal Balance of the Loans in the related Loan Group; second, to each REMIC
V Regular Interest ending with the designation "SUB," so that the Uncertificated
Principal Balance of each such REMIC I Regular Interest is equal to 0.01% of the
excess of (x) the aggregate Scheduled Principal Balance of the Loans in the
related Loan Group over (y) the Certificate Principal Balance of the Senior
Certificates in the related Loan Group (except that if any such excess is a
larger number than in the preceding distribution period, the least amount of
principal shall be distributed to such REMIC V Regular Interests such that the
REMIC V Subordinated Balance Ratio is maintained); and third, any remaining
principal to REMIC V Regular Interest LTV-XX.

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

                  (i) first, to the Holders of the REMIC VI Regular Interests,
         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; and

                                     -139-
<PAGE>

                  (ii) second, to the Holders of REMIC VI Regular Interest
         LTVI-IIIA, REMIC VI Regular Interest LTVI-IVA, REMIC VI Regular
         Interest LTVI-VA, REMIC VI Regular Interest LTVI-VIA, REMIC VI Regular
         Interest LTVI-VII-AR1, REMIC VI Regular Interest LTVI-VII-AR2, REMIC VI
         Regular Interest LTVI-M, REMIC VI Regular Interest LTVI-B1 REMIC VI
         Regular Interest LTVI-B2, REMIC VI Regular Interest LTVI-B3, REMIC VI
         Regular Interest LTVI-B4, REMIC VI Regular Interest LTVI-B5 and REMIC
         VI Regular Interest LTVI-R the remainder of the Group III-VII Available
         Distribution Amount for such Distribution Date after the distributions
         made pursuant to clause (i) above, in the same manner and priority as
         distributions are made to the Corresponding Certificates.

                                     -140-
<PAGE>

                                   ARTICLE V
                                THE CERTIFICATES

         Section 5.1 THE CERTIFICATES.

                  (a) Each of the Certificates shall be substantially in the
forms annexed hereto as exhibits, and shall, on original issue, be executed and
authenticated by the Securities Administrator and delivered by the Trustee to or
upon the receipt of a written order to authenticate from the Depositor
concurrently with the sale and assignment to the Trustee of the Trust Fund. The
Certificates shall be issuable in Authorized Denominations.

         The Certificates shall be executed by manual or facsimile signature on
behalf of the Trust Fund by a Responsible Officer of the Securities
Administrator. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time such signatures were affixed, authorized to
sign on behalf of the Securities Administrator shall bind the Trust Fund,
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 Certificate. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
such Certificate shall have been manually authenticated by the Securities
Administrator substantially in the form provided for herein, and such
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.

                  (b) Subject to Sections 5.1(d) and 5.3, the Class A,
Mezzanine, Class B-1 and Class B-2 Certificates shall be Book-Entry
Certificates. On the Closing Date, the Class I/II-R, Class A-R, Class CE, Class
P and Junior Subordinate Certificates shall be definitive Certificates
("Definitive Certificates") and shall be issued in fully registered certificated
form.

                  (c) The Junior Subordinate Certificates initially offered and
sold in offshore transactions in reliance on Regulation S shall be issued in the
form of a temporary global certificate in definitive, fully registered form
(each, a "REGULATION S TEMPORARY GLOBAL CERTIFICATE"), which shall be deposited
with the Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository for the account of designated agents holding on behalf of
EUROCLEAR or CLEARSTREAM. Beneficial interests in each REGULATION S TEMPORARY
GLOBAL CERTIFICATE may be held only through Euroclear or Clearstream; provided,
however, that such interests may be exchanged for interests in a Definitive
Certificate in accordance with the requirements described in Section 5.3. After
the expiration of the RELEASE DATE, a beneficial interest in a Regulation S
Temporary Global Certificate may be exchanged for a beneficial interest in the
related permanent global certificate of the same Class (each, a "REGULATION S
PERMANENT GLOBAL CERTIFICATE"), in accordance with the procedures set forth in
Section 5.3. Each Regulation S Permanent Global Certificate shall be deposited
with the Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository.

                  (d) Definitive Certificates shall be issued to
Certificateholders or their nominees with respect to (i) any Global Certificates
if (A) any related depositary notifies the

                                     -141-
<PAGE>

Depositor and the Securities Administrator in writing that it is at any time
unwilling or unable to discharge properly its responsibilities as depositary
with respect to a Global Certificate, or ceases to be a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (such depositary hereinafter referred to as the
"withdrawing depositary"), and neither the Securities Administrator nor the
Depositor is able to locate a qualified successor within 90 days after such
notice; or (B) the related Certificate Owner (other than a Holder of a
Regulation S Temporary Global Certificate) requests that its interest in a
Global Certificate be exchanged for a Definitive Certificate; (ii) any
Book-Entry Certificate if (x) the Depository or the Depositor advises the
Securities Administrator in writing that the Depository is no longer willing or
able to discharge properly its responsibilities as Depository and neither the
Securities Administrator nor the Depositor is able to locate a qualified
successor within 90 days after such notice, (y) the Depositor, at its sole
option, with the consent of the Securities Administrator, elects to terminate
the Book-Entry System or (z) after the occurrence of a Master Servicer Event of
Default, the Certificate Owners of the Book-Entry Certificates representing
percentage interests of such Classes aggregating not less than 66% advise the
Securities Administrator and Depository through the Depository Participants in
writing that the continuation of a Book-Entry System through the Depository in
no longer in the best interests of the Certificate Owners; and (iii) any Global
Certificates or Book-Entry Certificates if the Securities Administrator or the
Trustee has instituted or has been directed to institute any judicial proceeding
to enforce the rights of the Certificateholders and the Securities Administrator
or the Trustee, as applicable, has been advised by counsel that in connection
with such proceeding it is necessary or appropriate for the Securities
Administrator or the Trustee, as applicable, to obtain possession of the
Certificates;

                  Upon notice of the occurrence of any of the events described
in the preceding paragraph (other than clause (i)(B) thereof) the Securities
Administrator shall notify all Certificate Owners of the same Class, through the
applicable Clearing Agency Participants (if applicable), of the occurrence of
such event and of the availability of Definitive Certificates to Certificate
Owners of such Class requesting the same. Upon surrender by the withdrawing
depositary of any Global Certificate, as applicable, and receipt from the
withdrawing Depository of any Book-Entry Certificate or depositary of any Global
Certificates, as applicable, and receipt from the withdrawing depositary or
Depository, as applicable, of instructions for re-registration, the Securities
Administrator shall, at the Depositor's expense (or, in the case of clause (ii)
(z) above, the Master Servicer's expense) issue such Certificates in the form of
Definitive Certificates, and thereafter the Trustee and Securities Administrator
shall recognize the holders of such Definitive Certificates as
Certificateholders under this Agreement. Neither the Depositor, the Securities
Administrator nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates of such Class,
all references herein to obligations imposed upon or to be performed by the
applicable Clearing Agency (if applicable) shall be deemed to be imposed upon
and performed by the Securities Administrator on behalf of the Trustee, to the
extent applicable with respect to such Definitive Certificates, and the
Securities Administrator and the Trustee shall recognize the Holders of the
Definitive Certificates of such Class as Certificateholders of such Class
hereunder.

                  (e) Neither the Trustee nor the Securities Administrator shall
have any liability to the Trust Fund and shall be indemnified by the Trust Fund
for, any cost, liability or expense incurred by them arising from a registration
of a Certificate or transfer, pledge sale or

                                     -142-
<PAGE>

other disposition of a Certificate in reliance upon a certification, Officer's
Certificate, affidavit, ruling or Opinion of Counsel described in this Article
V.

         Section 5.2 CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF
PRINCIPAL AND INTEREST; AUTHORIZED DENOMINATIONS. The aggregate principal amount
of the Group I Certificates that may be authenticated and delivered under this
Agreement is limited to the aggregate Principal Balance of the Group I Loans as
of the Cut-Off Date, as specified in the Preliminary Statement to this
Agreement, except for Certificates authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates pursuant
to Section 5.3. The aggregate principal amount of the Group II Certificates that
may be authenticated and delivered under this Agreement is limited to the
aggregate Principal Balance of the Group II Loans as of the Cut-Off Date, as
specified in the Preliminary Statement to this Agreement, except for
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section 5.3. The
aggregate principal amount of the Group III-VII Certificates that may be
authenticated and delivered under this Agreement is limited to the aggregate
Principal Balance of the Group III-VII Loans as of the Cut-Off Date, as
specified in the Preliminary Statement to this Agreement, except for
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section 5.3. Such
aggregate principal amount shall be allocated among one or more Classes having
designations, types of interests, initial per annum Pass-Through Rates, initial
Certificate Principal Balances and last scheduled Distribution Dates as
specified in the Preliminary Statement to this Agreement. The aggregate
Percentage Interest of each Class of Certificates of which the Certificate
Principal Balance equals zero as of the Cut-Off Date that may be authenticated
and delivered under this Agreement is limited to 100%. Certificates shall be
issued in Authorized Denominations.

         Section 5.3 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. (a)
The Securities Administrator shall cause to be kept at its Corporate Trust
Office a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Securities Administrator 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 at the
Corporate Trust Office of the Securities Administrator maintained for such
purpose pursuant to the foregoing paragraph for certificate transfer and
surrender purposes, and, in the case of the Junior Subordinate Certificates,
Class CE Certificates, Class P Certificates or Residual Certificates, upon
satisfaction of the conditions set forth in Sections 5.3(c), (d), (e) and (f)
below, as applicable, the Securities Administrator on behalf of the Trust shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates, in applicable form set forth below,
of the same aggregate Percentage Interest.

         At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in Authorized Denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Securities Administrator shall execute, authenticate and deliver
the Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the Trustee or the Securities
Administrator) be duly endorsed

                                     -143-
<PAGE>

by, or be accompanied by a written instrument of transfer satisfactory to the
Trustee and the Securities Administrator duly executed by, the Holder thereof or
his attorney duly authorized in writing.

                  (b) Except as provided herein, Book-Entry Certificates and
Global Certificates shall at all times remain registered in the name of the
Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee or the Securities
Administrator except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Certificates; (iii) ownership and transfers of
registration of such Certificates on the books of the Depository shall be
governed by applicable rules established by the Depository; (iv) the Depository
may collect its usual and customary fees, charges and expenses from its
Depository Participants; (v) the Trustee and the Securities Administrator shall
for all purposes deal with the Depository as representative of the Certificate
Owners of the Certificates for purposes of exercising the rights of Holders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee and the Securities
Administrator may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants and
furnished by the Depository Participants with respect to indirect participating
firms and Persons shown on the books of such indirect participating firms as
direct or indirect Certificate Owners; and (vii) the direct participants of the
Depository shall have no rights under this Agreement under or with respect to
any of the Certificates held on their behalf by the Depository, and the
Depository may be treated by the Trustee, the Securities Administrator and
either the Trustee's or the Securities Administrator's agents, employees,
officers and directors as the absolute owner of the Certificates for all
purposes whatsoever.

         All transfers by Certificate Owners of Book-Entry Certificates and
Global Certificates shall be made in accordance with the procedures established
by the Depository Participant or brokerage firm representing such Certificate
Owners. Each Depository Participant shall only transfer Book-Entry Certificates
or Global Certificates of Certificate Owners that it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures. The parties hereto are hereby authorized to execute a Letter of
Representations with the Depository or take such other action as may be
necessary or desirable to register a Book-Entry Certificate or Global
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.

                  (c) No Transfer of a Junior Subordinate Certificate, Class CE
Certificate, Class P Certificate or Class I/II-R 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 such Transfer is made
pursuant to the requirements of this Section 5.3 and is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event of any such transfer 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 shall certify to the Trustee and the Securities
Administrator in writing the facts surrounding the Transfer in substantially the
form set forth in EXHIBIT D (the "TRANSFEROR CERTIFICATE"). Beneficial interests
in any Class CE, Class P, Class I/II-R or Junior Subordinate Certificate may be
transferred to a person who takes delivery in the

                                     -144-
<PAGE>

form of an interest in (x) in the case of a transfer to a QIB in reliance on
RULE 144A of the Securities Act, a Definitive Certificate, only upon receipt by
the Securities Administrator and the Trustee of a written certification from the
related transferee (substantially in the form of EXHIBIT F hereto) to the effect
that, among other things, the transfer is being made to a QIB in accordance with
Rule 144A (except in the case of the initial transfer from the Depositor to an
Affiliate of the Depositor) and (y) in the case of a transfer to an
Institutional Accredited Investor, a Definitive Certificate, only upon receipt
by the Securities Administrator and the Trustee of a written certification from
the related transferee (substantially in the form of EXHIBIT E hereto) to the
effect that, among other things, the transfer is being made to an "Accredited
Investor" within the meaning of paragraphs (1), (2), (3) or (7) of Rule 501(a)
of the Securities Act; provided, however, no Transferor Letter or transferee
certifications shall be necessary in connection with any such Transfer if, in
connection therewith, there shall be delivered to the Trustee, the Depositor and
the Securities Administrator an Opinion of Counsel acceptable to and in form
reasonably satisfactory to the Trustee, the Depositor and the Securities
Administrator that such Transfer may be made pursuant to an exemption from the
Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Seller, the Master Servicer, the Securities Administrator or the
Trustee. Beneficial interests in any Junior Subordinate Certificate may be
transferred to a person who takes delivery in the form of an interest in a
REGULATION S PERMANENT GLOBAL CERTIFICATE (which shall be in the form of a
REGULATION S TEMPORARY GLOBAL CERTIFICATE on or prior to the Release Date), only
upon receipt by the Securities Administrator and Trustee of a written
certification (substantially in the form of EXHIBIT H-1 hereto) from the
transferee (which in the case of Book-Entry Certificates, such transferee shall
be deemed to have represented the contents of such form of certification) to the
effect that the transfer is being made to a non-U.S. Person in accordance with
Regulation S under the Securities Act. Each Holder of a Class I/II-R, Junior
Subordinate, Class CE or Class P Certificate desiring to effect any such
Transfer pursuant to this paragraph shall, and does hereby agree to, indemnify
the Trustee, the Depositor, the Seller, the Securities Administrator 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.

                  (d) A holder of a beneficial interest in a Regulation S
Temporary Global Certificate must provide Euroclear or Clearstream, as the case
may be, with a certificate in the form of Annex A to EXHIBIT H-2 hereto
certifying that the beneficial owner of the interest in such Global Certificate
is not a U.S. Person (as defined in Regulation S), and Euroclear or Clearstream,
as the case may be, must provide to the Trustee and Securities Administrator a
certificate in the form of EXHIBIT H-2 hereto prior to (i) the payment of
interest or principal with respect to such holder's beneficial interest in the
Regulation S Temporary Global Certificate and (ii) any exchange of such
beneficial interest for a beneficial interest in a Regulation S Permanent Global
Certificate.

                  (e) No transfer of a Class CE Certificate, Class P Certificate
or Residual Certificate or any interest therein shall be made to any Plan
subject to ERISA or Section 4975 of the Code (each, a "Plan"), any Person
acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring such Certificates with "Plan Assets" of a Plan within the meaning of
the Department of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101
("Plan Assets"), as certified by each such Transferee in the form of EXHIBIT G,
unless the Securities Administrator is provided with an Opinion of Counsel for
the benefit of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Master Servicer and on which they may rely which
establishes to the satisfaction of each of them that the purchase, sale and
holding of such

                                     -145-
<PAGE>

Certificates is permissible under applicable law, will not constitute or result
in any prohibited transaction under ERISA or Section 4975 of the Code and will
not subject the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, any Servicer or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator or the Trust Fund. Neither a certification nor an
Opinion of Counsel will be required in connection with the initial transfer of
any such Certificate by the Depositor to an affiliate of the Depositor (in which
case, the Depositor or any affiliate thereof shall have deemed to have
represented that such affiliate is not a Plan or a Person investing Plan Assets)
and the Trustee and the Securities Administrator shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee
or the Securities Administrator, shall be a written representation) from the
Depositor of the status of such transferee as an affiliate of the Depositor.

         Each Transferee of a Mezzanine Certificate, Class B-1 Certificate or
Class B-2 Certificate will be deemed to have represented by virtue of its
purchase or holding of such Certificate (or interest therein) that either (a)
such Transferee is not a Plan or purchasing such Certificate with Plan Assets,
(b) it has acquired and is holding such Certificate in reliance on Prohibited
Transaction Exemption ("PTE") 94-84 or FAN 97-03, as amended by PTE 97-34, 62
Fed. Reg. 39021 (July 21, 1997), PTE 2000-58, 65 Fed. Reg. 67765 (November 13,
2000) and PTE 2002-41 67 Fed. Reg. 54487 (August 22, 2002) (the "Exemption"),
and that it understands that there are certain conditions to the availability of
the Exemption including that such Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by a Rating Agency or (c)
the following conditions are satisfied: (i) such Transferee is an insurance
company, (ii) the source of funds used to purchase or hold such Certificate (or
interest therein) is an "insurance company general account" (as defined in U.S.
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and
(iii) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.

         Each Transferee of a Junior Subordinate Certificate will be required to
represent that (a) such Transferee is not a Plan or purchasing such Certificate
with Plan Assets, (i) the Transferee is an insurance company, (ii) the source of
funds used to purchase or hold such Certificate (or interest therein) is an
"insurance company general account" as defined in PTCE 95-60 and (iii) the
conditions set forth in Section I and III or PTCE 95-60 have been satisfied.

         If any Certificate or any interest therein is acquired or held in
violation of the provisions of this Section 5.3(e), the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any such Certificate
or interest therein was effected in violation of the provisions of the three
preceding paragraphs shall indemnify and hold harmless the Depositor, the Master
Servicer, the Trustee, the Securities Administrator and the Trust from and
against any and all liabilities, claims, costs or expenses incurred by those
parties as a result of that acquisition or holding.

                  (f) Each Transferee of a Residual Certificate shall be deemed
by the acceptance or acquisition of the related Ownership Interest to have
agreed to be bound by the following provisions and to have irrevocably appointed
the Depositor or its designee as its attorney-in-fact to negotiate the terms of
any mandatory sale under clause (v) below and to

                                     -146-
<PAGE>

execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Transferee of a Residual
Certificate are expressly subject to the following provisions:

                  (i) Each such Transferee shall be a Permitted Transferee and
         shall promptly notify the Securities Administrator of any change or
         impending change in its status as a Permitted Transferee.

                  (ii) No Person shall acquire an Ownership Interest in a
         Residual Certificate unless such Ownership Interest is a PRO RATA
         undivided interest.

                  (iii) In connection with any proposed transfer of any
         Ownership Interest in a Residual Certificate, the Securities
         Administrator shall as a condition to registration of the transfer,
         require delivery to it, in form and substance satisfactory to it, of
         each of the following:

                           (A) an affidavit in the form of EXHIBIT C hereto from
                  the proposed Transferee to the effect that such Transferee is
                  a Permitted Transferee and that it is not acquiring its
                  Ownership Interest in the Residual Certificate that is the
                  subject of the proposed transfer as a nominee, trustee or
                  agent for any Person who is not a Permitted Transferee; and

                           (B) a covenant of the proposed Transferee to the
                  effect that the proposed Transferee agrees to be bound by and
                  to abide by the transfer restrictions applicable to the
                  Residual Certificates.

                  (iv) Any attempted or purported transfer of any Ownership
         Interest in a Residual Certificate in violation of the provisions of
         this Section shall be absolutely null and void and shall vest no rights
         in the purported Transferee. If any purported Transferee shall, in
         violation of the provisions of this Section, become a Holder of a
         Residual Certificate, then the prior Holder of such Residual
         Certificate that is a Permitted Transferee shall, upon discovery that
         the registration of transfer of such Residual Certificate was not in
         fact permitted by this Section, be restored to all rights as Holder
         thereof retroactive to the date of registration of transfer of such
         Residual Certificate. The Securities Administrator shall be under no
         liability to any Person for any registration of transfer of a Residual
         Certificate that is in fact not permitted by this Section or for making
         any distributions due on such Residual 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 Securities
         Administrator received the documents specified in clause (iii). The
         Securities Administrator shall be entitled to recover from any Holder
         of a Residual Certificate that was in fact not a Permitted Transferee
         at the time such distributions were made all distributions made on such
         Residual Certificate. Any such distributions so recovered by the
         Securities Administrator shall be distributed and delivered by the
         Securities Administrator to the prior Holder of such Residual
         Certificate that is a Permitted Transferee.

                  (v) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Residual Certificate in violation of the
         restrictions in this Section, then the

                                     -147-
<PAGE>

         Securities Administrator shall have the right but not the obligation,
         without notice to the Holder of such Residual Certificate or any other
         Person having an Ownership Interest therein, to notify the Depositor to
         arrange for the sale of such Residual Certificate. The proceeds of such
         sale, net of commissions (which may include commissions payable to the
         Depositor or its affiliates in connection with such sale), expenses and
         taxes due, if any, will be remitted by the Securities Administrator to
         the previous Holder of such Residual Certificate that is a Permitted
         Transferee, except that in the event that the Securities Administrator
         determines that the Holder of such Residual Certificate may be liable
         for any amount due under this Section or any other provisions of this
         Agreement, the Securities Administrator may withhold a corresponding
         amount from such remittance as security for such claim. The terms and
         conditions of any sale under this clause (v) shall be determined in the
         sole discretion of the Securities Administrator and it shall not be
         liable to any Person having an Ownership Interest in a Residual
         Certificate as a result of its exercise of such discretion.

                  (vi) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Residual Certificate in violation of the
         restrictions in this Section, then the Securities Administrator upon
         receipt of reasonable compensation will provide to the Internal Revenue
         Service, and to the persons specified in Sections 860E(e)(3) and (6) of
         the Code, information needed to compute the tax imposed under Section
         860E(e)(5) of the Code on transfers of Residual interests to
         Disqualified Organizations.

         The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Securities Administrator, in form and substance satisfactory to
the Securities Administrator, (i) written notification from each Rating Agency
that the removal of the restrictions on transfer set forth in this Section will
not cause such Rating Agency to downgrade its rating of the Certificates and
(ii) an Opinion of Counsel to the effect that such removal will not cause any
REMIC created hereunder to fail to qualify as a REMIC. The Holder of the
Residual Certificate issued hereunder, while not a Disqualified Organization, is
the Tax Matters Person.

                  (g) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Securities
Administrator may require 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.

         All Certificates surrendered for registration of transfer or exchange
shall be canceled by the Securities Administrator and disposed of pursuant to
its standard procedures.

         Section 5.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If (i) any mutilated Certificate is surrendered to the Trustee or the
Securities Administrator, or (ii) the Trustee or the Securities Administrator
receives evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and there is delivered to the Trustee and the Securities
Administrator such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Securities Administrator
that such Certificate has been acquired by a protected purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost

                                     -148-
<PAGE>

or stolen Certificate, a new Certificate of like Percentage Interest. Upon the
issuance of any new Certificate under this Section 5.4, the Trustee or the
Securities Administrator 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 connected therewith. Any replacement Certificate issued
pursuant to this Section 5.4 shall constitute complete and indefeasible evidence
of ownership in the Trust Fund, as if originally issued, whether or not the lost
or stolen Certificate shall be found at any time.

         Section 5.5 PERSONS DEEMED OWNERS.

         The Depositor, the Securities Administrator, the Master Servicer, the
Trustee and any agent of any of them may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.1, 4.3 and 4.5, as applicable, and
for all other purposes whatsoever, and none of the Depositor, the Securities
Administrator, the Master Servicer, the Trustee or any agent of the Depositor,
the Securities Administrator, the Master Servicer or the Trustee shall be
affected by notice to the contrary.

                                     -149-
<PAGE>

                                   ARTICLE VI
           THE DEPOSITOR, MASTER SERVICER AND THE CREDIT RISK MANAGER

         Section 6.1 LIABILITY OF THE DEPOSITOR AND THE MASTER SERVICER.

         The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement upon them in their respective capacities as Depositor and
Master Servicer and undertaken hereunder by the Depositor and the Master
Servicer herein.

         Section 6.2 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER
SERVICER.

         Subject to the following paragraph, the Depositor shall keep in full
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation. Subject to the following paragraph, the
Master Servicer shall keep in full effect its existence, rights and franchises
as a corporation under the laws of the jurisdiction of its formation. The
Depositor and the Master Servicer each shall obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Loans and to
perform its respective duties under this Agreement.

         The Depositor or the Master Servicer may be merged or consolidated with
or into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor or the Master Servicer, 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 Rating Agencies' ratings of the Certificates
in effect immediately prior to such merger or consolidation will not be
qualified, reduced or withdrawn as a result thereof (as evidenced by a letter to
such effect from the Rating Agencies).

         Section 6.3 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE MASTER
SERVICER, THE SERVICERS, THE SECURITIES ADMINISTRATOR AND OTHERS.

         None of the Depositor, the Master Servicer, the Securities
Administrator, the Servicers or any of the directors, officers, employees or
agents of the Depositor, the Master Servicer, the Securities Administrator or
the Servicers 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 the Servicing Agreements, or
for errors in judgment; provided, however, that this provision shall not protect
the Depositor, the Master Servicer, the Securities Administrator or any such
person against any breach of warranties, representations or covenants made
herein or in the Servicing Agreements, or against any specific liability imposed
on the Master Servicer, the Securities Administrator or the Servicers pursuant
hereto or pursuant to the Servicing Agreements, or against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder or under the Servicing Agreements. The
Depositor, the Master Servicer, the Securities Administrator, the Servicers and

                                     -150-
<PAGE>

any director, officer, employee or agent of the Depositor, the Master Servicer,
the Securities Administrator or the Servicers may rely in good faith on any
document of any kind which, PRIMA FACIE, is properly executed and submitted by
any Person respecting any matters arising hereunder or under the Servicing
Agreements. The Depositor, the Master Servicer, the Servicers, the Securities
Administrator, the Custodian and any director, officer, employee or agent of the
Depositor, the Master Servicer, the Servicers, the Custodian or the Securities
Administrator shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement, the Certificates or any Servicing Agreement, or any
loss, liability or expense incurred by any of such Persons other than by reason
of such Person's willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder or by reason of reckless disregard of its
obligations and duties hereunder. None of the Depositor, the Master Servicer,
the Securities Administrator, the Custodian or any Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement, the Custodial
Agreement or the applicable Servicing Agreement and, in its opinion, does not
involve it in any expense or liability; provided, however, that each of the
Depositor, the Master Servicer, the Custodian and the Securities Administrator
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom (except 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) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Master Servicer, the Custodian, the Servicers and the Securities
Administrator shall be entitled to be reimbursed therefor from the Distribution
Account as and to the extent provided in Article III, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Distribution Account.

         Section 6.4 LIMITATION ON RESIGNATION OF THE 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 pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor Master Servicer shall have assumed the Master Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.

         Section 6.5 ASSIGNMENT OF MASTER SERVICING.

         The Master Servicer may sell and assign its rights and delegate its
duties and obligations in its entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Fannie Mae or Freddie Mac; (b) shall have a net worth
of not less than $15,000,000 (unless otherwise approved by each Rating Agency
pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the
Trustee (as evidenced in a writing signed

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by the Trustee); and (d) shall execute and deliver to the Trustee an agreement,
in form and substance reasonably satisfactory to the Trustee, which contains an
assumption by such Person of the due and punctual performance and observance of
each covenant and condition to be performed or observed by it as master servicer
under this Agreement, any custodial agreement from and after the effective date
of such agreement; (ii) each Rating Agency shall be given prior written notice
of the identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning and selling the master servicing shall deliver to the
Trustee an officer's certificate and an Opinion of Independent counsel, each
stating that all conditions precedent to such action under this Agreement have
been completed and such action is permitted by and complies with the terms of
this Agreement. No such assignment or delegation shall affect any liability of
the Master Servicer arising prior to the effective date thereof.

         Section 6.6 RIGHTS OF THE DEPOSITOR IN RESPECT OF THE MASTER SERVICER.

         The Master Servicer shall afford the Depositor and the Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer in respect of the Master Servicer's rights and
obligations hereunder and access to officers of the Master Servicer responsible
for such obligations. Upon request, the Master Servicer shall furnish to the
Depositor and the Trustee the most recent financial statements of its parent and
such other information relating to the Master Servicer's capacity to perform its
obligations under this Agreement as it possesses. To the extent such information
is not otherwise available to the public, the Depositor and the Trustee shall
not disseminate any information obtained pursuant to the preceding two sentences
without the Master Servicer's written consent, except as required pursuant to
this Agreement or to the extent that it is appropriate to do so (i) in working
with legal counsel, auditors, taxing authorities or other governmental agencies
or (ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction
or decree of any court or governmental authority having jurisdiction over the
Depositor, the Trustee or the Trust Fund, and in any case, the Depositor or the
Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.

         Section 6.7 DUTIES OF THE CREDIT RISK MANAGER.

         For and on behalf of the Depositor, pursuant to the Credit Risk
Management Agreements the Credit Risk Manager will provide reports and
recommendations concerning certain delinquent and defaulted Group I Loans and
Group II Loans, and as to the collection of any Prepayment Charges with respect
to the Group I Loans and Group II Loans. Such reports and

                                     -152-
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recommendations will be based upon information provided to the Credit Risk
Manager pursuant to the related Credit Risk Management Agreement, and the Credit
Risk Manager shall look solely to the related Servicer for all information and
data (including loss and delinquency information and data) relating to the
servicing of the related Group I Loans and Group II Loans. Upon any termination
of the Credit Risk Manager or the appointment of a successor Credit Risk
Manager, the Depositor shall give written notice thereof to the Servicers, the
Master Servicer, the Trustee and each Rating Agency. Notwithstanding the
foregoing, the termination of the Credit Risk Manager pursuant to this Section
shall not become effective until the appointment of a successor Credit Risk
Manager.

         Section 6.8 LIMITATION UPON LIABILITY OF THE CREDIT RISK MANAGER.

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

         Section 6.9 REMOVAL OF THE CREDIT RISK MANAGER.

         The Credit Risk Manager may be removed as Credit Risk Manager by
Certificateholders evidencing, in aggregate, not less than 66 2/3% of the
aggregate Percentage Interests of all Classes of Group I Certificates and Group
II Certificates, in the exercise of its or their sole discretion. The
Certificateholders shall provide written notice of the Credit Risk Manager's
removal to the Trustee. Upon receipt of such notice, the Trustee shall provide
written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager.

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                                  ARTICLE VII
                                     DEFAULT

         Section 7.1 MASTER SERVICER EVENTS OF DEFAULT.

                  (a) "Master Servicer Event of Default," wherever used herein,
means any one of the following events:

                  (i) [Reserved];

                  (ii) any failure on the part of the Master Servicer duly 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 the breach by the Master Servicer of any representation
         and warranty contained in Section 2.5, which continues unremedied for a
         period of 30 days after the date on which written notice of such
         failure, requiring the same to be remedied, shall have been given to
         the Master Servicer by the Depositor or the Trustee or to the Master
         Servicer, the Depositor and the Trustee by the Holders of Certificates
         evidencing, in aggregate, not less than 25% of the aggregate
         Certificate Principal Balance of the Certificates; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises in an involuntary case
         under any present or future federal or state bankruptcy, insolvency or
         similar law or the appointment of a conservator or receiver or
         liquidator in any insolvency, readjustment of debt, marshalling of
         assets and liabilities or similar proceeding, 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 90 days; or

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

                  (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 any applicable insolvency or reorganization statute, make
         an assignment for the benefit of its creditors, or voluntarily suspend
         payment of its obligations; or

                  (vi) any failure of the Master Servicer to make any Advance on
         any Distribution Account Deposit Date required to be made from its own
         funds pursuant to Section 4.9 which continues unremedied until 3:00
         p.m. New York time on the Business Day immediately following the
         Distribution Account Deposit Date.

If a Master Servicer Event of Default described in clauses (ii) through (v) of
this Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the Depositor or
the Trustee may, and at the written direction of the Holders of Certificates
evidencing, in aggregate, not less than 51% of the aggregate Certificate
Principal Balance of the Certificates, the Trustee shall, by notice in writing
to the Master Servicer (and to the Depositor if given by the Trustee or to the
Trustee if given by the

                                     -154-
<PAGE>

Depositor) with a copy to each Rating Agency, terminate all of the rights and
obligations of the Master Servicer (and the Securities Administrator if the
Master Servicer and the Securities Administrator are the same entity) in its
capacity as Master Servicer (and in its capacity as Securities Administrator if
the Master Servicer and the Securities Administrator are the same entity) under
this Agreement, to the extent permitted by law, and in and to the Loans and the
proceeds thereof. Except as otherwise provided in Section 7.4, if a Master
Servicer Event of Default described in clause (vi) hereof shall occur, the
Trustee shall, by notice in writing to the Master Servicer and the Depositor,
terminate all of the rights and obligations of the Master Servicer (and the
Securities Administrator if the Master Servicer and the Securities Administrator
are the same entity) in its capacity as Master Servicer under this Agreement
(and in its capacity as Securities Administrator if the Master Servicer and the
Securities Administrator are the same entity) and in and to the Loans and the
proceeds thereof. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer (and, if applicable, the
Securities Administrator) under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver, on behalf
of and at the expense of the Master Servicer, (and, if applicable, the
Securities Administrator) 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 Loans and related documents, or otherwise. The
Master Servicer (and, if applicable, the Securities Administrator) agrees
promptly (and in any event no later than ten Business Days subsequent to such
notice) to provide the Trustee with all documents and records requested by it to
enable it to assume the Master Servicer's (and, if applicable, the Securities
Administrator's) functions under this Agreement, and to cooperate with the
Trustee in effecting the termination of the Master Servicer's (and, if
applicable, the Securities Administrator's) responsibilities and rights under
this Agreement (provided, however, that the Master Servicer shall continue to be
entitled to receive all amounts accrued or owing to it under this Agreement on
or prior to the date of such termination, whether in respect of Advances or
otherwise, and shall continue to be entitled to the benefits of Section 6.3,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 7.1, the Trustee shall not be
deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a Master Servicer Event of Default is received
by the Trustee and such notice references the Certificates, the Trust or this
Agreement. The Trustee shall promptly notify the Rating Agencies of the
occurrence of a Master Servicer Event of Default of which it has knowledge as
provided above.

         Section 7.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

         On and after the time the Master Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Master
Servicer (and, if applicable, the Securities Administrator) in its capacity as
Master Servicer (and, if applicable, the Securities Administrator) under this
Agreement and the transactions set forth or provided for herein, and all the
responsibilities, duties and liabilities relating thereto and arising thereafter
shall be assumed by the Trustee (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.3 and the obligation

                                     -155-
<PAGE>

to deposit amounts in respect of losses pursuant to Section 3.23(c)) by the
terms and provisions hereof including, without limitation, the Master Servicer's
obligations to make Advances no later than each Distribution Date pursuant to
Section 4.9; provided, however, that if the Trustee is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage
loans, then the Trustee shall not be obligated to make Advances pursuant to
Section 4.9; and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide information
required by Section 7.1 shall not be considered a default by the Trustee as
successor to the Master Servicer hereunder. As compensation therefor, the
Trustee shall be entitled to investment earnings on the Distribution Accounts
and all other remuneration to which the Master Servicer would have been entitled
if it had continued to act hereunder. Notwithstanding the above and subject to
the immediately following paragraph, the Trustee may, if it shall be unwilling
to so act, or shall, if it is unable to so act or if it is prohibited by law
from making advances regarding delinquent mortgage loans or if the Holders of
Certificates evidencing, in aggregate, not less than 51% of the aggregate
Certificate Principal Balance of the Certificates so request in writing promptly
appoint or petition a court of competent jurisdiction to appoint, an established
mortgage loan servicing institution acceptable to each Rating Agency and having
a net worth of not less than $15,000,000, as the successor to the Master
Servicer under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
Agreement.

         No appointment of a successor to the Master Servicer (and, if
applicable, the Securities Administrator) under this Agreement shall be
effective until the assumption by the successor of all of the Master Servicer's
(and, if applicable, the Securities Administrator's) responsibilities, duties
and liabilities hereunder. In connection with such appointment and assumption
described herein, the Trustee may make such arrangements for the compensation of
such successor out of payments on Loans as it and such successor shall agree;
PROVIDED, HOWEVER, that no such compensation shall be in excess of that
permitted the Master Servicer (and, if applicable, the Securities Administrator)
as such hereunder. The Depositor, the Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Pending appointment of a successor to the Master Servicer under
this Agreement, the Trustee shall act in such capacity as hereinabove provided.
The transition costs and expenses incurred by the Trustee in connection with the
replacement of the Master Servicer (and, if applicable, the Securities
Administrator) shall be reimbursed out of the Trust.

         Section 7.3 NOTIFICATION TO CERTIFICATEHOLDERS.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.1 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.2 above, the Trustee shall give prompt written notice
thereof to the Certificateholders at their respective addresses appearing in the
Certificate Register.

                  (b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Holders of Certificates notice
of each such occurrence, unless such default or Master Servicer Event of Default
shall have been cured or waived.

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<PAGE>

         Section 7.4 WAIVER OF MASTER SERVICER EVENTS OF DEFAULT.

         The Holders evidencing, in aggregate, not less than 66 2/3% of the
aggregate Percentage Interests of the Certificates affected by any default or
Master Servicer Event of Default hereunder may waive such default or Master
Servicer Event of Default; PROVIDED, HOWEVER, that a default or Master Servicer
Event of Default under clause (vi) of Section 7.1 may be waived only by all of
the Holders of the Regular Interest Certificates. Upon any such waiver of a
default or Master Servicer Event of Default, such default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.

                                     -157-
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                                  ARTICLE VIII
             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

         Section 8.1 DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.

         The Trustee, prior to the occurrence of a Master Servicer Event of
Default and after the curing or waiver of all Master Servicer Events of Default
which may have occurred, and the Securities Administrator each undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement as duties of the Trustee and the Securities Administrator,
respectively. During the continuance of a Master Servicer Event of Default, 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 its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.

         Each of the Trustee and the Securities Administrator, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to it, which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement. If any such instrument is found not to conform on its face to the
requirements of this Agreement, the Trustee or the Securities Administrator, as
the case may be, shall take such action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to its
satisfaction, the Securities Administrator shall provide notice to the Trustee
thereof and the Trustee shall provide notice to the Certificateholders.

         No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own misconduct; PROVIDED,
HOWEVER, that:

                  (i) Prior to the occurrence of a Master Servicer Event of
         Default, and after the curing or waiver of all such Master Servicer
         Events of Default which may have occurred with respect to the Trustee,
         and at all times with respect to the Securities Administrator, the
         duties and obligations of the Trustee and the Securities Administrator
         shall be determined solely by the express provisions of this Agreement,
         neither the Trustee nor the Securities Administrator shall be liable
         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 or
         the Securities Administrator and, in the absence of bad faith on the
         part of the Trustee or the Securities Administrator, respectively, the
         Trustee or the Securities Administrator, respectively, 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 or the Securities Administrator, respectively, that
         conform to the requirements of this Agreement;

                  (ii) Neither the Trustee nor the Securities Administrator
         shall be liable for an error of judgment made in good faith by a
         Responsible Officer or Responsible Officers of the Trustee or an
         officer or officers of the Securities Administrator, respectively,

                                     -158-
<PAGE>

         unless it shall be proved that the Trustee or the Securities
         Administrator, respectively, was negligent in ascertaining the
         pertinent facts; and

                  (iii) Neither the Trustee nor the Securities Administrator
         shall be liable with respect to any action taken, suffered or omitted
         to be taken by it in good faith in accordance with the direction of the
         Holders of Certificates evidencing, in aggregate, not less than 25% (or
         such other percentage set forth in this Agreement) of the aggregate
         Certificate Principal Balance of the Certificates, relating to the
         time, method and place of conducting any proceeding for any remedy
         available to the Trustee or the Securities Administrator or exercising
         any trust or power conferred upon the Trustee or the Securities
         Administrator under this Agreement.

         Section 8.2 CERTAIN MATTERS AFFECTING TRUSTEE AND SECURITIES
ADMINISTRATOR.

                  (a) Except as otherwise provided in Section 8.1:

                  (i) The Trustee and the Securities Administrator may request
         and rely upon and shall be protected in acting or refraining from
         acting upon any resolution, Officers' Certificate, certificate of
         auditors or any other certificate, statement, instrument, opinion,
         report, notice, request, consent, order, appraisal, bond or other paper
         or document reasonably believed by it to be genuine and to have been
         signed or presented by the proper party or parties;

                  (ii) The Trustee and the Securities Administrator may consult
         with counsel of its selection and any advice of such counsel or 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 advice or Opinion
         of Counsel;

                  (iii) Neither the Trustee nor the Securities Administrator
         shall be under any obligation to exercise any of the trusts or powers
         vested in it by this Agreement or to institute, conduct or defend any
         litigation hereunder or in relation hereto at the request, order or
         direction of any of the Certificateholders, pursuant to the provisions
         of this Agreement, unless such Certificateholders shall have offered to
         the Trustee or the Securities Administrator, as the case may be,
         reasonable security or indemnity satisfactory to it against the costs,
         expenses and liabilities which may be incurred therein or thereby;
         nothing contained herein shall, however, relieve the Trustee of the
         obligation, upon the occurrence of a Master Servicer Event of Default
         (which has not been cured or waived), to exercise such of the rights
         and powers vested in it by this Agreement, and to use the same degree
         of care and skill in their exercise as a prudent person would exercise
         or use under the circumstances in the conduct of such person's own
         affairs;

                  (iv) Neither the Trustee nor the Securities Administrator
         shall be liable 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;

                                     -159-
<PAGE>

                  (v) Prior to the occurrence of a Master Servicer Event of
         Default hereunder and after the curing or waiver of all Master Servicer
         Events of Default which may have occurred with respect to the Trustee,
         and at all times with respect to the Securities Administrator, neither
         the Trustee nor the Securities Administrator shall be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond or other paper or document, unless
         requested in writing to do so by the Holders of Certificates
         evidencing, in aggregate, not less than 25% of the Trust Fund;
         PROVIDED, HOWEVER, that if the payment within a reasonable time to the
         Trustee or the Securities Administrator of the costs, expenses or
         liabilities likely to be incurred by it in the making of such
         investigation is, in the opinion of the Trustee or the Securities
         Administrator, as applicable, not reasonably assured to the Trustee or
         the Securities Administrator by such Certificateholders, the Trustee or
         the Securities Administrator, as applicable, may require reasonable
         indemnity satisfactory to it against such expense, or liability from
         such Certificateholders as a condition to taking any such action;

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

                  (vii) The Securities Administrator shall not be liable for any
         loss resulting from the investment of funds held in a Distribution
         Account at the direction of the Master Servicer pursuant to Section
         3.23(c);

                  (viii) Neither the Trustee nor the Securities Administrator
         shall be liable for any action taken, suffered, or omitted to be taken
         by it in good faith and reasonably believed by it to be authorized or
         within the discretion or rights or powers conferred upon it by this
         Agreement;

                  (ix) The Trustee shall not be deemed to have notice of any
         default or Master Servicer Event of Default unless a Responsible
         Officer of the Trustee has actual knowledge thereof or unless written
         notice of any event which is in fact such a default is received by the
         Trustee at the Corporate Trust Office of the Trustee, and such notice
         references the Certificates and this Agreement; and

                  (x) The rights, privileges, protections, immunities and
         benefits given to the Trustee, including, without limitation, its right
         to be indemnified, are extended to, and shall be enforceable by, each
         agent, custodian and other Person employed to act hereunder.

                  (b) The Trustee is hereby directed by the Depositor to execute
each Cap Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap
Contracts, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Trustee under the Cap Contracts at
closing shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contracts, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contracts.

                                     -160-
<PAGE>

                  (c) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it 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 such Certificates, subject to the provisions of this Agreement.

         Section 8.3 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR LOANS.

         The recitals contained herein and in the Certificates (other than the
signature of the Securities Administrator, the authentication of the Securities
Administrator on the Certificates, the acknowledgments of the Trustee contained
in Article II and the representations and warranties of the Trustee in Section
8.12) shall be taken as the statements of the Depositor and neither the Trustee
nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 8.12) or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Loan or related document. The Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor or the Master Servicer in respect of the Loans or deposited in or
withdrawn from the Distribution Account.

         Section 8.4 TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR MAY
OWN CERTIFICATES.

         Each of the Trustee, the Master Servicer and the Securities
Administrator in its individual capacity or any other capacity may become the
owner or pledgee of Certificates and may transact business with other interested
parties and their Affiliates with the same rights it would have if it were not
the Trustee, the Master Servicer or the Securities Administrator.

         Section 8.5 FEES AND EXPENSES OF TRUSTEE AND SECURITIES ADMINISTRATOR.

         The fees of the Trustee and the Securities Administrator hereunder and
of Wells Fargo under the Custodial Agreement shall be paid in accordance with a
side letter agreement with the Master Servicer and at the sole expense of the
Master Servicer. In addition, the Trustee, the Securities Administrator, the
Custodian and any director, officer, employee or agent of the Trustee, the
Securities Administrator and the Custodian shall be indemnified by the Trust and
held harmless against any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee or the Securities
Administrator in connection with any default administration to be performed by
the Trustee or the Securities Administrator pursuant to this Agreement or other
agreements related hereto and any claim or legal action or any pending or
threatened claim or legal action arising out of or in connection with the
acceptance or administration of its respective obligations and duties under this
Agreement or the Cap Contracts, including other agreements related hereto, other
than any loss, liability or expense (i) for which the Trustee is indemnified by
the Master Servicer, (ii) that constitutes a specific liability of the Trustee
or the Securities Administrator pursuant to Section 10.1(g) or (iii) any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder by reason of reckless
disregard of obligations and duties

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hereunder. The Master Servicer agrees to indemnify the Trustee, from, and hold
the Trustee harmless against, any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred by the Trustee by reason of
the Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of its duties under this Agreement or by reason of the Master
Servicer's reckless disregard of its obligations and duties under this
Agreement. Such indemnity shall survive the termination or discharge of this
Agreement and the resignation or removal of the Trustee. Any payment hereunder
made by the Master Servicer to the Trustee shall be from the Master Servicer's
own funds, without reimbursement from any REMIC therefor.

         Section 8.6 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR.

         The Trustee and the Securities Administrator shall at all times be a
corporation or an association (other than the Depositor, the Seller, the Master
Servicer or any Affiliate of the foregoing) organized and doing business under
the laws of any 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 (or a member of a bank holding company whose capital and
surplus is at least $50,000,000) and subject to supervision or examination by
federal or state authority. If such corporation or association publishes reports
of conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 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 conditions so published. In case at any time the Trustee or the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and with
the effect specified in Section 8.7.

         Section 8.7 RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES
ADMINISTRATOR.

         The Trustee and the Securities Administrator may at any time resign
(including, in the case of the Securities Administrator, in connection with the
resignation or termination of the Master Servicer) and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, to the
Master Servicer, to the Securities Administrator (or the Trustee, if the
Securities Administrator resigns) and to the Certificateholders. Upon receiving
such notice of resignation, the Depositor shall promptly appoint a successor
trustee or successor securities administrator by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee or
Securities Administrator, as applicable, and to the successor trustee or
successor securities administrator, as applicable. A copy of such instrument
shall be delivered to the Certificateholders, the Trustee, the Securities
Administrator and the Master Servicer by the Depositor. If no successor trustee
or successor securities administrator shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator, as the case may
be, may, at the expense of the Trust Fund, petition any court of competent
jurisdiction for the appointment of a successor trustee, successor securities
administrator, Trustee or Securities Administrator, as applicable.

         If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 8.6 and shall fail
to resign after written request therefor by the Depositor, or if at any time the
Trustee or the Securities Administrator shall

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become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or the Securities Administrator or of its property shall
be appointed, or any public officer shall take charge or control of the Trustee
or the Securities Administrator or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor may remove the
Trustee or the Securities Administrator, as applicable and appoint a successor
trustee or successor securities administrator, as applicable, by written
instrument, in duplicate, which instrument shall be delivered to the Trustee or
the Securities Administrator so removed and to the successor trustee or
successor securities administrator.

         The Holders of Certificates evidencing, in aggregate, not less than 51%
of the Certificate Principal Balance of the Certificates may at any time remove
the Trustee or the Securities Administrator and appoint a successor trustee or
successor securities administrator 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 to the Depositor, one
complete set to the Trustee or the Securities Administrator so removed and one
complete set to the successor so appointed. A copy of such instrument shall be
delivered to the Certificateholders, the Trustee (in the case of the removal of
the Securities Administrator), the Securities Administrator (in the case of the
removal of the Trustee) and the Master Servicer by the Depositor. All costs and
expenses incurred by the Trustee in connection with its removal without cause
hereunder shall be reimbursed to it by the Trust Fund.

         Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 8.8.

         Notwithstanding anything to the contrary contained herein, the Master
Servicer and the Securities Administrator shall at all times be the same Person.

         Section 8.8 SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.

         Any successor trustee or successor securities administrator appointed
as provided in Section 8.7 shall execute, acknowledge and deliver to the
Depositor and its predecessor trustee or predecessor securities administrator an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee or predecessor securities administrator
shall become effective and such successor trustee or successor securities
administrator without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee or securities
administrator herein. The predecessor trustee or predecessor securities
administrator shall deliver to the successor trustee or successor securities
administrator all Loan Documents and related documents and statements to the
extent held by it hereunder, as well as all moneys, held by it hereunder, and
the Depositor and the predecessor trustee or predecessor securities
administrator shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee or successor securities administrator all
such rights, powers, duties and obligations.

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<PAGE>

         No successor trustee or successor securities administrator shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee or successor securities administrator shall be eligible
under the provisions of Section 8.6 and the appointment of such successor
trustee or successor securities administrator shall not result in a downgrading
of any Class of Certificates by any Rating Agency, as evidenced by a letter from
each Rating Agency.

         Upon acceptance of appointment by a successor trustee or successor
securities administrator as provided in this Section, the Depositor shall mail
notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.

         Section 8.9 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.

         Any corporation or association into which the Trustee or the Securities
Administrator may be merged or converted or with which it may be consolidated or
any corporation or association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator shall be a
party, or any corporation or association succeeding to the business of the
Trustee or the Securities Administrator shall be the successor of the Trustee or
the Securities Administrator hereunder, provided such corporation or association
shall be eligible under the provisions of Section 8.6, 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.

         Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of a REMIC or property securing the same may at the time be located, the Trustee
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the Trustee to act as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of a REMIC, and to vest in such Person or Persons, in such capacity,
and for the benefit of the Holders of the Certificates, such title to a REMIC,
or any part thereof, and, subject to the other provisions of this Section 8.10,
such powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.6 hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.8 hereof.

         In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and

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<PAGE>

obligations (including the holding of title to a REMIC or any portion thereof in
any such jurisdiction) shall be exercised and performed by such separate trustee
or co-trustee at the direction of the 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 trust 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.

         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 or co-trustee.

         Section 8.11 APPOINTMENT OF OFFICE OR AGENCY.

         The Securities Administrator shall appoint an office or agency in the
City of Minneapolis located at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479, where the Certificates may be surrendered for registration of
transfer or exchange, and presented for final distribution and where notices and
demands to or upon the Securities Administrator in respect of the Certificates
and this Agreement may be served.

         Section 8.12 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.

         The Trustee hereby represents and warrants to the Master Servicer, the
Securities Administrator and the Depositor as applicable, as of the Closing
Date, that:

                  (i) It is a banking corporation duly organized, validly
         existing and in good standing under the laws of the State of New York.

                  (ii) The execution and delivery of this Agreement by it, and
         the performance and compliance with the terms of this Agreement by it,
         will not violate its articles of incorporation or bylaws or constitute
         a default (or an event which, with notice or lapse of time, or both,
         would constitute a default) under, or result in the breach of, any
         material agreement or other instrument to which it is a party or which
         is applicable to it or any of its assets.

                  (iii) It has the full power and authority to enter into and
         consummate all transactions contemplated by this Agreement, has duly
         authorized the execution, delivery and performance of this Agreement,
         and has duly executed and delivered this Agreement.

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<PAGE>

                  (iv) This Agreement, assuming due authorization, execution and
         delivery by the other parties hereto, constitutes a valid, legal and
         binding obligation of it, enforceable against it in accordance with the
         terms hereof, subject to (A) applicable bankruptcy, insolvency,
         receivership, reorganization, moratorium and other laws affecting the
         enforcement of creditors' rights generally, and (B) general principles
         of equity, regardless of whether such enforcement is considered in a
         proceeding in equity or at law.

                  (v) It is not in violation of, and its execution and delivery
         of this Agreement and its performance and compliance with the terms of
         this Agreement will not constitute a violation of, any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local governmental or regulatory authority,
         which violation, in its good faith and reasonable judgment, is likely
         to affect materially and adversely either the ability of it to perform
         its obligations under this Agreement or its financial condition.

                  (vi) No litigation is pending or, to the best of its
         knowledge, threatened against it, which would prohibit it from entering
         into this Agreement or, in its good faith reasonable judgment, is
         likely to materially and adversely affect either the ability of it to
         perform its obligations under this Agreement or its financial
         condition.

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<PAGE>

                                   ARTICLE IX
                                   TERMINATION

                  Section 9.1 TERMINATION UPON PURCHASE OR LIQUIDATION OF LOANS.

         (a) Subject to Section 9.2, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator and the Trustee (other than the obligations of the
Master Servicer to the Securities Administrator pursuant to Section 8.5 and of
the Master Servicer to pay Compensating Interest to the Securities Administrator
and the Securities Administrator to make payments in respect of REMIC Regular
Interests or the Classes of Certificates as hereinafter set forth) shall
terminate upon payment to the Certificateholders and the deposit of all amounts
held by or on behalf of the Trustee and required hereunder to be so paid or
deposited on the Distribution Date coinciding with or following the earlier to
occur of (i) a Group I Cleanup Call, a Group II Cleanup Call and a Group III-VII
Cleanup Call and (ii) the final payment or other liquidation (or any advance
with respect thereto) of the last Loan or REO Property remaining in REMIC I,
REMIC II and REMIC V; PROVIDED, HOWEVER, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of
the United States to the Court of St. James, living on the date hereof.

         (b) The Master Servicer shall have the right (the party exercising such
right, the "Group I Terminator") to purchase all of the Group I Loans and each
Group I REO Property remaining in REMIC I no later than the Determination Date
in the month immediately preceding the Distribution Date on which the Group I
Certificates will be retired (a "Group I Cleanup Call"); PROVIDED, HOWEVER, that
the Group I Terminator may elect to institute a Group I Cleanup Call only if the
aggregate Scheduled Principal Balance of the Group I Loans and each Group I REO
Property remaining in the Trust Fund at the time of such election is less than
10% of the aggregate Scheduled Principal Balance of the Group I Loans as of the
Cut-Off Date.

         (c) The Master Servicer shall have the right (the party exercising such
right, the "Group II Terminator") to purchase all of the Group II Loans and each
Group II REO Property remaining in REMIC II no later than the Determination Date
in the month immediately preceding the Distribution Date on which the Group II
Certificates will be retired (a "Group II Cleanup Call"); PROVIDED, HOWEVER,
that the Group II Terminator may elect to institute a Group II Cleanup Call only
if (a) the aggregate Scheduled Principal Balance of the Group II Loans and each
Group II REO Property remaining in the Trust Fund at the time of such election
is less than 10% of the aggregate Scheduled Principal Balance of the Group II
Loans as of the Cut-Off Date.

         (d) The Master Servicer shall have the right (the party exercising such
right, the "Group III-VII Terminator" and each of the Group I Terminator, Group
II Terminator and Group III-VII Terminator, a "Terminator"), to purchase all of
the Group III-VII Loans and each Group III-VII REO Property remaining in REMIC V
no later than the Determination Date in the month immediately preceding the
Distribution Date on which the Group III-VII Certificates will be retired (a
"Group III-VII Cleanup Call"; any of the Group I Cleanup Call, Group II Cleanup
Call or Group III-VII Cleanup Call, a "Cleanup Call"); PROVIDED, HOWEVER, that
the Group III-VII Terminator may elect to institute a Group III-VII Cleanup
Call, only if the aggregate Scheduled Principal Balance of the Group III-VII
Loans and each Group III-VII REO Property remaining in

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<PAGE>

the Trust Fund at the time of such election is less than 10% of the aggregate
Scheduled Principal Balance of the Group III-VII Loans as of the Cut-Off Date.

         (e) A Group I Cleanup Call, Group II Cleanup Call or Group III-VII
Cleanup Call shall be at a price (each, a "Termination Price") equal to (i) with
respect to a Group I Cleanup Call, the aggregate Purchase Price of all the Group
I Loans and Group I REO Properties included in REMIC I (ii) with respect to a
Group II Cleanup Call, the aggregate Purchase Price of all the Group II Loans
and Group II REO Properties included in REMIC II and (iii) with respect to a
Group III-VII Cleanup Call, the aggregate Purchase Price of all the Group
III-VII Loans and Group III-VII REO Properties include in REMIC V. In the event
of any such Cleanup Call, the related Terminator shall deliver to the Securities
Administrator for deposit in the related Distribution Account not later than the
last Business Day of the month next preceding the month of the final
distribution on the Certificates an amount in immediately available funds equal
to the above-described Termination Price. The Securities Administrator shall
remit (a) to the Master Servicer from such funds deposited in the related
Distribution Account (i) any amounts which the Master Servicer notifies it in
writing that the Master Servicer would be permitted to withdraw and retain from
the related Distribution Account pursuant to Section 3.24 and (ii) any other
amounts otherwise payable by the Securities Administrator to the Master Servicer
from amounts on deposit in the related Distribution Account pursuant to the
terms of this Agreement and notified by the Master Servicer in writing and (b)
to the related Servicer, any amounts reimbursable to such Servicer pursuant to
the related Servicing Agreement, in each case prior to making any final
distributions pursuant to Section 9.1(g) below. Upon certification to the
Trustee and the Securities Administrator by a Servicing Officer of the making of
such final deposit, the Trustee shall promptly release to the related Terminator
the Mortgage Files for the remaining Group I Loans, Group II Loans or Group
III-VII Loans, as applicable, and the Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer in each
case without recourse, representation or warranty.

         (f) Notice of the redemption of Certificates shall be given promptly by
the Securities Administrator by letter to the Certificateholders mailed (a) in
the event such notice is given in connection with a Cleanup Call, not earlier
than the 15th day and not later than the 25th day of the month next preceding
the month of the final distribution on the related Certificates or (b) otherwise
during the month of such final distribution on or before the Determination Date
in such month, in each case specifying (i) the Distribution Date upon which the
Trust Fund will terminate or the related Certificates will be redeemed, as
applicable, and the final payment in respect of the related REMIC Regular
Interests or the related Certificates will be made upon presentation and
surrender of the related Certificates at the office of the Securities
Administrator therein designated, (ii) the amount of any such final payment,
(iii) that no interest shall accrue in respect of the related REMIC Regular
Interests or the related Certificates from and after the related Interest
Accrual Period relating to the final Distribution Date therefor and (iv) that
the Record Date otherwise applicable to such Distribution Date is not applicable
with respect to the related Certificates, payments being made only upon
presentation and surrender of such Certificates at the office of the Securities
Administrator.

         (g) Upon presentation of the Certificates by the Certificateholders on
the related final Distribution Date pursuant to paragraph (f) above, the
Securities Administrator shall distribute to each Certificateholder so
presenting and surrendering its Certificates the amount otherwise distributable
on such Distribution Date in accordance with Section 4.1, Section 4.3 or

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Section 4.5, as applicable, in respect of the Certificates so presented and
surrendered. Any funds not distributed to any Holder or Holders of Certificates
being retired on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 9.1 shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Securities Administrator shall mail
a second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets (related to
the Group I Loans in the case of a Group I Cleanup Call, the Group II Loans in
the case of a Group II Cleanup Call or Group III-VII Loans in the case of a
Group III-VII Cleanup Call) remaining in the trust funds. If within one year
after the final notice any such Certificates shall not have been surrendered for
cancellation, the Securities Administrator shall pay to the Depositor all such
amounts, and all rights of non-tendering Certificateholders in or to such
amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the Securities Administrator as
a result of such Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 9.1. Any such amounts held
in trust by the Securities Administrator shall be held in an Eligible Account
and the Securities Administrator may direct any depository institution
maintaining such account to invest the funds in one or more Eligible
Investments. All income and gain realized from the investment of funds deposited
in such accounts held in trust by the Securities Administrator shall be for the
benefit of the Securities Administrator; PROVIDED, HOWEVER, that the Securities
Administrator shall deposit in such account the amount of any loss of principal
incurred in respect of any such Eligible Investment made with funds in such
accounts immediately upon the realization of such loss.

                  Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the related REMIC shall terminate.

         Section 9.2 ADDITIONAL TERMINATION REQUIREMENTS.

                  (a) In the event of (x) a Group I Cleanup Call, Group II
Cleanup Call or Group III-VII Cleanup Call or (y) the final payment on or other
liquidation of the last Loan or REO Property remaining in REMIC I, REMIC II or
REMIC V pursuant to Section 9.1, in each case, the related REMIC shall be
terminated in accordance with the following additional requirements:

                  (i) The Securities Administrator shall specify the first day
         in the 90-day liquidation period in a statement attached to each
         REMIC's final Tax Return pursuant to Treasury regulation Section
         1.860F-1 and shall satisfy all requirements of a qualified liquidation
         under Section 860F of the Code and any regulations thereunder, as
         evidenced by an Opinion of Counsel obtained by and at the expense of
         the Terminator;

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<PAGE>

                  (ii) During such 90-day liquidation period and, at or prior to
         the time of making of the final payment on the Certificates, the
         Securities Administrator (on behalf of the Trustee) shall sell all of
         the assets of REMIC I, REMIC II or REMIC V, as applicable, to the
         Terminator for cash;

                  (iii) At the time of the making of the final payment on the
         Certificates, the Securities Administrator shall distribute or credit,
         or cause to be distributed or credited, to the Holders of the Residual
         Certificates all cash on hand in the Trust Fund (other than cash
         retained to meet claims), and the Trust Fund shall terminate at that
         time;

                  (iv) If the Trust Fund is being terminated as a result of the
         occurrence of the event described in clause (x) of the first paragraph
         of this Section 9.2, the Final Terminator (as described below), at its
         own expense, shall prepare or cause to be prepared the documentation
         required in connection with the adoption of a plan of liquidation of
         each REMIC pursuant to this Section 9.2. The Final Terminator pursuant
         to this Section 9.2(a)(iv) shall be the (A) Group I Terminator if the
         Group I Cleanup Call occurs later than the Group II Cleanup Call and
         Group III-VII Cleanup Call, (B) the Group II Terminator if the Group II
         Cleanup Call occurs later than the Group I Cleanup Call and Group
         III-VII Cleanup Call, or (C) the Group III-VII Terminator if the Group
         III-VII Cleanup Call occurs later than the Group I Cleanup Call and the
         Group II Cleanup Call; and

                  (v) If the Trust Fund is being terminated as a result of the
         occurrence of the event described in clause (y) of the first paragraph
         of Section 9.2, at the expense of the Trust Fund, the Securities
         Administrator shall prepare or cause to be prepared the documentation
         required in connection with the adoption of a plan of liquidation of
         each related REMIC pursuant to this Section 9.2.

                  (b) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Securities Administrator to specify the 90-day
liquidation period for each REMIC, which authorization shall be binding upon all
successor Certificateholders.

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<PAGE>

                                   ARTICLE X
                                REMIC PROVISIONS

         Section 10.1 REMIC ADMINISTRATION.

                  (a) The Trustee shall elect to treat each REMIC under the Code
and, if necessary, under applicable state law and as instructed by the
Securities Administrator. Each such election shall be made by the Securities
Administrator on Form 1066 or other appropriate federal tax or information
return or any appropriate state return for the taxable year ending on the last
day of the calendar year in which the Certificates are issued. For the purposes
of the REMIC election in respect of REMIC I, the REMIC I Regular Interests shall
be designated as the Regular Interests in REMIC I and Component R-1 shall be
designated as the Residual Interest in REMIC I. The REMIC II Regular Interests
shall be designated as the Regular Interests in REMIC II and Component R-2 shall
be designated as the Residual Interest in REMIC II. The REMIC III Regular
Interests shall be designated as the Regular Interests in REMIC III and
Component R-3 shall be designated as the Residual Interest in REMIC III. The
Group I Certificates and Group II Certificates (other than the Class I/II-R
Certificates) shall be designated as the Regular Interests in REMIC IV and
Component R-4 shall be designated as the Residual Interest in REMIC IV. The
REMIC V Regular Interests shall be designated as the Regular Interests in REMIC
V and Component R-5 shall be designated as the Residual Interest in REMIC V. The
REMIC VI Regular Interests shall be designated as the Regular Interests in REMIC
VI and Component R-6 shall be designated as the Residual Interest in REMIC VI.
The Group III-VII Certificates (other than the Class A-R Certificates) shall be
designated as the Regular Interests in REMIC VII and Component R-7 shall be
designated as the Residual Interest in REMIC VII. The Trustee shall not permit
the creation of any "interests" in each Trust REMIC (within the meaning of
Section 860G of the Code) other than the REMIC I Regular Interests, REMIC II
Regular Interests, REMIC III Regular Interests, REMIC V Regular Interests, REMIC
VI Regular Interests and the interests represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

                  (c) The Securities Administrator shall be reimbursed for any
and all expenses relating to any tax audit of the Trust Fund (including, but not
limited to, any professional fees or any administrative or judicial proceedings
with respect to each REMIC that involve the Internal Revenue Service or state
tax authorities), including the expense of obtaining any tax related Opinion of
Counsel except as specified herein. The Securities Administrator, as agent for
each REMIC's tax matters person shall (i) act on behalf of the Trust Fund in
relation to any tax matter or controversy involving any REMIC and (ii) represent
the Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The holder of the largest Percentage Interest of each class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.

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<PAGE>

                  (d) The Securities Administrator shall prepare and file and
the Trustee shall sign all of the Tax Returns in respect of each REMIC created
hereunder. The expenses of preparing and filing such returns shall be borne by
the Securities Administrator without any right of reimbursement therefor.

                  (e) The Securities Administrator shall perform on behalf of
each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Securities Administrator shall
provide (i) to any Transferor of a Residual Certificate such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Person who is not a Permitted Transferee upon receipt of
additional reasonable compensation, (ii) to the Certificateholders such
information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who shall serve as the representative of each REMIC. The Depositor
shall provide or cause to be provided to the Securities Administrator, within
ten (10) days after the Closing Date, all information or data that the
Securities Administrator reasonably determines to be relevant for tax purposes
as to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.

                  (f) To the extent in the control of the Trustee or the
Securities Administrator, each such Person (i) shall take such action and shall
cause each REMIC created hereunder to take such action as shall be necessary to
create or maintain the status thereof as a REMIC under the REMIC Provisions,
(ii) shall not take any action, cause the Fund to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (A) endanger the status of each
Trust REMIC as a REMIC or (B) result in the imposition of a tax upon the Trust
Fund (including but not limited to the tax on prohibited transactions as defined
in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set
forth in Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless such action or inaction is permitted under this Agreement or the
Trustee and the Securities Administrator have received an Opinion of Counsel,
addressed to them (at the expense of the party seeking to take such action but
in no event at the expense of the Trustee or the Securities Administrator) to
the effect that the contemplated action will not, with respect to any REMIC,
endanger such status or result in the imposition of such a tax, nor (iii) shall
the Securities Administrator take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action; provided that the Securities
Administrator may conclusively rely on such Opinion of Counsel and shall incur
no liability for its action or failure to act in accordance with such Opinion of
Counsel. In addition, prior to taking any action with respect to any REMIC or
the respective assets of each, or causing any REMIC to take any action, which is
not contemplated under the terms of this Agreement, the Securities Administrator
shall consult with the Trustee or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
any REMIC, and the Securities Administrator shall not take any such action or
cause any REMIC to take any such action as to which the Trustee has advised it
in writing that an Adverse REMIC Event could

                                     -172-
<PAGE>

occur. The Trustee may consult with counsel to make such written advice, and the
cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.3 hereof, if
such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Securities Administrator pursuant
to Section 10.3 hereof, if such tax arises out of or results from a breach by
the Securities Administrator of any of its obligations under this Article X,
(iii) to the Master Servicer pursuant to Section 10.3 hereof, if such tax arises
out of or results from a breach by the Master Servicer of any of its obligations
under Article III or under this Article X, or (iv) against amounts on deposit in
the Distribution Account and shall be paid by withdrawal therefrom.

                  (h) The Trustee and the Securities Administrator shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC on a calendar year and on an accrual basis.

                  (i) Following the Startup Day, the Trustee shall not accept
any contributions of assets to any REMIC other than in connection with any
Substitute Loan delivered in accordance with Section 2.3 unless it shall have
received an Opinion of Counsel addressed to it to the effect that the inclusion
of such assets in the Trust Fund will not cause the related REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
such REMIC to any tax under the REMIC Provisions or other applicable provisions
of federal, state and local law or ordinances.

                  (j) Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any Trust REMIC will receive a fee
or other compensation for services nor permit either REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.

                  (k) The Securities Administrator shall apply for an employer
identification number with the Internal Revenue Service via a Form SS-4 or other
comparable method for each REMIC. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.

         Section 10.2 PROHIBITED TRANSACTIONS AND ACTIVITIES.

         None of the Depositor, the Securities Administrator, the Master
Servicer or the Trustee shall sell, dispose of or substitute for any of the
Loans (except in connection with (i) the foreclosure of a Loan, including but
not limited to, the acquisition or sale of a Mortgaged Property acquired by deed
in lieu of foreclosure, (ii) the bankruptcy of a REMIC, (iii) the

                                     -173-
<PAGE>

termination of a REMIC pursuant to Article IX of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of Loans
pursuant to Article II of this Agreement), nor acquire any assets for any REMIC
(other than REO Property acquired in respect of a defaulted Loan), nor sell or
dispose of any investments in the Distribution Account for gain, nor accept any
contributions to any REMIC after the Closing Date (other than a Substitute Loan
delivered in accordance with Section 2.3), unless it has received an Opinion of
Counsel, addressed to the Trustee (at the expense of the party seeking to cause
such sale, disposition, substitution, acquisition or contribution but in no
event at the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of any
REMIC as a REMIC or (b) cause any REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.

         Section 10.3 INDEMNIFICATION.

                  (a) The Trustee agrees to be liable for any taxes and costs
incurred by the Trust Fund, the Depositor, the Securities Administrator or the
Master Servicer including, without limitation, any reasonable attorneys fees
imposed on or incurred by the Trust Fund, the Depositor, the Securities
Administrator or the Master Servicer as a result of the Trustee's failure to
perform its covenants set forth in this Article X in accordance with the
standard of care of the Trustee set forth in this Agreement.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of the Master Servicer's failure
to perform its covenants set forth in Article III in accordance with the
standard of care of the Master Servicer set forth in this Agreement.

                  (c) The Securities Administrator agrees to be liable for any
taxes and costs incurred by the Trust Fund, the Depositor or the Trustee
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor or the Trustee as a result of the
Securities Administrator's failure to perform its covenants set forth in this
Article X in accordance with the standard of care of the Securities
Administrator set forth in this Agreement.

                                     -174-
<PAGE>

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

         Section 11.1 AMENDMENT. This Agreement may be amended from time to
time, by the Depositor, the Master Servicer, the Securities Administrator and
the Trustee, without the consent of any of the Certificateholders, (a) to cure
any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Agreement, (b) to
modify, eliminate or add to any provisions to such extent as shall be necessary
to maintain the qualification of the Trust Fund as seven REMICs at all times
that any Class A, Mezzanine, Class CE, Class B or Class P Certificates are
outstanding, provided, that such action shall not, as evidenced by an Opinion of
Counsel addressed to the Trustee and delivered to the Trustee, adversely affect
in any material respect the interests of any Certificateholder. No amendment
shall be deemed to adversely affect in any material respect the interests of any
Certificateholder who shall have consented thereto, and no Opinion of Counsel
shall be required to address the effect of any such amendment on any such
consenting Certificateholder.

         This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates evidencing, in aggregate, not less than
66-2/3% of the Certificate Principal Balance of the Certificates 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, HOWEVER, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Loans which are required to be distributed on any Certificate without the
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 at least 66-2/3% of the aggregate
Certificate Principal Balance of such Class, or (iii) modify the consents
required by the immediately preceding clauses (i) and (ii) without the consent
of the Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.1, Certificates registered in the name of
the Depositor or the Servicer or any Affiliate thereof shall be entitled to
Voting Rights with respect to matters affecting such Certificates. Without
limiting the generality of the foregoing, any amendment to this Agreement
required in connection with the compliance with or the clarification of any
reporting obligations described in Section 4.8 hereof shall not require the
consent of any Certificateholder and without the need for any Opinion of Counsel
or Rating Agency confirmation.

         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 addressed to it to the effect that such amendment
will not cause any REMIC of the Trust Fund to fail to qualify as a REMIC at any
time that any REMIC Regular Interests or Certificates are outstanding.

         As soon as practicable after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder and Rating Agency.

                                     -175-
<PAGE>

         It shall not be necessary for the consent of the Certificateholders
under this Section 11.1 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.

         Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel addressed to it
stating that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.

         Section 11.2 RECORDATION OF AGREEMENT; COUNTERPARTS. To the extent
permitted by applicable law, this Agreement (or an abstract hereof, if
acceptable by the applicable recording office) 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 Depositor at the expense of
the Certificateholders, but only after the Depositor has delivered to the
Trustee an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

         Section 11.3 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
representatives or heirs to claim an accounting or take any action or proceeding
in any court for a partition or winding up of the Trust Fund, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.

         Except as otherwise expressly provided herein no Certificateholder,
solely by virtue of its status as Certificateholder, shall have any right to
vote 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
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.

         No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision 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 default
and of the continuance thereof, as hereinbefore provided, and unless all of the
Holders of Certificates evidencing, in aggregate, not less than 25% of the Trust
Fund shall have made written request upon 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

                                     -176-
<PAGE>

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 of any provision of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of such
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 benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 11.3, each and
every Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.

         Section 11.4 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES OTHER THAN 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

         Section 11.5 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified or registered mail, return receipt requested
(a) in the case of the Depositor, to 60 Wall Street, New York, New York 10005,
Attention: Deutsche Mortgage Securities, Inc., Mortgage Loan Trust, Series
2004-4, telecopy number: (212) 250-2500, or such other address or telecopy
number as may hereafter be furnished to the Master Servicer and the Trustee in
writing by the Depositor, (b) in the case of the Master Servicer and the
Securities Administrator, P.O. Box 98, Columbia, Maryland 21046 and for
overnight delivery to 9062 Old Annapolis Road, Columbia, Maryland 21045,
Attention: Deutsche Mortgage Securities, Inc., 2004-4 (telecopy number: (410)
715-2380), or such other address or telecopy number as may hereafter be
furnished to the Trustee and the Depositor in writing by the Master Servicer or
the Securities Administrator and (c) in the case of the Trustee, at the
Corporate Trust Office or such other address or telecopy number as the Trustee
may hereafter be furnish to the Master Servicer and the Depositor in writing by
the Trustee. Any notice required or permitted to be given to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given when mailed, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above.

         Section 11.6 SEVERABILITY OF PROVISIONS.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

                                     -177-
<PAGE>

         Section 11.7 NOTICE TO RATING AGENCIES.

         The Trustee shall use its best efforts promptly to provide notice to
the Rating Agencies with respect to each of the following of which it has actual
knowledge:

                  1.       Any material change or amendment to this Agreement;

                  2.       The occurrence of any Master Servicer Event of
                           Default that has not been cured or waived;

                  3.       The resignation or termination of the Master Servicer
                           or the Trustee;

                  4.       The repurchase or substitution of Loans pursuant to
                           or as contemplated by Section 2.3;

                  5.       The final payment to the Holders of any Class of
                           Certificates;

                  6.       Any change in the location of a Distribution Account;
                           and

                  7.       Any event that would result in the inability of the
                           Trustee to make advances regarding delinquent Loans
                           pursuant to Section 7.2.

                  The Master Servicer shall make available to each Rating Agency
copies of the following:

                  1.       Each annual statement as to compliance described in
                           Section 3.16; and

                  2.       Each annual independent public accountants' servicing
                           report described in Section 3.17.

                  Any such notice pursuant to this Section 11.7 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Standard & Poor's, a division of The McGraw-Hill Companies, Inc., 55 Water
Street, New York, New York 10041 and to Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007 or such other addresses as the Rating
Agencies may designate in writing to the parties hereto.

         Section 11.8 ARTICLE AND SECTION REFERENCES.

         All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.

         Section 11.9 GRANT OF SECURITY INTEREST.

         It is the express intent of the parties hereto that the conveyance of
the Loans by the Depositor to the Trustee, on behalf of the Trust Fund and for
the benefit of the Certificateholders, be, and be construed as, a sale of the
Loans by the Depositor and not a pledge of the Loans to secure a debt or other
obligation of the Depositor. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Loans are held to be property of the
Depositor, then, (a) it is the express intent of the parties that such
conveyance be deemed a pledge of the Loans

                                     -178-
<PAGE>

by the Depositor to the Trustee, on behalf of the Trust Fund and for the benefit
of the Certificateholders, to secure a debt or other obligation of the Depositor
and (b)(1) this Agreement shall also be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York; (2) the conveyance provided for in
Section 2.1 hereof shall be deemed to be a grant by the Depositor to the
Trustee, on behalf of the Trust Fund and for the benefit of the
Certificateholders, of a security interest in all of the Depositor's right,
title and interest in and to the Loans and all amounts payable to the holders of
the Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including without limitation all amounts, other
than investment earnings, from time to time held or invested in the Distribution
Accounts, whether in the form of cash, instruments, securities or other
property; (3) the obligations secured by such security agreement shall be deemed
to be all of the Depositor's obligations under this Agreement, including the
obligation to provide to the Certificateholders the benefits of this Agreement
relating to the Loans and the Trust Fund; and (4) notifications to persons
holding such property, and acknowledgments, receipts or confirmations from
persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. Accordingly, the Depositor hereby
grants to the Trustee, on behalf of the Trust Fund and for the benefit of the
Certificateholders, a security interest in the Loans and all other property
described in clause (2) of the preceding sentence, for the purpose of securing
to the Trustee the performance by the Depositor of the obligations described in
clause (3) of the preceding sentence. Notwithstanding the foregoing, the parties
hereto intend the conveyance pursuant to Section 2.1 to be a true, absolute and
unconditional sale of the Loans and assets constituting the Trust Fund by the
Depositor to the Trustee, on behalf of the Trust Fund and for the benefit of the
Certificateholders.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

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

                                 DEUTSCHE MORTGAGE SECURITIES, INC.,
                                 as Depositor

                                 By   /s/ Michael Commaroto
                                      --------------------------------
                                 Name:    Michael Commaroto
                                 Its:     President

                                 By   /s/ Peter Cerwin
                                      --------------------------------
                                 Name:    Peter Cerwin
                                 Its:     Vice-President

                                 WELLS FARGO BANK,
                                 N.A.,
                                 as Master Servicer and Securities Administrator

                                 By   /s/ Stacey Taylor
                                      --------------------------------
                                 Name:    Stacey Taylor
                                 Its:     Assistant Vice President

                                 HSBC BANK USA,  not in its  individual
                                 capacity but solely as Trustee

                                 By:  /s/ Richard Wu
                                      --------------------------------
                                 Name:    Richard Wu
                                 Its:     Vice President

<PAGE>

With Respect to Sections 6.7, 6.8 and 6.9:

THE MURRAYHILL COMPANY

By:   Kevin J. Kanouff
     ---------------------------------
Name:    KEVIN J. KANOUFF
         PRESIDENT AND GENERAL COUNCIL

<PAGE>

STATE OF                )
                        ) ss.:
COUNTY OF               )

                  On the ___ day of May 2004, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of Deutsche Mortgage Securities, 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 said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                          Notary Public

[Notarial Seal]

<PAGE>

STATE OF                   )
                           ) ss.:
COUNTY OF                  )

                  On the ___ day of May 2004, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of Deutsche Mortgage Securities, 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 said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                       Notary Public

[Notarial Seal]

<PAGE>

STATE OF                 )
                         ) ss.:
COUNTY OF                )

                  On the __ day of May 2004, before me, a notary public in and
for said State, personally appeared ___________________________ known to me to
be a ____________________ of Wells Fargo Bank, N.A., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                     Notary Public

[Notarial Seal]

<PAGE>

STATE OF                   )
                           ) ss.:
COUNTY OF                  )

                  On the ___ day of May 2004, before me, a notary public in and
for said State, personally appeared _______________ known to me to be a
_______________ of HSBC Bank USA, one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                    Notary Public

[Notarial Seal]

<PAGE>

                                   EXHIBIT A-1
                  FORM OF CLASS A CERTIFICATES (OTHER THAN THE
                     CLASS I-A-IO AND VII-AR-3 CERTIFICATES)

 CLASS [[I][II][III][IV][V][VI][VII]]-[[A][AR]]-[[1][2][3][4][5][6]] CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AS DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES
ADMINISTRATOR NAMED HEREIN.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

<PAGE>

<TABLE>
<CAPTION>
<S>                                                   <C>
Certificate No. [1]                                   Pass-Through Rate: [___ %][Variable]
                                                      [Adjustable]

Class [[I][II][III][IV][V][VI][VII]]-[[A][AR]]-
[[1][2][3][4][5][6]] Senior                           Percentage Interest: _____

Date of Pooling and Servicing Agreement and           Aggregate Initial Certificate Principal Balance of
Cut-Off Date:                                         this Class as of the Cut-Off Date:
May 1, 2004                                           $

First Distribution Date:                              Initial Certificate Principal Balance of this
June 25, 2004                                         Certificate as of the Cut-Off Date:
                                                      $___________

Master Servicer:
Wells Fargo Bank, N.A.                                CUSIP: ___________

Final Distribution Date:
[April][June] 2034
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-4

                  evidencing a fractional undivided interest in
                  the distributions allocable to the Class [[I]
                  [II][III][IV][V][VI][VII]]-[[A][AR]]-[[1][2]
                  [3][4][5][6]] Certificates with respect to a
                  trust fund consisting primarily of a pool of
                  conventional one- to four-family fixed and
                  adjustable interest rate mortgage loans secured
                  by one- to four- family residences, units in
                  planned unit developments and individual
                  condominium units (the "Trust Fund") sold by
                  DEUTSCHE MORTGAGE SECURITIES, INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group [I][II][III-VII] Loans are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                                      A-1-2

<PAGE>

                  This certifies that [Cede & Co.] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in certain assets of the
Trust Fund generally consisting of the Group [I][II][III-VII] Loans and related
assets sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group
[I][II][III-VII] Loans were sold by DB Structured Products, Inc. to DMSI. Wells
Fargo Bank, N.A. will act as master servicer of the Group [I][II][III-VII] Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-Off Date specified above (the
"Agreement"), among DMSI, as depositor (the "Depositor"), Wells Fargo Bank,
N.A., as Master Servicer and securities administrator (the "Securities
Administrator") and HSBC Bank USA, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  [[GROUP I SENIOR CERTIFICATES, OTHER THAN THE CLASS I-A-1 AND
CLASS I-A-IO CERTIFICATES:]The Pass-Through Rate applicable to the calculation
of interest payable with respect to this Certificate on any Distribution Date
(as hereinafter defined) shall be a rate per annum equal to the lesser of (i)
[___]% [[CLASS I-A-5 AND I-A-6 CERTIFICATES:], provided, however, such rate
shall be increased by 0.50% on the Distribution Date following the Distribution
Date on which the aggregate principal balance of the Group I Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Group I Loans as of
the Cut-off Date] and (ii) the applicable Net WAC Pass-Through Rate for such
Distribution Date. The Securities Administrator will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the calendar
month immediately preceding the month of such Distribution Date, an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. Any such
distributions will be made by wire transfer in immediately available funds to
the account of such Person or by any other means of payment acceptable to such
Person. The last scheduled Distribution Date is the Distribution Date in the
month specified above as the Final Distribution Date.]

                  [[CLASS I-A-1 AND GROUP II SENIOR CERTIFICATES:] The
Pass-Through Rate applicable to the calculation of interest payable with respect
to this Certificate on any Distribution Date (as hereinafter defined) shall be a
rate per annum equal to the lesser of (i) One-Month LIBOR plus [_____]% [[GROUP
II SENIOR CERTIFICATES:], in the case of each Distribution Date through and
including the Distribution Date on which the aggregate principal balance of the
Group II Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate principal balance of the
Group II Loans as of the Cut-off Date, or One-Month LIBOR plus [_____]%, in the
case of any Distribution Date thereafter] and (ii) the applicable Net WAC
Pass-Through Rate for such Distribution Date. The Securities Administrator will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following

                                      A-1-3

<PAGE>

Business Day (each, a "Distribution Date"), commencing on the First Distribution
Date specified above, to the Person in whose name this Certificate is registered
at the close of business on the Business Day immediately preceding such
Distribution Date, an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. Any such distributions will be made by wire transfer in
immediately available funds to the account of such Person or by any other means
of payment acceptable to such Person. The last scheduled Distribution Date is
the Distribution Date in the month specified above as the Final Distribution
Date.]

                  [[CLASS III-AR-1, IV-AR-1, V-AR-1 AND VI-AR-1
CERTIFICATES:]The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date (as
hereinafter defined) shall be a rate per annum equal to the excess of the
weighted average of the Net Mortgage Rates of the Group [III][IV][V][VI] Loans
(weighted on the basis of the Principal Balance of the Group [III][IV][V][VI]
Loans) as of the Due Date in the month prior to the month in which the related
Distribution Date occurs, after taking into account scheduled payments of
principal received or advanced on that date. The Securities Administrator will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the calendar month immediately preceding the month of such
Distribution Date, an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. Any such distributions will be made by wire transfer in
immediately available funds to the account of such Person or by any other means
of payment acceptable to such Person. The last scheduled Distribution Date is
the Distribution Date in the month specified above as the Final Distribution
Date.]

                  [[CLASS VII-AR-1 AND VII-AR-2 CERTIFICATES:] The Pass-Through
Rate applicable to the calculation of interest payable with respect to this
Certificate on any Distribution Date (as hereinafter defined) shall be a rate
per annum equal to the lesser of (i) One-Month LIBOR plus [_____]% and (ii) the
weighted average of the Net Mortgage Rates of the Group VII-[1][2] loans for
such Distribution Date. The Securities Administrator will distribute on the 25th
day of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the Business Day immediately preceding
such Distribution Date, an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. Any such distributions will be made by wire
transfer in immediately available funds to the account of such Person or by any
other means of payment acceptable to such Person. The last scheduled
Distribution Date is the Distribution Date in the month specified above as the
Final Distribution Date.]

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities

                                      A-1-4

<PAGE>

Administrator for that purpose and designated in such notice. The initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon as described in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder, and
that none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other

                                      A-1-5

<PAGE>

governmental charge payable in connection therewith. The Depositor, the Master
Servicer, the Securities Administrator, the Trustee and any agent of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Securities Administrator, the Trustee or any such agent shall be affected by
notice to the contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
Group [I and Group II][III-VII] Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Group [I and Group II][III-VII] Loans or (ii) the optional repurchase by the
party named in the Agreement of all the Group [I][II][III-VII] Loans and other
related assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only on or after the Distribution Date on
which the aggregate Scheduled Principal Balance of the Group [I][II][III-VII]
Loans is less than the percentage of the aggregate Scheduled Principal Balance
specified in the Agreement of the Group [I][II][III-VII] Loans at the Cut-Off
Date. The exercise of such right will effect the early retirement of this
Certificate. In no event will the Trust Fund created by the Agreement continue
beyond the expiration of 21 years after the death of certain persons identified
in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.

                                      A-1-6

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                      Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class
[[I][II][III][IV][V][VI][VII]]-[[A][AR]]-[[1][2][3][4][5][6]] Certificates
referred to in the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                      Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                __________________________________________________________
                               Signature by or on behalf of assignor

                                 _______________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

                                      A-1-8

<PAGE>

                                   EXHIBIT A-2

                         FORM OF CLASS A-IO CERTIFICATES

                      CLASS [I-A-IO][VII-AR-3] CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

<PAGE>

<TABLE>
<CAPTION>
<S>                                          <C>
Certificate No. [1]                          Pass-Through Rate: Variable

Class [I-A-IO][VII-AR-3]                     Percentage Interest: _____

Date of Pooling and Servicing Agreement      Aggregate Initial Notional Amount of this Class as
and Cut-Off Date:                            of the Cut-Off Date:
May 1, 2004                                  $___________

First Distribution Date:                     Initial Notional Amount of this Certificate as of the
June 25, 2004                                Cut-Off Date:
                                             $___________

Master Servicer:
Wells Fargo Bank, N.A.

Final Distribution Date:
[May 25, 2006][June 25, 2034]                CUSIP: ___________
</TABLE>

                  MORTGAGE PASS-THROUGH CERTIFICATE
                            SERIES 2004-4

                  evidencing a fractional undivided interest in
                  the distributions allocable to the Class
                  [I-A-IO][VII-AR-3] Certificates with respect
                  to a trust fund consisting primarily of a pool
                  of conventional one- to four-family fixed and
                  adjustable interest rate mortgage loans secured
                  by one- to four- family residences, units in
                  planned unit developments and individual
                  condominium units (the "Trust Fund") sold by
                  DEUTSCHE MORTGAGE SECURITIES, INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group [I][III-VII] Loans are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that [Cede & Co.] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate

                                      A-2-2

<PAGE>

in certain assets of the Trust Fund generally consisting of the Group
[I][III-VII] Loans and related assets sold by Deutsche Mortgage Securities, Inc.
("DMSI"). The Group [I][III-VII] Loans were sold by DB Structured Products, Inc.
to DMSI. Wells Fargo Bank, N.A. will act as master servicer of the Group
[I][III-VII] Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the Cut-Off Date
specified above (the "Agreement"), among DMSI, as depositor (the "Depositor"),
Wells Fargo Bank, N.A., as Master Servicer and securities administrator (the
"Securities Administrator") and HSBC Bank USA, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  [[WITH RESPECT TO THE CLASS I-A-IO CERTIFICATES:] The
Pass-Through Rate applicable to the calculation of interest payable with respect
to this Certificate on any Distribution Date (as hereinafter defined) shall be a
rate per annum equal to (i) 4.50% with respect the first twelve Distribution
Dates following the Closing Date, (ii) 3.50% with respect to the next twelve
Distribution Dates and (iii) 0.00% thereafter.] [[WITH RESPECT TO THE CLASS
VII-AR-3 CERTIFICATES:] The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date (as
hereinafter defined) shall be a rate per annum equal to the excess of the
weighted average of the Net Mortgage Rates of the Group VII Loans on such
Distribution Date over the weighted average of the Pass-Through Rates on the
Class VII-AR-1 and Class VII-AR-2 Certificates on such Distribution Date.] The
Securities Administrator will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the calendar month preceding
the month of such Distribution Date, an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. Any such distributions will be made by wire transfer in
immediately available funds to the account of such Person or by any other means
of payment acceptable to such Person. The last scheduled Final Distribution Date
is the Distribution Date specified above.

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The Class [I-A-IO][VII-AR-3]
Certificates have no Certificate Principal Balance. The initial Notional Amount
of this Certificate is set forth above.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder, and
that none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount

                                      A-2-3

<PAGE>

payable under this Certificate or the Agreement or, except as expressly provided
in the Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
Group [I and Group II]][III-VII] Loan

                                      A-2-4

<PAGE>

remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Group [I Group II]][III-VII]
Loans or (ii) the optional repurchase by the party named in the Agreement of all
the Group [I][III-VII] Loans and other related assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only on or after the Distribution Date on which the aggregate Scheduled
Principal Balance of the Group [I][III-VII] Loans is less than the percentage of
the aggregate Scheduled Principal Balance specified in the Agreement of the
Group [I][III-VII] Loans at the Cut-Off Date. The exercise of such right will
effect the early retirement of this Certificate. In no event will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.

                                      A-2-5

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class [I-A-IO][VII-AR-3] Certificates
referred to in the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                     Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass- Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                __________________________________________________________
                               Signature by or on behalf of assignor

                                 _______________________________________________
                                                Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-3

                 FORM OF GROUP I MEZZANINE, GROUP II MEZZANINE,
                  CLASS M, CLASS B-1 AND CLASS B-2 CERTIFICATES

             CLASS [M][[I-M][II-MR]-[1][2][3]][B-1][B-2] CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
[GROUP I][GROUP II][GROUP III-VII] SENIOR CERTIFICATES [AND][,][ THE CLASS [I-
M-1][II-MR-1][M] CERTIFICATES, [AND] THE CLASS [I-M-2][II-MR-2][B-1]
CERTIFICATES], AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND CERTAIN LOSSES ALLOCABLE HERETO
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING
THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF
THE SECURITIES ADMINISTRATOR NAMED HEREIN.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

                  ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.3(E) OF THE AGREEMENT REFERRED TO HEREIN.

<PAGE>

<TABLE>
<CAPTION>
<S>                                          <C>
Certificate No. [1]                          Pass-Through Rate:   [___%][Variable]
                                             [Adjustable]

Class [M][I-M][II-MR]-[1][2][3][B-1][B-2]    Percentage Interest: _____

Date of Pooling and Servicing Agreement      Aggregate Initial Certificate Principal Balance of
and Cut-Off Date:                            this Class as of the Cut-Off Date:
May 1, 2004                                  $___________

First Distribution Date:                     Initial Certificate Principal Balance of this
June 25, 2004                                Certificate as of the Cut-Off Date:
                                             $___________

Master Servicer:
Wells Fargo Bank, N.A.                       CUSIP: ___________

Final Distribution Date:
[April][June] 2034
</TABLE>

                  MORTGAGE PASS-THROUGH CERTIFICATE
                            SERIES 2004-4

                  evidencing a fractional undivided interest in
                  the distributions allocable to the Class [M]
                  [[I-M][II-MR]-[1][2][3]][B-1][B-2] Certificates
                  with respect to a trust fund consisting
                  primarily of a pool of conventional one- to
                  four-family fixed and adjustable interest rate
                  mortgage loans secured by one- to four- family
                  residences, units in planned unit developments
                  and individual condominium units (the "Trust
                  Fund") sold by DEUTSCHE MORTGAGE SECURITIES,
                  INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group [I][II][III-VII] Loans are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that [Cede & Co.] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in certain assets of the
Trust Fund generally consisting of the Group [I][II][III-VII] Loans

                                      A-3-2

<PAGE>

and related assets sold by Deutsche Mortgage Securities, Inc. ("DMSI"). Wells
Fargo Bank, N.A. will act as master servicer of the Group [I][II][III-VII] Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-Off Date specified above (the
"Agreement"), among DMSI, as depositor (the "Depositor"), Wells Fargo Bank,
N.A., as Master Servicer and securities administrator (the "Securities
Administrator") and HSBC Bank USA, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  [[GROUP I MEZZANINE CERTIFICATES:]The Pass-Through Rate
applicable to the calculation of interest payable with respect to this
Certificate on any Distribution Date (as hereinafter defined) shall be a rate
per annum equal to the lesser of (i) [___]%; provided, however, such rate shall
be increased to ____% on each Distribution Date (as hereinafter defined)
following the Distribution Date on which the aggregate principal balance of the
Group I Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate principal balance of the
Group I Loans as of the Cut-off Date and (ii) the applicable Net WAC
Pass-Through Rate for such Distribution Date. The Securities Administrator will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the calendar month preceding the month of such Distribution
Date, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. Any such distributions will be made by wire transfer in immediately
available funds to the account of such Person or by any other means of payment
acceptable to such Person. The last scheduled Distribution Date is the
Distribution Date in the month specified above as the Final Distribution Date.]

                  [[GROUP II MEZZANINE CERTIFICATES:] The Pass-Through Rate
applicable to the calculation of interest payable with respect to this
Certificate on any Distribution Date (as hereinafter defined) shall be a rate
per annum equal to the lesser of (i) One-Month LIBOR plus [_____]%, in the case
of each Distribution Date through and including the Distribution Date on which
the aggregate principal balance of the Group II Loans (and properties acquired
in respect thereof) remaining in the Trust Fund is reduced to less than 10% of
the aggregate principal balance of the Group II Loans as of the Cut-off Date, or
One-Month LIBOR plus [_____]%, in the case of any Distribution Date thereafter
and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.
The Securities Administrator will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the Business Day immediately preceding such
Distribution Date, an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. Any such distributions will be made by wire transfer in
immediately available funds to the account of such Person or by any

                                      A-3-3

<PAGE>

other means of payment acceptable to such Person. The last scheduled
Distribution Date is the Distribution Date in the month specified above as the
Final Distribution Date.]

[[CLASS M, B-1 AND B-2 CERTIFICATES:]The Pass-Through Rate applicable to the
calculation of interest payable with respect to this Certificate on any
Distribution Date (as hereinafter defined) shall be a rate per annum equal to
(1) the sum of the following with respect to each Group III-VIII Loan Group: the
product of (x) the weighted average Net Mortgage Rate of the related Loans and
(y) the excess of the aggregate principal balance of the related Group III-VII
Loans over the aggregate Certificate Principal Balance of the related Group
III-VII Senior Certificates immediately prior to that Distribution Date, divided
by (2) the aggregate Certificate Principal Balance of the Group III-VII
Subordinated Certificates immediately prior to that Distribution Date. The
Securities Administrator will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the calendar month preceding
the month of such Distribution Date, an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to the Holders of Certificates
of the same Class as this Certificate. Any such distributions will be made by
wire transfer in immediately available funds to the account of such Person or by
any other means of payment acceptable to such Person. The last scheduled
Distribution Date is the Distribution Date in the month specified above as the
Final Distribution Date.]

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto as
described in the Agreement.

                  Any transferee of this Certificate shall be deemed to make the
representations set forth in section 5.3(e) of the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                                      A-3-4

<PAGE>

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Trustee, the Securities Administrator and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
Group [I and Group II][III-VII] Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Group [I and Group II][III-VII] Loans or (ii) the optional repurchase by the
party named in the Agreement of all the Group [I][II][III-VII] Loans and other
related assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only on or after the Distribution Date on
which the aggregate Scheduled Principal Balance of the Group [I][II][III-VII]
Loans is less than the percentage of the aggregate Scheduled Principal Balance
specified in the Agreement of the Group [I][II][III-VII] Loans at the Cut-Off
Date. The exercise of such right will effect the early retirement of this
Certificate. In no event will the Trust Fund created

                                      A-3-5

<PAGE>

by the Agreement continue beyond the expiration of 21 years after the death of
certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.

                                      A-3-6

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class [M][[I-M][II-MR]-[1][2][3]][B-1][B-2]
Certificates referred to in the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                     Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                __________________________________________________________
                               Signature by or on behalf of assignor

                                 _______________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                           The assignee should include the following for
purposes of distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                  EXHIBIT A-4-A

                FORM OF DEFINITIVE CLASS B-[3][4][5] CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
GROUP III-VII SENIOR CERTIFICATES, THE CLASS M CERTIFICATES, THE CLASS B-1
CERTIFICATES [AND][,] THE CLASS B-2 CERTIFICATES, [[AND] THE CLASS B-[3][4]
CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND CERTAIN LOSSES ALLOCABLE HERETO
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING
THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF
THE SECURITIES ADMINISTRATOR NAMED HEREIN.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE
AGREEMENT REFERRED TO HEREIN.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3(C) OF THE AGREEMENT.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 5.3(E) OF THE
AGREEMENT.

                                     A-4-A-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                          <C>
Certificate No.1                             Pass-Through Rate: Variable

Class B-[3][4][5]                            Percentage Interest:   %

Date of Pooling and Servicing Agreement      Aggregate Initial Certificate Principal Balance of
and Cut-off Date:                            this Certificate as of the Cut-off Date:
May 1, 2004                                  $___________

First Distribution Date:                     Initial Certificate Principal Balance of this
June 25, 2004                                Certificate as of the Cut-off Date: $___________

Master Servicer:
Wells Fargo Bank, N.A.

Final Distribution Date:
June 25, 2034
</TABLE>

                  MORTGAGE PASS-THROUGH CERTIFICATE
                            SERIES 2004-4

                  evidencing a fractional undivided interest in
                  the distributions allocable to the Class
                  B-[3][4][5] Certificates with respect to a
                  trust fund consisting primarily of a pool of
                  conventional one- to four-family fixed and
                  adjustable interest rate mortgage loans secured
                  by one- to four-family residences, units in
                  planned unit development and individual
                  condominium units (the "Trust Fund") sold by
                  DEUTSCHE MORTGAGE SECURITIES, INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group III-VII Loans are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that [Cede & Co.] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in certain assets of the
Trust Fund generally consisting of the Group III-VII Loans and related assets
sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group III-VII Loans
were

                                     A-4-A-2

<PAGE>

sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will act as
master servicer of the Group III-VII Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among DMSI, as depositor
(the "Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date (as
hereinafter defined) shall be a rate per annum equal to (1) the sum of the
following with respect to each Group III-VIII Loan Group: the product of (x) the
weighted average Net Mortgage Rate of the related Loans and (y) the excess of
the aggregate principal balance of the related Group III-VII Loans over the
aggregate Certificate Principal Balance of the related Group III-VII Senior
Certificates immediately prior to that Distribution Date, divided by (2) the
aggregate Certificate Principal Balance of the Group III-VII Subordinated
Certificates immediately prior to that Distribution Date. The Securities
Administrator will distribute on the 25th day of each month, or, if such 25th
day is not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the calendar month preceding the month of
such Distribution Date, an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. Any such distributions will be made by wire
transfer in immediately available funds to the account of such Person or by any
other means of payment acceptable to such Person. The last scheduled
Distribution Date is the Distribution Date in the month specified above as the
Final Distribution Date.

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto as
described in the Agreement.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, pursuant to the Agreement the Securities
Administrator shall require receipt of written certifications from the Holder of
the Certificate desiring to effect the transfer, and from such Holder's
prospective transferee, substantially in the forms attached to the Agreement as
Exhibit D and either Exhibit E, Exhibit F, or Exhibit H-1, as applicable. None
of the Depositor, the Securities Administrator or the Trustee is obligated to

                                                      A-4-A-3

<PAGE>

register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Securities
Administrator, 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 this Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received a
representation letter, in the form as described by Section 5.3(e) of the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject

                                     A-4-A-4

<PAGE>

to certain limitations therein set forth, this Certificate is exchangeable for
one or more new Certificates evidencing the same Class and in the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement, coinciding with or following
the earlier to occur of (i) the maturity or other liquidation (or Advance with
respect thereto) of the last Group III-VII Loan remaining in the Trust Fund and
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Group III-VII Loan sor (ii) the optional repurchase by the
party named in the Agreement of all the Group III-VII Loans and other related
assets of the Trust Fund in accordance with the terms of the Agreement. Such
optional repurchase may be made only on or after the Distribution Date on which
the aggregate Stated Principal Balance of the Group III-VII Loans is less than
the percentage of the aggregate Scheduled Principal Balance specified in the
Agreement of the Group III-VII Loans at the Cut-off Date. The exercise of such
right will effect the early retirement of the Certificates. In no event,
however, will the Trust Fund created by the Agreement continue beyond the
expiration of 21 years after the death of certain persons identified in the
Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.

                                     A-4-A-5

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                   Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class B-[3][4][5] Certificates referred to
in the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                     Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                __________________________________________________________
                            Signature by or on behalf of assignor

                                 _______________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-4-B

                   FORM OF REGULATION S [TEMPORARY][PERMANENT]
                      GLOBAL CLASS B-[3][4][5] CERTIFICATE

                  [THIS CERTIFICATE IS A REGULATION S TEMPORARY GLOBAL
CERTIFICATE FOR PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). PRIOR TO THE DATE THAT IS 40 DAYS
AFTER THE LATER OF (I) THE COMMENCEMENT OF THE OFFERING OF THE OFFERED
CERTIFICATES AND (II) THE CLOSING DATE, THIS CERTIFICATE MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.]

                  [NO BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL
CERTIFICATE SHALL BE ENTITLED TO RECEIVE PAYMENTS OF PRINCIPAL OR INTEREST
HEREIN UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE
TERMS OF THE AGREEMENT (AS DEFINED HEREIN).]

                  [THE HOLDER OF THIS REGULATION S PERMANENT GLOBAL CERTIFICATE
BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
CERTIFICATE WITHIN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) PRIOR TO THE DATE WHICH IS THE LATER OF
(I) 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND (II) THE DATE ON WHICH THE
REQUISITE CERTIFICATIONS ARE DUE TO AND PROVIDED TO THE TRUSTEE AND SECURITIES
ADMINISTRATOR PURSUANT TO THE AGREEMENT (AS DEFINED BELOW), EXCEPT PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]

              UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
GROUP III-VII SENIOR CERTIFICATES, THE CLASS M CERTIFICATES, THE CLASS B-1
CERTIFICATES [AND][,] THE CLASS B-2 CERTIFICATES, [[AND] THE CLASS B-[3][4]
CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

<PAGE>

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND CERTAIN LOSSES ALLOCABLE HERETO
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING
THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF
THE SECURITIES ADMINISTRATOR NAMED HEREIN.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE
AGREEMENT REFERRED TO HEREIN.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3(C) OF THE AGREEMENT.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 5.3 (E).

                                     A-4-B-2

<PAGE>

<TABLE>
<CAPTION>
<S>                                         <C>
Certificate No.1                            Pass-Through Rate: Variable

Class B-[3][4][5]                           Percentage Interest:   %

Date of Pooling and Servicing Agreement     Aggregate Initial Certificate Principal Balance of
and Cut-off Date:                           this Certificate as of the Cut-off Date:
May 1, 2004                                 $___________

First Distribution Date:                    Initial Certificate Principal Balance of this
June 25, 2004                               Certificate as of the Cut-off Date: $___________

Master Servicer:
Wells Fargo Bank, N.A.

Final Distribution Date:
June 25, 2034
</TABLE>

                  MORTGAGE PASS-THROUGH CERTIFICATE
                            SERIES 2004-4

                  evidencing a fractional undivided interest in
                  the distributions allocable to the Class
                  B-[3][4][5] Certificates with respect to a
                  trust fund consisting primarily of a pool of
                  conventional one- to four-family fixed and
                  adjustable interest rate mortgage loans secured
                  by one- to four-family residences, units in
                  planned unit development and individual
                  condominium units (the "Trust Fund") sold by
                  DEUTSCHE MORTGAGE SECURITIES, INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group III-VII Loans are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that [____________] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in certain assets of the
Trust Fund generally consisting of the Group III-VII Loans and related assets
sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group III-VII Loans
were

                                     A-4-B-3

<PAGE>

sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will act as
master servicer of the Group III-VII Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among DMSI, as depositor
(the "Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date (as
hereinafter defined) shall be a rate per annum equal to (1) the sum of the
following with respect to each Group III-VIII Loan Group: the product of (x) the
weighted average Net Mortgage Rate of the related Loans and (y) the excess of
the aggregate principal balance of the related Group III-VII Loans over the
aggregate Certificate Principal Balance of the related Group III-VII Senior
Certificates immediately prior to that Distribution Date, divided by (2) the
aggregate Certificate Principal Balance of the Group III-VII Subordinated
Certificates immediately prior to that Distribution Date. The Securities
Administrator will distribute on the 25th day of each month, or, if such 25th
day is not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the calendar month preceding the month of
such Distribution Date, an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. Any such distributions will be made by wire
transfer in immediately available funds to the account of such Person or by any
other means of payment acceptable to such Person. The last scheduled
Distribution Date is the Distribution Date in the month specified above as the
Final Distribution Date.]

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto as
described in the Agreement.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, pursuant to the Agreement the Securities
Administrator shall require receipt of written certifications from the Holder of
the Certificate desiring to effect the transfer, and from such Holder's
prospective transferee, substantially in the forms attached to the Agreement as
Exhibit D and either Exhibit E, Exhibit F, or Exhibit H-1, as applicable. None
of the Depositor, the Securities Administrator or the Trustee is obligated to

                                                      A-4-B-4

<PAGE>

register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Securities
Administrator, 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 this Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received a
representation letter, in the form as described by Section 5.3(e) of the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject

                                     A-4-B-5

<PAGE>

to certain limitations therein set forth, this Certificate is exchangeable for
one or more new Certificates evidencing the same Class and in the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement, coinciding with or following
the earlier to occur of (i) the maturity or other liquidation (or Advance with
respect thereto) of the last Group III-VII Loan remaining in the Trust Fund and
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Group III-VII Loans or (ii) the optional repurchase by the
party named in the Agreement of all the Group III-VII Loans and other related
assets of the Trust Fund in accordance with the terms of the Agreement. Such
optional repurchase may be made only on or after the Distribution Date on which
the aggregate Stated Principal Balance of the Group III-VII Loans is less than
the percentage of the aggregate Scheduled Principal Balance specified in the
Agreement of the Group III-VII Loans at the Cut-off Date. The exercise of such
right will effect the early retirement of the Certificates. In no event,
however, will the Trust Fund created by the Agreement continue beyond the
expiration of 21 years after the death of certain persons identified in the
Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.

                                     A-4-B-6

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class B-[3][4][5] Certificates referred to
in the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                     Authorized Signatory

                                     A-4-B-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                __________________________________________________________
                              Signature by or on behalf of assignor

                                 _______________________________________________
                                                Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-5

                          FORM OF CLASS CE CERTIFICATES

                          CLASS [I][II]-CE CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
GROUP [I][II] SENIOR CERTIFICATES AND THE GROUP [I][II] MEZZANINE CERTIFICATES,
AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  DISTRIBUTIONS ON THIS CERTIFICATE MAY BE MADE MONTHLY AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN AS THE DENOMINATION OF THIS
CERTIFICATE.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE
AGREEMENT REFERRED TO HEREIN.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3(C) OF THE AGREEMENT.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(E)
OF THE AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(E) OF THE AGREEMENT
THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE DEPOSITOR, THE
MASTER SERVICER, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE
TRUST FUND TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.

<PAGE>

<TABLE>
<CAPTION>
<S>                                         <C>
Certificate No. [1]

Class [I][II]-CE                            Percentage Interest: _____

Date of Pooling and Servicing Agreement     Aggregate Initial Certificate Principal Balance of
and Cut-Off Date:                           this Class as of the Cut-Off Date:
May 1, 2004                                 $_________

First Distribution Date:                    Initial Certificate Principal Balance of this
June 25, 2004                               Certificate as of the Cut-Off Date: $__________

Master Servicer:
Wells Fargo Bank, N.A.

Final Distribution Date:
[April][June] 2034
</TABLE>

                  MORTGAGE PASS-THROUGH CERTIFICATE
                            SERIES 2004-4

                  evidencing a fractional undivided interest in
                  the distributions allocable to the Class
                  [I][II]-CE Certificates with respect to a trust
                  fund consisting primarily of a pool of
                  conventional one- to four-family fixed and
                  adjustable interest rate mortgage loans secured
                  by one- to four- family residences, units in
                  planned unit developments and individual
                  condominium units (the "Trust Fund") sold by
                  DEUTSCHE MORTGAGE SECURITIES, INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group [I][II] Loans are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that [_____________] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in certain assets of the
Trust Fund generally consisting of the Group [I][II] Loans and related assets
sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group [I][II] Loans
were sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will
act as master servicer

                                      A-5-2

<PAGE>

of the Group [I][II] Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-Off
Date specified above (the "Agreement"), among DMSI, as depositor (the
"Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  The Securities Administrator will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the calendar
month preceding the month of such Distribution Date, an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. Any such distributions will be made by wire transfer in
immediately available funds to the account of such Person or by any other means
of payment acceptable to such Person. The last scheduled Distribution Date is
the Distribution Date in the month specified above as the Final Distribution
Date.

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions
allocable to principal hereon and Realized Losses allocable hereto as described
in the Agreement.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) written certifications from the Holder of the Certificate
desiring to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit D and either
Exhibit E or Exhibit F, as applicable, or (ii) an Opinion of Counsel reasonably
satisfactory to the Trustee, the Depositor and the Securities Administrator that
such transfer may be made without such registration or qualification (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee, the Securities Administrator, the Master Servicer or any
Servicer in their respective capacities as such), together with copies of the
written certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Master Servicer, the Securities
Administrator or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates

                                      A-5-3

<PAGE>

without registration or qualification. Any Holder desiring to effect a transfer
of this Certificate shall be required to indemnify the Trustee, the Securities
Administrator, 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 this Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received either (i)
an opinion of counsel under Section 5.3(e) of the Agreement stating, among other
things, that the transferee's acquisition of a Class [I][II]-CE Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code (the "Code") and will not subject the Depositor, the Trustee, the
Securities Administrator, the Master Servicer, any Servicer or the Trust Fund to
any obligation or liability in addition to those undertaken in the Agreement or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities

                                      A-5-4

<PAGE>

Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Trustee, the Securities Administrator and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
Group [I][II] Loan remaining in the Trust Fund and disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Group [I]II]
Loans or (ii) the optional repurchase by the party named in the Agreement of all
the Group [I][II] Loans and other related assets of the Trust Fund in accordance
with the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate Scheduled Principal Balance
of the Group [I][II] Loans is less than the percentage of the aggregate
Scheduled Principal Balance specified in the Agreement of the Group [I][II]
Loans at the Cut-Off Date. The exercise of such right will effect the early
retirement of this Certificate. In no event will the Trust Fund created by the
Agreement continue beyond the expiration of 21 years after the death of certain
persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.

                                      A-5-5

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                  Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class [I][II]-CE Certificates referred to
in the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                    Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                __________________________________________________________
                                Signature by or on behalf of assignor

                                 _______________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-6

                          FORM OF CLASS P CERTIFICATES

                       FORM OF CLASS [I][II]-P CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE
AGREEMENT REFERRED TO HEREIN.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE AGREEMENT.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(E)
OF THE AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(E) OF THE AGREEMENT
THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE DEPOSITOR, THE
MASTER SERVICER, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE
TRUST FUND TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.

                                      A-6-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                         <C>
Certificate No. [1]

Class [I][II]-P                             Percentage Interest: _____

Date of Pooling and Servicing Agreement     Aggregate Initial Certificate Principal Balance of
and Cut-Off Date:                           this Class as of the Cut-Off Date:
May 1, 2004                                 $[100.00]

First Distribution Date:                    Initial Certificate Principal Balance of this
June 25, 2004                               Certificate as of the Cut-Off Date:
                                            $[100.00]

Master Servicer:
Wells Fargo Bank, N.A.

Final Distribution Date:
[April][June] 2034
</TABLE>

                  MORTGAGE PASS-THROUGH CERTIFICATE
                            SERIES 2004-4

                  evidencing a fractional undivided interest in
                  the distributions allocable to the Class
                  [I][II]-P Certificates with respect to a trust
                  fund consisting primarily of a pool of
                  conventional one- to four-family fixed and
                  adjustable interest rate mortgage loans secured
                  by one- to four- family residences, units in
                  planned unit developments and individual
                  condominium units (the "Trust Fund") sold by
                  DEUTSCHE MORTGAGE SECURITIES, INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group [I][II] Loans are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that [____________] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in certain assets of the
Trust Fund generally consisting of the Group [I][II] Loans and related assets
sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group [I][II] Loans
were

                                      A-6-2

<PAGE>

sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will act as
master servicer of the Group [I][II] Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-Off Date specified above (the "Agreement"), among DMSI, as depositor
(the "Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs, in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to the
Holders of the Class [I][II]-P Certificates on such Distribution Date pursuant
to the Agreement. Any such distributions will be made by wire transfer in
immediately available funds to the account of such Person or by any other means
of payment acceptable to such Person.

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The initial Certificate
Principal Balance of this Certificate is set forth above.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) written certifications from the Holder of the Certificate
desiring to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit D and either
Exhibit E or Exhibit F, as applicable, or (ii) an Opinion of Counsel reasonably
satisfactory to the Trustee, the Depositor and the Securities Administrator that
such transfer may be made without such registration or qualification (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee, the Securities Administrator, the Master Servicer or any
Servicer in their respective capacities as such), together with copies of the
written certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Master Servicer, the Securities
Administrator or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Securities Administrator, the
Depositor, the Seller and the

                                      A-6-3

<PAGE>

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 this Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received either (i)
an opinion of counsel under Section 5.3(d) of the Agreement stating, among other
things, that the transferee's acquisition of a Class [I][II]-P Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code (the "Code") and will not subject the Depositor, the Trustee, the
Securities Administrator, the Master Servicer, any Servicer or the Trust Fund to
any obligation or liability in addition to those undertaken in the Agreement or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or

                                      A-6-4

<PAGE>

such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Percentage Interest will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
Group [I][II] Loan remaining in the Trust Fund and disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Group [I][II]
Loans or (ii) the optional repurchase by the party named in the Agreement of all
Group [I][II] Loans and other related assets of the Trust Fund in accordance
with the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate Scheduled Principal Balance
of the Group [I][II] Loans is less than the percentage of the aggregate
Scheduled Principal Balance specified in the Agreement of the Group [I][II]
Loans at the Cut-Off Date. The exercise of such right will effect the early
retirement of this Certificate. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.

                                      A-6-5

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class [I][II]-P Certificates referred to in
the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                    Authorized Signatory

                            A-6-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                __________________________________________________________
                                Signature by or on behalf of assignor

                                 _______________________________________________
                                              Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-7

                        FORM OF CLASS I/II-R CERTIFICATE

                  THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE
AGREEMENT REFERRED TO HEREIN.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(E)
OF THE AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(E)OF THE AGREEMENT
THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER,
THE TRUSTEE, THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE
TRUST FUND TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
SECURITIES ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES
OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX
IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(1), (2) OR (3) SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED
ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE
OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF

                                      A-7-1

<PAGE>

ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.3(F) OF THE
AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3(C) OF THE AGREEMENT.

                                      A-7-2

<PAGE>

Certificate No. [1]

Class I/II-R                                        Percentage Interest: 100%

Date of Pooling and Servicing Agreement
and Cut-Off Date:
May 1, 2004

First Distribution Date:
June 25, 2004

Master Servicer:
Wells Fargo Bank, N.A.

Final Distribution Date:
June 2034

                  MORTGAGE PASS-THROUGH CERTIFICATE
                            SERIES 2004-4

                  evidencing a fractional undivided interest in
                  the distributions allocable to the Class I/II-R
                  Certificates with respect to a trust fund
                  consisting primarily of a pool of conventional
                  one- to four-family fixed and adjustable
                  interest rate mortgage loans secured by one- to
                  four- family residences, units in planned unit
                  developments and individual condominium units
                  (the "Trust Fund") sold by DEUTSCHE MORTGAGE
                  SECURITIES, INC.

                  This Certificate is payable solely from the assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Loans are guaranteed or insured by any governmental entity or
by Deutsche Mortgage Securities, Inc., the Master Servicer, the Trustee or the
Securities Administrator or any of their affiliates or any other person. None of
Deutsche Mortgage Securities, Inc., the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.

                  This certifies that [______________] is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership interest
of Certificates of the same Class as this Certificate in the Group I and Group
II Loans sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Loans were
sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will act as
master servicer of the Loans (the "Master Servicer," which term includes any
successors thereto under

                                      A-7-3

<PAGE>

the Agreement referred to below). The Trust Fund was created pursuant to the
Pooling and Servicing Agreement dated as of the Cut-Off Date specified above
(the "Agreement"), among DMSI, as depositor (the "Depositor"), Wells Fargo Bank,
N.A., as Master Servicer and securities administrator (the "Securities
Administrator") and HSBC Bank USA as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Securities Administrator of, among other things, an affidavit to the
effect that it is a United States Person and Permitted Transferee, (iii) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee, and (iv) if any person other than a United
States Person and a Permitted Transferee acquires any Ownership Interest in this
Certificate in violation of such restrictions, then the Depositor will have the
right, in its sole discretion and without notice to the Holder of this
Certificate, to sell this Certificate to a purchaser selected by the Depositor,
which purchaser may be the Depositor, or any affiliate of the Depositor, on such
terms and conditions as the Depositor may choose.

                  The Securities Administrator will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the calendar
month immediately preceding the month in which such Distribution Date occurs, an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amounts required to be distributed to the Holders of
Certificates of the same Class as this Certificate. Any such distributions will
be made by wire transfer in immediately available funds to the account of such
Person or by any other means of payment acceptable to such Person. The last
scheduled Distribution Date is the Distribution Date in the month specified
above as the Final Distribution Date.

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) written certifications from the Holder of the Certificate
desiring to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the

                                      A-7-4

<PAGE>

Agreement as Exhibit D and either Exhibit E or Exhibit F, as applicable, or (ii)
an Opinion of Counsel satisfactory to it that such transfer may be made without
such registration or qualification (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Trustee, the Securities
Administrator or the Master Servicer in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Master Servicer, the Securities Administrator or the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Securities
Administrator, 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 this Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received either (i)
an opinion of counsel under Section 5.3(e) of the Agreement stating, among other
things, that the transferee's acquisition of a Class I/II-R Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code (the "Code") and will not subject the Depositor, the Trustee, the
Securities Administrator, the Master Servicer, any Servicer or the Trust Fund to
any obligation or liability in addition to those undertaken in the Agreement or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the

                                      A-7-5

<PAGE>

Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
Group I and Group II Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any Group I
and Group II Loans or (ii) the optional repurchase by the party named in the
Agreement of all Group I and Group II Loans and other related assets of the
Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Scheduled Principal Balance of the Group I and Group II Loans is less
than the percentage of the aggregate Scheduled Principal Balance specified in
the Agreement of the Group I and Group II Loans at the Cut-Off Date. The
exercise of such right will effect the early retirement of this Certificate. In
no event, however, will the Trust Fund created by the Agreement continue beyond
the expiration of 21 years after the death of certain persons identified in the
Agreement.

                                      A-7-6

<PAGE>

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.

                                      A-7-7

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class I/II-R Certificates referred to in
the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                   Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                __________________________________________________________
                                Signature by or on behalf of assignor

                                 _______________________________________________
                                             Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                  EXHIBIT A-8

                          FORM OF CLASS A-R CERTIFICATE

                  THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 5.3 OF THE AGREEMENT REFERRED TO HEREIN.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(E)
OF THE AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(E)OF THE AGREEMENT
THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER,
THE TRUSTEE, THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE
TRUST FUND TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
SECURITIES ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES
OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX
IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(1), (2) OR (3) SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED
ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE
OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE

                                      A-8-1

<PAGE>

CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND
THE PROVISIONS OF SECTION 5.3(F) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON
THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.

                                      A-8-2

<PAGE>

<TABLE>
<CAPTION>
<S>                                         <C>
Certificate No. [1]                         Pass-Through Rate: ___%

Class A-R                                   Percentage Interest: 100%

Date of Pooling and Servicing Agreement     Aggregate Initial Certificate Principal Balance
and Cut-Off Date:                           of this Class as of the Cut-Off Date:
May 1, 2004                                 $___________

First Distribution Date:                    Initial Certificate Principal Balance of this
June 25, 2004                               Certificate as of the Cut-Off Date:
                                            $___________

Master Servicer:
Wells Fargo Bank, N.A.                      CUSIP: ________

Final Distribution Date:
June 2034
</TABLE>

                  MORTGAGE PASS-THROUGH CERTIFICATE
                            SERIES 2004-4

                  evidencing a fractional undivided interest in
                  the distributions allocable to the Class A-R
                  Certificates with respect to a trust fund
                  consisting primarily of a pool of conventional
                  one- to four-family fixed and adjustable
                  interest rate mortgage loans secured by one- to
                  four- family residences, units in planned unit
                  developments and individual condominium units
                  (the "Trust Fund") sold by DEUTSCHE MORTGAGE
                  SECURITIES, INC.

                  This Certificate is payable solely from the assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group III-VII Loans are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that [_____________] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in certain assets of the
Trust Fund generally consisting of the Group III-VII Loans and related assets
sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group III-VII Loans
were

                                      A-8-3

<PAGE>

sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will act as
master servicer of the Group III-VII Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut- Off Date specified above (the "Agreement"), among DMSI, as depositor
(the "Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Securities Administrator of, among other things, an affidavit to the
effect that it is a United States Person and Permitted Transferee, (iii) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee, and (iv) if any person other than a United
States Person and a Permitted Transferee acquires any Ownership Interest in this
Certificate in violation of such restrictions, then the Depositor will have the
right, in its sole discretion and without notice to the Holder of this
Certificate, to sell this Certificate to a purchaser selected by the Depositor,
which purchaser may be the Depositor, or any affiliate of the Depositor, on such
terms and conditions as the Depositor may choose.

                  The Securities Administrator will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the calendar
month immediately preceding the month in which such Distribution Date occurs, an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amounts required to be distributed to the Holders of
Certificates of the same Class as this Certificate. Any such distributions will
be made by wire transfer in immediately available funds to the account of such
Person or by any other means of payment acceptable to such Person. The last
scheduled Distribution Date is the Distribution Date in the month specified
above as the Final Distribution Date.

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice.

                  No transfer of this Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received either (i)
an opinion of counsel under Section 5.3(e) of the Agreement stating, among other
things, that the transferee's acquisition of a Class A-R Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended

                                      A-8-4

<PAGE>

("ERISA") or Section 4975 of the Internal Revenue Code (the "Code") and will not
subject the Depositor, the Trustee, the Securities Administrator, the Master
Servicer, any Servicer or the Trust Fund to any obligation or liability in
addition to those undertaken in the Agreement or (ii) a representation letter,
in the form as described by the Agreement, stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new

                                      A-8-5

<PAGE>

Certificates evidencing the same Class and in the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
Group III-VII Loan remaining in the Trust Fund and disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Group III-VII
Loans or (ii) the optional repurchase by the party named in the Agreement of all
Group III-VII Loans and other related assets of the Trust Fund in accordance
with the terms of the Agreement. Such optional repurchase may be made only on or
after the Distribution Date on which the aggregate Scheduled Principal Balance
of the Group III-VII Loans is less than the percentage of the aggregate
Scheduled Principal Balance specified in the Agreement of the Group III-VII
Loans at the Cut-Off Date. The exercise of such right will effect the early
retirement of this Certificate. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.

                                      A-8-6

<PAGE>

                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated:

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class A-R Certificates referred to in the
within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                  Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                __________________________________________________________
                              Signature by or on behalf of assignor

                                 _______________________________________________
                                              Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                                                       EXHIBIT B

                                   [RESERVED]

                                       B-1

<PAGE>

                                                                       EXHIBIT C

                           FORM OF TRANSFER AFFIDAVIT

                                                   Affidavit pursuant to Section
                                              860E(e)(4) of the Internal Revenue
                                              Code of 1986, as amended, and for
                                              other purposes

STATE OF                   )
                           )ss:
COUNTY OF                  )

         [NAME OF OFFICER], being first duly sworn, deposes and says:

         1. That he/she is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____] [the United States], on behalf of which
he makes this affidavit.

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Deutsche Mortgage Securities,
Inc. Mortgage Loan Trust, Series 2004-4 Mortgage Pass-Through Certificates,
Class [I/II-R][A-R] Certificates (the "Residual Certificates") for the account
of a disqualified organization; (iii) it consents to any amendment of the
Pooling and Servicing Agreement that shall be deemed necessary by Deutsche
Mortgage Securities, Inc. (upon advice of counsel) to constitute a reasonable
arrangement to ensure that the Residual Certificates will not be owned directly
or indirectly by a disqualified organization; and (iv) it will not transfer such
Residual Certificates unless (a) it has received from the transferee an
affidavit in substantially the same form as this affidavit containing these same
four representations and (b) as of the time of the transfer, it does not have
actual knowledge that such affidavit is false.

         3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

         4. That the Investor's taxpayer identification number is
______________________.

         5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.

<PAGE>

         6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.

         7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.

         IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.

                                  [NAME OF INVESTOR]

                                  By: __________________________________________
                                      [Name of Officer]
                                      [Title of Officer]
                                      [Address of Investor for receipt of
                                      distributions]

                                      Address of Investor for receipt of tax
                                      information:

                                       C-2

<PAGE>

         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he/she
executed the same as his/her free act and deed and the free act and deed of the
Investor.

         Subscribed and sworn before me this ___ day of _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of ___________________, 20___.

                                       C-3

<PAGE>

                                                                       EXHIBIT D

                         FORM OF TRANSFEROR CERTIFICATE

                                               ______________,200___

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-4

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention:     Deutsche Mortgage Securities, Inc., 2004-4

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention:     Deutsche Mortgage Securities, Inc.
               Alternative Loan Trust, Series 2004-4

                  Re:  Deutsche Mortgage Securities, Inc. Mortgage Loan
                       Trust, Series 2004-4, Class [[I][II]-CE][[I][II]-P]
                       [B-[3][4][5]][I/II-R] Mortgage Pass- Through Certificates
                       ---------------------------------------------------------

Ladies and Gentlemen:

         In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of Series
2004-4 Mortgage Pass-Through Certificates, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of May 1, 2004 among Deutsche Mortgage
Securities, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N.A., as
master servicer and securities administrator, and HSBC Bank USA, as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, a covenants
with, the Depositor, the Trustee and the Securities Administrator that:

                  Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act"), that would render the

<PAGE>

disposition
of any Certificate a violation of Section 5 of the Act or any state securities
law, or that would require registration or qualification pursuant thereto. The
Seller will not act in any manner set forth in the foregoing sentence with
respect to any Certificate. The Seller has not and will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.

                                          Very truly yours,

                                          _____________________________________
                                          (Seller)

                                          By: _________________________________

                                          Name: _______________________________

                                          Title: ______________________________

                                       D-2

<PAGE>

                                                                       EXHIBIT E

             FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)

                                ___________,200__

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-4

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention:    Deutsche Mortgage Securities, Inc., 2004-4

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention:    Deutsche Mortgage Securities, Inc.
              Alternative Loan Trust, Series 2004-4

                  Re:   Deutsche Mortgage Securities, Inc. Mortgage Loan
                        Trust, Series 2004-4, Class [[I][II]-CE][[I][II]-P]
                        [B-[3][4][5]][I/II-R] Mortgage Pass-Through Certificates
                        --------------------------------------------------------

Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ Initial Certificate Principal Balance
of Series 2004-4 Mortgage Pass-Through Certificates, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of May 1, 2004 among Deutsche
Mortgage Securities, Inc., as depositor (the "Depositor"), Wells Fargo Bank,
N.A., as master servicer and securities administrator, and HSBC Bank USA, as
trustee (the "Trustee"). All terms used herein and not otherwise defined shall
have the meanings set forth in the Pooling and Servicing Agreement. The
Purchaser hereby certifies, represents and warrants to, and covenants with, the
Depositor, the Securities Administrator and the Trustee that:

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

                                       E-1

<PAGE>

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

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

               4. The Purchaser has been furnished with, and has had an
          opportunity to review (a) [a copy of the Private Placement Memorandum,
          dated ______, 2004, relating to the Certificates (b)] a copy of the
          Pooling and Servicing Agreement and [(b)] [(c)] such other information
          concerning the Certificates, the Mortgage Loans and the Depositor as
          has been requested by the Purchaser from the Depositor or the Seller
          and is relevant to the Purchaser's decision to purchase the
          Certificates. The Purchaser has had any questions arising from such
          review answered by the Depositor or the Seller to the satisfaction of
          the Purchaser. [If the Purchaser did not purchase the Certificates
          from the Seller in connection with the initial distribution of the
          Certificates and was provided with a copy of the Private Placement
          Memorandum (the "Memorandum") relating to the original sale (the
          "Original Sale") of the Certificates by the Depositor, the Purchaser
          acknowledges that such Memorandum was provided to it by the Seller,
          that the Memorandum was prepared by the Depositor solely for use in
          connection with the Original Sale and the Depositor did not
          participate in or facilitate in any way the purchase of the
          Certificates by the Purchaser from the Seller, and the Purchaser
          agrees that it will look solely to the Seller and not to the Depositor
          with respect to any damage, liability, claim or expense arising out
          of, resulting from or in connection with (a) error or omission, or
          alleged error or omission, contained in the Memorandum, or (b) any
          information, development or event arising after the date of the
          Memorandum.]

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

                                       E-2

<PAGE>

          or any state securities law, or that would require registration or
          qualification pursuant thereto. The Purchaser will not sell or
          otherwise transfer any of the Certificates, except in compliance with
          the provisions of the Pooling and Servicing Agreement.

                                              Very truly yours,

                                              ________________________________
                                              (Purchaser)

                                              By: ____________________________

                                              Name: __________________________

                                              Title: _________________________

                                       E-3

<PAGE>

                                                                       EXHIBIT F

                       FORM OF RULE 144A INVESTMENT LETTER

                                                                          [Date]

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-4

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention:        Deutsche Mortgage Securities, Inc., 2004-4

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention:     Deutsche Mortgage Securities, Inc.
               Alternative Loan Trust, Series 2004-4

          Re:  Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series
               2004-4 Mortgage Pass-Through Certificates, (the "Certificates"),
               including the Class I-CE, II-CE, I-P, II-P, B-3, B-4, B-5 and
               I/II-R Certificates (the "Privately Offered Certificates")
               ----------------------------------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, we
confirm that:

                  (i)      we understand that the Privately Offered Certificates
                           are not being registered under the Securities Act of
                           1933, as amended (the "Act") or any applicable state
                           securities or "Blue Sky" laws, and are being sold to
                           us in a transaction that is exempt from the
                           registration requirements of such laws;

                  (ii)     any information we desired concerning the
                           Certificates, including the Privately Offered
                           Certificates, the trust in which the Certificates
                           represent the entire beneficial ownership interest
                           (the "Trust") or any other matter we deemed relevant
                           to our decision to purchase Privately Offered
                           Certificates has been made available to us;

                  (iii)    we are able to bear the economic risk of investment
                           in Privately Offered Certificates; we are an
                           institutional "accredited investor" as defined in
                           Section 501(a) of Regulation D promulgated under the
                           Act and a sophisticated institutional investor;

                                       F-1

<PAGE>

                  (iv)     we are acquiring Privately Offered Certificates for
                           our own account, not as nominee for any other person,
                           and not with a present view to any distribution or
                           other disposition of the Privately Offered
                           Certificates;

                  (v)      we agree the Privately Offered Certificates must be
                           held indefinitely by us (and may not be sold,
                           pledged, hypothecated or in any way disposed of)
                           unless subsequently registered under the Act and any
                           applicable state securities or "Blue Sky" laws or an
                           exemption from the registration requirements of the
                           Act and any applicable state securities or "Blue Sky"
                           laws is available;

                  (vi)     we agree that in the event that at some future time
                           we wish to dispose of or exchange any of the
                           Privately Offered Certificates (such disposition or
                           exchange not being currently foreseen or
                           contemplated), we will not transfer or exchange any
                           of the Privately Offered Certificates unless:

                                    (A) (1) the sale is to an Eligible Purchaser
                           (as defined below), (2) if required by the Pooling
                           and Servicing Agreement (as defined below) a letter
                           to substantially the same effect as either this
                           letter or, if the Eligible Purchaser is a Qualified
                           Institutional Buyer as defined under Rule 144A of the
                           Act, the Rule 144A and Related Matters Certificate in
                           the form attached to the Pooling and Servicing
                           Agreement (as defined below) (or such other
                           documentation as may be acceptable to the Securities
                           Administrator) is executed promptly by the purchaser
                           and delivered to the addressees hereof and (3) all
                           offers or solicitations in connection with the sale,
                           whether directly or through any agent acting on our
                           behalf, are limited only to Eligible Purchasers and
                           are not made by means of any form of general
                           solicitation or general advertising whatsoever; and

                                    (B) if the Privately Offered Certificate is
                           not registered under the Act (as to which we
                           acknowledge you have no obligation), the Privately
                           Offered Certificate is sold in a transaction that
                           does not require registration under the Act and any
                           applicable state securities or "blue sky" laws and,
                           if Wells Fargo Bank, N.A. (the "Securities
                           Administrator") so requests, a satisfactory Opinion
                           of Counsel is furnished to such effect, which Opinion
                           of Counsel shall be an expense of the transferor or
                           the transferee;

                  (vii)    we agree to be bound by all of the terms (including
                           those relating to restrictions on transfer) of the
                           Pooling and Servicing, pursuant to which the Trust
                           was formed; we have reviewed carefully and understand
                           the terms of the Pooling and Servicing Agreement;

                    (viii) [With respect to transfers of the Privately Offered
                           Certificates other than the Class B-3, B-4 and B-5
                           Certificates]: we either: (i) are not acquiring the
                           Privately Offered Certificate directly or indirectly
                           by, or on behalf of, an employee benefit plan or
                           other retirement arrangement which is subject to
                           Title I of the Employee Retirement Income Security
                           Act of 1974, as amended

                                       F-2

<PAGE>

                           ("ERISA"), and/or section 4975 of the Internal
                           Revenue Code of 1986, as amended (the "Code"), or
                           (ii) are providing an opinion of counsel to the
                           effect that the proposed transfer and holding of a
                           Privately Offered Certificate: (I) is permissible
                           under applicable law, (II) will not result in any
                           non-exempt prohibited transaction under Section 406
                           of ERISA or Section 4975 of the Code and (III) will
                           not subject the Depositor, the Trustee, the Master
                           Servicer, the Securities Administrator, any Servicer
                           or the Trust Fund to any obligation or liability in
                           addition to those undertaken in the Agreement;

                           [With respect to transfers of the Class B-3, B-4 and
                           B-5 Certificates:] we either (a) are not a Plan or
                           purchasing such certificates with Plan Assets or
                           (b)(1) the transferee is an insurance company (2) the
                           source of funds used to purchase or hold the
                           Privately Placed Certificate(s) (or interest therein)
                           is an "insurance company general account" as defined
                           in ptce 95-60 and (3) the conditions set forth in
                           section I and III of PTCE 95-60 have been satisfied;

                    (ix)   We understand that each of the Class I-CE, II-CE,
                           I-P, II-P, B-3, B-4, B-5 and I/II-R Certificates
                           bears, and will continue to bear, a legend to
                           substantiate the following effect: "SOLELY FOR U.S.
                           FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
                           "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE
                           INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED,
                           RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
                           INTERNAL REVENUE CODE OF 1986 (THE "CODE"). ANY
                           RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
                           CERTIFICATE MAY BE MADE ONLY IN ACCORDANCE WITH THE
                           PROVISIONS OF SECTION 5.3 OF THE AGREEMENT REFERRED
                           TO HEREIN. THIS CERTIFICATE HAS NOT BEEN AND WILL NOT
                           BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
                           AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
                           NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
                           PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
                           TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
                           REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE
                           STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
                           PROVISIONS OF SECTION 5.3(c) OF THE AGREEMENT

                           [[With respect to each such Certificate other than
                           the B-3, B-4 and B-5 Certificates:] "NO TRANSFER OF
                           THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS
                           THE TRANSFEREE PROVIDES EITHER A CERTIFICATION
                           PURSUANT TO SECTION 5.3(d) OF THE AGREEMENT OR AN
                           OPINION OF COUNSEL UNDER SECTION 5.3(d) OF THE
                           AGREEMENT THAT THE PURCHASE OF THIS CERTIFICATE IS
                           PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE
                           OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
                           UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
                           SECURITY ACT OF 1974, AS AMENDED

                                       F-3

<PAGE>

                           ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT
                           SUBJECT THE MASTER SERVICER, THE TRUSTEE, THE
                           DEPOSITOR, THE SECURITIES ADMINISTRATOR, ANY SERVICER
                           OR THE TRUST FUND TO ANY OBLIGATION OR LIABILITY IN
                           ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.]

                           [[With respect only to each B-3, B-4 and B-5
                           Certificate:] [EACH TRANSFEREE OF THIS CERTIFICATE
                           WILL BE REQUIRED TO REPRESENT THAT EITHER (A) SUCH
                           TRANSFEREE IS NOT A PLAN OR PURCHASING SUCH
                           CERTIFICATES WITH PLAN ASSETS OR (B)(1) THE
                           TRANSFEREE IS AN INSURANCE COMPANY (2) THE SOURCE OF
                           FUNDS USED TO PURCHASE OR HOLD SUCH CERTIFICATE (OR
                           INTEREST THEREIN) IS AN "INSURANCE COMPANY GENERAL
                           ACCOUNT" AS DEFINED IN PTCE 95-60 AND (3) THE
                           CONDITIONS SET FORTH IN SECTION I AND III OF PTCE 95-
                           60 HAVE BEEN SATISFIED.]

                           [Only with respect only to the Class I/II-R
                           Certificates:] THIS CERTIFICATE MAY NOT BE HELD BY OR
                           TRANSFERRED TO A NON-UNITED STATES PERSON OR A
                           DISQUALIFIED ORGANIZATION (AS DEFINED BELOW). ANY
                           RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
                           CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED
                           TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE TRUSTEE
                           THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES
                           OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL
                           SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
                           INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
                           INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
                           ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN
                           SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX
                           IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
                           ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
                           511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN
                           SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
                           DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3)
                           SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED
                           ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED
                           ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS
                           TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND
                           (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
                           CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
                           PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
                           IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR
                           OTHER DISPOSITION OF THIS CERTIFICATE TO A
                           DISQUALIFIED ORGANIZATION OR AN AGENT OF A
                           DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE
                           DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER

                                       F-4

<PAGE>

                           AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
                           CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
                           INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
                           DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
                           THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED
                           TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH
                           AND THE PROVISIONS OF SECTION 5.3(f) OF THE AGREEMENT
                           REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED
                           ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
                           OWNERSHIP OF THIS CERTIFICATE."

                  "ELIGIBLE PURCHASER" means a corporation, partnership or other
entity which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.

                  Terms not otherwise defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement, dated as of May 1,
2004, between Deutsche Mortgage Securities, Inc., as depositor, Wells Fargo
Bank, N.A., as master servicer and securities administrator, and HSBC Bank USA,
as Trustee (the "Agreement").

                  If the Purchaser proposes that its Certificates be registered
in the name of a nominee on its behalf, the Purchaser has identified such
nominee below, and has caused such nominee to complete the Nominee
Acknowledgment at the end of this letter.

Name of Nominee (if any): _______________________

                                       F-5

<PAGE>

                  IN WITNESS WHEREOF, this document has been executed by the
undersigned who is duly authorized to do so on behalf of the undersigned
Eligible Purchaser on the ___ day of ________, 20___.

                                               Very truly yours,

                                               [PURCHASER]

                                               By: _____________________________
                                                        (Authorized Officer)

                                               [By: ____________________________
                                                        Attorney-in-fact]

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                               [NAME OF NOMINEE]

                                               By: _____________________________
                                                        (Authorized Officer)

                                               [By: ____________________________
                                                        Attorney-in-fact]

<PAGE>

                                                                       EXHIBIT G

                         FORM OF BENEFIT PLAN AFFIDAVIT
[Date]

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-4

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention:     Deutsche Mortgage Securities, Inc., 2004-4

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention:     Deutsche Mortgage Securities, Inc.
               Mortgage Loan Trust, Series 2004-4

          Re:  Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series
               2004-4 Mortgage Pass-through Certificates, (the "Trust") Class
               I-CE, II-CE, I-P, II-P, B-3, B-4, B-5, A-R and I/II-R
               Certificates (the "Purchased Certificates")
               ---------------------------------------------------------------

Under penalties of perjury, I, ___________________, declare that, to the best of
my knowledge and belief, the following representations are true, correct and
complete; and

                  1. That I am the _________ of _________________ (the
"Purchaser"), whose taxpayer identification number is ___________, and on behalf
of which I have the authority to make this affidavit.

                  2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the Trust.

                  3. [With respect to transfers of each Purchased Certificate
other than the Class B-3, B-4 and B-5 Certificates:] The Purchaser either (a) is
not an employee benefit plan subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or a "plan" described in Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code") or any entity deemed to
hold plan assets of any of the foregoing by reason of a plan's investment in
such entity (a "Plan") or (b) has provided the opinion of counsel required by
Section 5.3(d) of the Agreement.]

                           [With respect to transfers of the Class B-3, B-4 and
B-5 Certificates:] The Purchaser either (a) is not a Plan or purchasing such
certificates with Plan Assets or (b)(1) the Purchaser is an insurance company
(2) the source of funds used to purchase or hold the Purchased Certificate(s)
(or interest therein) is an "insurance company general account" as defined in
ptce 95-60 and (3) the conditions set forth in section I and III of PTCE 95-60
have been satisfied;

                                       G-2

<PAGE>

IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly executed
on its behalf, by its duly authorized officer this day of _____________, 20 .

                                          [Purchaser]
                                          By:_______________________________
                                          Its:

                                       G-2

<PAGE>

                                                                     EXHIBIT H-1

                    FORM OF REGULATION S TRANSFER CERTIFICATE

[Date]

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-4

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention:        Deutsche Mortgage Securities, Inc., 2004-4

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention:  Deutsche Mortgage Securities, Inc.
            Mortgage Loan Trust, Series 2004-4

      Re:   Deutsche Mortgage Securities, Inc. Mortgage Loan Trust,
            Series 2004-4 Mortgage Pass-through Certificates, (the "Trust")
            Class [B-3, B-4, B-5] Certificates (The "Purchased Certificates")
            -----------------------------------------------------------------

Ladies and Gentlemen:

            Reference is hereby made to the Pooling and Servicing Agreement (the
"Agreement"), dated as of May 1, 2004 among Deutsche Mortgage Securities, Inc.
(the "Depositor"), Wells Fargo Bank, N.A., as master servicer and securities
administrator (the "Master Servicer") and HSBC Bank USA, as trustee (the
"Trustee"). Capitalized terms used herein but not defined herein shall have the
meanings assigned thereto in the Agreement.

            This letter relates to U.S. $[__________] Certificate Principal
Balance of Class B-[3] [4][5] Certificates (the "Certificates") which are held
in the name of [name of transferor] (the "Transferor") to effect the transfer of
the Certificates to a person who wishes to take delivery thereof in the form of
an equivalent beneficial interest [name of transferee] (the "Transferee").

            In connection with such request, the Transferor hereby certifies
that such transfer has been effected in accordance with the transfer
restrictions set forth in the Agreement and the private

                                       G-3

<PAGE>

placement memorandum dated [____________] relating to the Certificates and that
the following additional requirements (if applicable) were satisfied:

         (a) the offer of the Certificates was not made to a person in the
United States;

         (b) at the time the buy order was originated, the Transferee was
outside the United States or the Transferor and any person acting on its behalf
reasonably believed that the Transferee was outside the United States;

         (c) no directed selling efforts were made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;

         (d) the transfer or exchange is not part of a plan or scheme to evade
the registration requirements of the Securities Act;

         (e) the Transferee is not a U.S. Person, as defined in Regulation S
under the Securities Act;

         (f) the transfer was made in accordance with the applicable provisions
of Rule 903(b)(2) or (3) or Rule 904(b)(1), as the case may be; and

         (g) the Transferee understands that the Certificates have not been and
will not be registered under the Securities Act, that any offers, sales or
deliveries of the Certificates purchased by the Transferee in the United States
or to U.S. persons prior to the date that is 40 days after the later of (i) the
commencement of the offering of the Certificates and (ii) the Closing Date, may
constitute a violation of United States law, and that (x) distributions of
principal and interest and (y) the exchange of beneficial interests in a
Temporary Regulation S Global Certificate for beneficial interests in the
related Permanent Regulation S Global Certificate, in each case, will be made in
respect of such Certificates only following the delivery by the Holder of a
certification of non-U.S. beneficial ownership, at the times and in the manner
set forth in the Agreement.

                                       G-4

<PAGE>

                  You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

                                               [Name of Transferor]

                                               By: ____________________________
                                               Name:
                                               Title:

                                       G-5

<PAGE>

                                   EXHIBIT H-2

                       FORM OF CLEARING SYSTEM CERTIFICATE

[Date]

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-4

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention:        Deutsche Mortgage Securities, Inc., 2004-4

         Re:    Deutsche Mortgage Securities, Inc. Mortgage Loan Trust,
                Series 2004-4 Mortgage Pass-through Certificates, (the "Trust")
                Class [B-3, B-4, B-5] Certificates (the "Certificates")
                -------------------------------------------------------

Ladies and Gentlemen:

         Reference is hereby made to the Pooling and Servicing Agreement (the
"Agreement"), dated as of May 1, 2004, among Deutsche Mortgage Securities, Inc.
(the "Depositor"), Wells Fargo Bank, N.A., as master servicer and securities
administrator (the "Master Servicer") and HSBC Bank USA, as trustee (the
"Trustee"). Capitalized terms used herein but not defined herein shall have the
meanings assigned thereto in the Agreement.

         This is to certify that, based solely on certificates we have received
in writing, by tested telex or by electronic transmissions from member
organizations appearing in our records as persons being entitled to a portion of
the Certificates set forth below (our "Member Organizations"), substantially to
the effect set forth in Annex A hereto, U.S. $________ certificate balance of
the above-captioned Certificates held by us or on our behalf are beneficially
owned by non-U.S.] person(s). As used in this paragraph, the term "U.S. person"
has the meaning given to it by Regulation S under the United States Securities
Act of 1933, as amended (the "Securities Act").

         We further certify (i) that we are not making available herewith for
exchange any portion of the Temporary Regulation S Global Certificates excepted
in such certificates and (ii) that as of the date hereof we have not received
any notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any interest in the
Certificates identified above are no longer true and cannot be relied upon as of
the date hereof. We understand that this certification is required in connection
with certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with this certificate is or would be relevant, we irrevocably authorized you to
produce this certificate to any interested party in such proceedings.

                                      H-2-1

<PAGE>

                                     Yours faithfully,

                                     [[Insert Name of Depositary for Euroclear],
                                     as operator of the Euroclear system]

                                     or

                                     [CLEARSTREAM, SOCIETE ANONYME]

                                     By:___________________________________

                                      H-2-2

<PAGE>

                                                          ANNEX A TO EXHIBIT H-2

                     FORM OF MEMBER ORGANIZATION CERTIFICATE

[(Insert Name of Depositary for
Euroclear), as operator of the
Euroclear system or Clearstream, societe anonyme]

         Re:    Deutsche Mortgage Securities, Inc. Mortgage Loan Trust,
                Series 2004-4 Mortgage Pass-through Certificates, (the "Trust")
                Class [B-3, B-4, B-5] Certificates (the "Certificates")
                -------------------------------------------------------

Ladies and Gentlemen:

         Reference is hereby made to the Pooling and Servicing Agreement (the
"Agreement"), dated as of May 1, 2004, among Deutsche Mortgage Securities, Inc.
(the "Depositor"), Wells Fargo Bank , N.A., as master servicer and securities
administrator (the "Master Servicer") and HSBC Bank USA, as trustee (the
"Trustee"). Capitalized terms used herein but not defined herein shall have the
meanings assigned thereto in the Agreement.

         This is to certify that, as of the date hereof and except as set forth
below, the Certificates held by you for our account [except $ ________________
of such beneficial interest in such Certificates in respect of which we are not
able to certify and as to which we understand the exercise of any rights to
payments thereon or the exchange for Permanent Regulation S Global Certificates
cannot be made until we do so certify,] are beneficially owned by non-U.S.
persons. As used in this paragraph, the term "U.S. person" has the meaning given
to it by Regulation S under the Securities Act.

         We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
Certificates held by you for our account in accordance with your documented
procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this certificate
applies as of such date.

Dated: ____________, 200__(1)

                                         Yours faithfully,

                                         [Name of Person giving the certificate]

__________________
(1)  To be dated no earlier than 15 days prior to the event to which the
     certification relates.

                                      H-2-3

<PAGE>

                                                                    SCHEDULE ONE

                                  LOAN SCHEDULE

                 [TO BE PROVIDED BY THE DEPOSITOR UPON REQUEST]

<PAGE>

                                                                    SCHEDULE TWO

                           PREPAYMENT CHARGE SCHEDULEexv10w1

 

EXHIBIT 10.1

NORTHWEST BIOTHERAPEUTICS, INC.

LOAN AGREEMENT, SECURITY AGREEMENT and

10% CONVERTIBLE, SECURED PROMISSORY NOTE

	 	 	 
	$500,000.00

	 	June&nbsp11, 2004

SECTION 1. GENERAL.

For value received, Northwest Biotherapeutics, Inc., a Delaware corporation
(the “Maker” or the “Company”), hereby promises to pay to the order of Toucan
Capital Fund II, L.P. or its assigns (collectively, the “Holder”), the
principal amount of Five Hundred Thousand Dollars ($500,000) upon written
demand by Holder made at any time on or after the first anniversary of
execution of this Loan Agreement, Security Agreement and 10% Convertible,
Secured Promissory Note (this “Note” or this “Agreement”), or such earlier date
as may be applicable under Sections 3 and 4 hereof (the “Maturity Date”).
Maker shall pay interest on the unpaid principal amount of this Note, accruing
from and after the date hereof at the rate of ten percent (10%) per annum,
compounding annually (computed on the basis of a 365-day year and the actual
number of days elapsed) (the “Interest Rate”). Accrued interest shall be
payable upon the payment of the principal of this Note. The principal of, and
interest on, this Note shall be payable in lawful currency of the United States
of America by wire transfer in immediately available funds to the account of
Holder, as provided in writing to Maker by Holder. All payments shall be
applied first to fees, costs and charges relating to this Note (including,
without limitation, any costs of collection), then to accrued and unpaid
interest, and thereafter to principal. This loan is made by Holder to Maker in
anticipation of an equity financing. Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Recapitalization
Agreement.

SECTION 2. PRE-PAYMENT.

This Note may be pre-paid in whole or in part prior to the Maturity Date;
provided Maker provides Holder with 30 days prior written notice thereof, and
provided further that Holder shall have the option to convert this note in
accordance with Section 12 hereof by notifying Maker of Holder’s election on or
before the expiration of such thirty (30) day notice period. In the event of
prepayment, Maker shall pay a penalty in the amount of 1% of the principal and
accrued interest then outstanding under this Note, unless a greater or lesser
penalty is established or approved by the U.S. Small Business Administration
(“SBA”). Conversion of this Note shall not be deemed a prepayment.

SECTION 3. DEFAULT INTEREST.

Upon the occurrence of an Event of Default (as hereinafter defined), the unpaid
principal amount and accrued and unpaid interest shall bear interest payable on
demand at the lesser of (i) fourteen percent (14%) per annum, (ii) the maximum
rate permitted under applicable rules and regulations of the SBA, or (iii) the
maximum rate allowed by law (the “Default Interest”). Such interest shall
accrue, commencing upon the occurrence of an Event of Default and continuing
until such Event of Default is cured or waived.

 

 

SECTION 4. DEFAULTS.

     4.1
Definitions. Each occurrence of any of the following events shall
constitute an “Event of Default”:

          (a) if a default occurs in the payment of any principal of, interest on,
or other obligation with respect to, this Note, whether at the due date thereof
or upon acceleration thereof, and such default remains uncured for five (5)
business days after written notice thereof from Holder;

          (b) if any representation or warranty of Maker made herein shall have been
false or misleading in any material respect, or shall have contained any
material omission, as of the date hereof;

          (c) if a default occurs in the due observance or performance of any
covenant or agreement on the part of Maker to be observed or performed pursuant
to the terms of this Note and such default remains uncured for five (5)
business days after written notice thereof from Holder;

          (d) if a default occurs in Maker’s performance of any of the terms and
conditions of that certain Recapitalization Agreement, dated as of April 26,
2004 (the “Recapitalization Agreement”) or any Related Recapitalization
Document;

          (e) if Maker shall (i) discontinue its business, (ii) apply for or consent
to the appointment of a receiver, trustee, custodian or liquidator of Maker or
any of its property, (iii) make a general assignment for the benefit of
creditors, or (iv) file a voluntary petition in bankruptcy, or a petition or an
answer seeking reorganization or an arrangement with creditors, or take
advantage of any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation laws or statutes, or file an answer admitting the
material allegations of a petition filed against it in any proceeding under any
such law, provided, however, that insolvency of Maker shall not constitute a
default, or the basis for a default, during the Bridge Period;

          (f) if there shall be filed against Maker an involuntary petition seeking
reorganization of Maker or the appointment of a receiver, trustee, custodian or
liquidator of Maker or a substantial part of its assets, or an involuntary
petition under any bankruptcy, reorganization or insolvency law of any
jurisdiction, whether now or hereafter in effect (any of the foregoing
petitions being hereinafter referred to as an “Involuntary Petition”) and such
Involuntary Petition shall not have been dismissed within ninety (90) days
after it was filed, provided, however, that insolvency of Maker shall not
constitute a default, or the basis for a default, during the Bridge Period;

          (g) if final judgment(s) for the payment of money in excess of an
aggregate of $25,000 (excluding any portion thereof that an insurance company
of nationally recognized

2

 

standing and creditworthiness has agreed to pay) shall be rendered against
Maker and the same shall remain undischarged for a period of thirty (30) days;
or

          (h) if there occurs any event that may have a material adverse effect on
the business, affairs, prospects, operations, properties, assets, liabilities,
structure or condition, financial or otherwise, of the Company (as such
business is presently currently conducted and/or as it is proposed to be
conducted), or on any material assets or any Intellectual Property or other
Collateral developed, owned, controlled, licensed, possessed, or used by Maker,
or to which Maker has any right, option, entitlement or claim, provided,
however, that ongoing weakening of Maker’s financial condition due to ongoing
expenditures and Maker’s failure to obtain equity financing shall not
constitute a default, or the basis for a default, during the Bridge Period.

     4.2 Cross-Default: Maker acknowledges that the financing contemplated by
this Note is part of an integrated Recapitalization Plan, as set forth in the
Recapitalization Agreement and the Related Recapitalization Documents. Maker
further acknowledges and agrees that this Note is subject to all terms and
conditions set forth in the Recapitalization Agreement and the Related
Recapitalization Documents, and that the Recapitalization Agreement and the
Related Recapitalization Documents are subject to all of the terms and
conditions of this Note. Maker agrees that any default by Maker under any
provision of this Note, the Recapitalization Agreement or any of the Related
Recapitalization Documents will constitute a default under each other Related
Recapitalization Document and the Recapitalization Agreement.

     4.3 Remedies on Default.

          (a) Upon each and every such Event of Default and at any time thereafter
during the continuance of such Event of Default: (i) any and all indebtedness
of Maker to Holder under this Note or otherwise shall immediately become due
and payable, both as to principal and interest (including any deferred interest
and any accrued and unpaid interest and any Default Interest); and (ii) Holder
may exercise all the rights of a creditor under applicable state and/or federal
law.

     (b) In case any one or more Events of Default shall occur and be
continuing, and acceleration of this Note or any other indebtedness of Maker to
Holder shall have occurred, Holder may, inter alia, proceed to protect and
enforce its rights by an action at law, suit in equity and/or other appropriate
proceeding, whether for the specific performance of any agreement contained in
this Note, or for an injunction against a violation of any of the terms hereof
or thereof or in furtherance of the exercise of any power granted hereby or
thereby or by law. No right conferred upon Holder by this Note shall be
exclusive of any other right referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise.

SECTION 5. DEFENSES.

     5.1 No Offsets. The obligations of Maker under this Note shall not be
subject to reduction, limitation, impairment, termination, defense, set-off,
counterclaim or recoupment for any reason.

3

 

     5.2 Usury Limitations. It is the intention of the parties hereto to
comply with all applicable usury laws; accordingly, it is agreed that
notwithstanding any provisions to the contrary in this Note or any other
agreements or instruments between them, in no event shall such agreements or
instruments require the payment or permit the collection of interest (which
term, for purposes hereof, shall include any amount which, under applicable
law, is deemed to be interest, whether or not such amount is characterized by
the parties as interest) in excess of the maximum amount permitted by such
laws. If any excess of interest is unintentionally contracted for, charged or
received under the Note or under the terms of any other agreement or instrument
between the parties, the effective rate of interest shall be automatically
reduced to the maximum lawful rate of interest allowed under the applicable
usury laws as now or hereafter construed by the courts having jurisdiction
thereof.

SECTION 6. REPLACEMENT OF NOTE.

     Upon receipt by Maker of reasonable evidence of the loss, theft,
destruction, or mutilation of this Note, Maker will deliver a new Note
containing the same terms and conditions in lieu of this Note. Any Note
delivered in accordance with the provisions of this Section 6 shall be dated as
of the date of this Note.

SECTION 7. EXTENSION OF MATURITY.

     Should the principal of or interest on this Note become due and payable on
other than a business day, the due date thereof shall be extended to the next
succeeding business day, and, in the case of principal, interest shall be
payable thereon at the rate per annum herein specified during such extension.
For the purposes of the preceding sentence, a business day shall be any day
that is not a Saturday, Sunday, or legal holiday in the State of Delaware.

SECTION 8. ATTORNEYS’ FEES AND COLLECTION FEES.

     Should the indebtedness evidenced by this Note or any part hereof be
collected at law or in equity or in bankruptcy, receivership or other court
proceedings, arbitration or mediation, or any settlement of any of the
foregoing, Maker agrees to pay, in addition to principal and interest due and
payable hereon, all costs of collection, including, without limitation,
reasonable attorneys’ fees and expenses, incurred by Holder in collecting or
enforcing this Note.

SECTION 9. WAIVERS; CONSENT TO JURISDICTION.

     9.1 Waivers by Maker. Maker hereby waives presentment, demand for
payment, notice of dishonor, notice of protest and all other notices or demands
in connection with the delivery, acceptance, performance or default of this
Note.

     9.2 Actions of Holder not a Waiver. No delay by Holder in exercising any
power or right hereunder shall operate as a waiver of any power or right, nor
shall any single or partial exercise of any power or right preclude other or
further exercise thereof, or the exercise of any

4

 

other power or right hereunder or otherwise; and no waiver or modification of
the terms hereof shall be valid unless set forth in writing by Holder and then
only to the extent set forth therein.

     9.3 Consent to Jurisdiction. Maker hereby irrevocably submits to the
jurisdiction of any state or federal court sitting in the State of Delaware
over any suit, action, or proceeding arising out of or relating to this Note or
any other agreements or instruments with respect to Holder. Maker hereby
irrevocably waives, to the fullest extent permitted by law, any objection that
Maker may now or hereafter have to the laying of venue of any such suit,
action, or proceeding brought in any such court and any claim that any such
suit, action, or proceeding brought in any such court has been brought in an
inconvenient forum. Final judgment in any such suit, action, or proceeding
brought in any such court shall be conclusive and binding upon Maker and may be
enforced in any court in which Maker is subject to jurisdiction by a suit upon
such judgment, provided that service of process is effected upon Maker as
provided in this Note or as otherwise permitted by applicable law.

     9.4 Waiver of Jury Trial. MAKER WAIVES ITS RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN
MAKER AND HOLDER RELATING TO THE SUBJECT MATTER OF THIS NOTE. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS NOTE,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO
ANY OTHER DOCUMENT OR AGREEMENT RELATING TO THE LOAN.

     9.5 Service of Process. Maker hereby consents to process being served in
any suit, action, or proceeding instituted in connection with this Note by
delivery of a copy thereof by certified mail, postage prepaid, return receipt
requested, to Maker, and/or by delivery of a copy thereof to a registered agent
of Maker. Refusal to accept delivery, and/or avoidance of delivery, shall be
deemed to constitute delivery. Maker irrevocably agrees that service in
accordance with this Section 9.5 shall be deemed in every respect effective
service of process upon Maker in any such suit, action or proceeding, and
shall, to the fullest extent permitted by law, be taken and held to be valid
personal service upon Maker. Nothing in this Section 9.5 shall affect the right
of Holder to serve process in any manner otherwise permitted by law or limit
the right of Holder otherwise to bring proceedings against Maker in the courts
of any jurisdiction or jurisdictions.

SECTION 10. COVENANTS.

     10.1 Affirmative Covenants. So long as this Note shall remain
outstanding:

          (a) Office. Maker shall maintain its principal office, and the majority
of its employees, assets and operations, in the United States.

5

 

          (b) Use of Proceeds. Maker will use the proceeds from this Note only for
the following purposes:

	 	 
	

	(i) General operating expenses, expenses for the development and
protection of its intellectual property, and other usual and customary
commercial and business expenses incurred in pursuing its business plan
and strategy, on and after the effective date hereof;
	 
	 
	

	(ii) Audit expenses and regular and special SEC filing expenses, for
audits and filings occurring on or after the effective date hereof,
including, without limitation, SEC filings relating to solicitation of
any shareholder consents to the recapitalization of Maker; and
	 
	 
	

	(iii) Expenses of accountants, attorneys, consultants and other
professionals (including, without limitation, the expenses of Investor
described in Section 4.11 of the Recapitalization Agreement) relating to
the recapitalization of Maker.

Maker will not use the proceeds from this Note for any other purpose. Without
limiting the generality of the foregoing, none of the proceeds will be used,
without prior written agreement by the Holder, (i) to purchase or carry (or
refinance any borrowing, the proceeds of which were used to purchase or carry)
any “security” within the meaning of the Securities Act of 1933, as amended
(the “Securities Act”), (ii) to repay any indebtedness or discharge any
obligation to an person or entity, other than trade payables incurred in the
ordinary course of business on or after the effective date hereof, and
consistent with Maker’s operating plans and budgets fully disclosed to the
Holder prior to the Closing, or (iii) to engage in business activities which
would cause a violation of 13 CFR 107.720. This latter limitation prohibits,
without limitation, the use of proceeds: (i) directly or indirectly, for
providing funds to others; (ii) for the purchase or discounting of debt
obligations; (iii) for factoring or long-term leasing of equipment with no
provision for maintenance or repair; (iv) for engaging in real estate
transactions such that Maker could reasonably be classified under Major Group
65 (Real Estate) of the SIC Manual; (v) for business activities wherein the
assets of the business of Maker (the “Business”) will be reduced or consumed,
generally without replacement, as the life of the Business progresses, and the
nature of the Business does not require that a stream of cash payments be made
to the financing sources of the Business, on a basis associated with the
continuing sale of assets (examples of such businesses would include real
estate development projects, the financing and production of motion pictures,
and oil and gas well exploration, development and production); (vi) for a
foreign operation; (vii) to provide capital to a corporation licensed or
sub-licensed under the Small Business Investment Act, (viii) to acquire farm
land, (ix) to fund production of a single item or defined limited number of
items generally over a defined production period, such production to constitute
the majority, of the activities of Maker (examples include electric generating
plants), or (x) for any purpose contrary to the public interest (including, but
not limited to, activities which are in violation of law) or inconsistent with
free competitive enterprise, in each case, within the meaning of Section
107.720 of Title 13 of the Code of Federal Regulations.

          (c) Seniority. Except as otherwise expressly provided, and except for
security interests and liens described in items 2, 3 and 4 of Schedule 14.11 of
the Disclosure Schedule attached hereto as Exhibit B (the “Disclosure
Schedule”), the indebtedness evidenced by this Note: (i) shall be senior in
all respects to all other indebtedness or obligations of Maker of any

6

 

kind, direct or indirect, contingent or otherwise, other than obligations of
Maker owed directly to the state or federal government, and other than any
other indebtedness or obligations of Maker to Holder; (ii) shall not be made
subordinate or subject in right of payment to the prior payment of any other
indebtedness or obligation of any kind, direct or indirect, contingent or
otherwise, other than obligations of Maker owed directly to the state or
federal government, and other than any other indebtedness or obligations of
Maker to Holder.

          (d) No Conflicting Agreements. Maker shall not enter into any agreement
that would materially impair, interfere or conflict with Maker’s obligations
hereunder. Without Holder’s prior written consent, Maker shall not permit the
inclusion in any material contract to which it becomes a party of any
provisions that could or might in any way result in the creation of a security
interest in any assets of Maker, including without limitation any Collateral
(as defined in Exhibit A hereto).

          (e) Disclosure of Material Adverse Events. Within three (3) business days
of Maker obtaining knowledge thereof, Maker will notify Holder in writing of
any event that may have a material adverse effect on the business, affairs,
prospects, operations, properties, assets, liabilities, structure or condition,
financial or otherwise, of the Company (as such business is presently conducted
and/or as it is proposed to be conducted), or on any material assets or any
Intellectual Property or other Collateral developed, owned, controlled,
licensed, possessed, or used by Maker, or to which Maker has any right, option,
entitlement or claim. Operating expenditures in the ordinary course of
business and in accordance with operating budgets approved by Maker’s Board of
Directors and fully disclosed to Holder prior to the effective date hereof
shall not be deemed to be material adverse events solely because they weaken
Maker’s financial condition in the absence of new equity financing of Maker.

          (f) Financial Information. So long as any principal and/or interest under
this Note shall remain outstanding:

          (i) Promptly after the end of each fiscal year (but in any event
prior to February 28 of each year) and at such other times as Holder may
reasonably request, Maker shall deliver to Holder a written assessment,
in form and substance satisfactory to Holder, of the economic impact of
such Holder’s financing hereunder, specifying the full-time equivalent
jobs created or retained in connection with such investment, and the
impact of the financing on Maker’s business in terms of revenues and
profits and on taxes paid by Maker and its employees.

          (ii) Maker shall provide on a timely basis to Holder all financial
information requested from time to time by Holder, including without
limitation its quarterly and annual balance sheet and income statement.
Such financial information shall be certified by a member of Maker’s
senior management. Financial information required shall also include
such information as is necessary for Holder to file form 468 with the
SBA.

          (iii) In addition to the information specified in Section 10.1(f)(i)
and (ii) above, upon request, Maker agrees promptly to provide Holder
with sufficient

7

 

additional information to permit Holder to comply with (i) its
obligations under the Small Business Investment Act of 1958, as amended,
and the regulations promulgated thereunder and related thereto and (ii)
provide any other information reasonably requested or required by any
governmental agency asserting jurisdiction over Holder.

          (g) Access. So long as any principal and/or interest under this Note
shall remain outstanding, Maker shall permit Holder and its agents or
representatives to visit and inspect Maker’s properties, to examine its books
of account and records and to discuss Maker’s affairs, finances and accounts
with its officers, all at such times during normal business hours as reasonably
may be requested by Holder. Maker shall allow SBA Examiners access to its
books and records, as reasonably required by such Examiners in connection with
their annual audits of Holder or for any other legitimate purposes.

          (h) SBA Compliance. Maker acknowledges that Holder is a licensed Small
Business Investment Corporation and thereby a participant in the SBIC program
of the U. S. Small Business Administration (“SBA”), and as such is subject to
the rules, regulations, guidance and direction of the SBA on matters affecting
its business and investment practices, and that such rules and regulations
affect the business activities and practices of the companies in which Holder
makes investments. Maker shall promptly and fully cooperate with Holder to
facilitate both Maker’s and Holder’s compliance with all such SBA rules,
regulations, guidance and direction.

          (i) Business Activity. As long as this Note shall remain outstanding,
Maker shall make no change in its business activity that would make it or any
of its business activities non-compliant with SBA regulations and guidelines.

     10.2 Negative Covenants. So long as this Note shall remain outstanding:

          (a) Indebtedness. Maker shall not incur additional indebtedness, beyond
the indebtedness already existing as of the date hereof, for borrowed money in
excess of $10,000, in aggregate.

          (b) Liens. Maker shall not grant to any person or entity a security
interest, lien, license, or other encumbrance of any kind, direct or indirect,
contingent or otherwise, in, to or upon any assets of Maker, including, without
limitation, any intellectual property of any kind, as defined in Exhibit A
hereto (respectively, the “Intellectual Property” and the “Collateral”).

          (c) Sale or License of Assets. Maker shall not sell, lease, transfer,
assign or otherwise dispose of or encumber (including, without limitation
through licensing or partnering arrangements) or abandon, conceal, injure or
destroy any material assets (whether tangible or intangible) of Maker
(including, without limitation, any Collateral (as defined in Section 11),
other than with the prior written approval of Holder and in the ordinary course
of business.

          (d) Issuance of Capital Stock. Except for (a) any transaction pursuant to
an Unsolicited Proposal that Maker accepts in accordance with the fiduciary
exception provided in Section 3.2 of the Recapitalization Agreement or (b)
shares of capital stock issuable upon

8

 

exercise or conversion of warrants or convertible securities outstanding prior
to February 1, 2004, Maker shall not without Holder’s prior written approval:
(i) issue any shares of capital stock or other securities, or any instruments
exercisable for or convertible into capital stock or other securities, or (ii)
make any promises, commitments, undertakings, agreements or letters of intent
for any of the issuances described in (i) hereof.

          (e) Distributions and Redemptions. Maker shall not declare or pay any
dividends or make any distributions of cash, property or securities of Maker
with respect to any shares of its common stock, preferred stock or any other
class or series of its stock, or, directly or indirectly (except for
repurchases of common stock by Maker in accordance with the terms of employee
benefit plans or written agreement between Maker and any of its employees
approved by the Board of Directors of Maker prior to February 1, 2004), redeem,
purchase, or otherwise acquire for any consideration any shares of its common
stock or any other class of its stock.

          (f) Hiring. Maker shall not hire, or agree to hire, any employee or
engage, or agree to engage, any consultant, independent contractor or any other
non-employee personnel, except in accordance with Maker’s budget that has been
approved by Maker’s board of directors and the Investor;

          (g) Severance. Maker shall not enter into, increase, expand, extend, or
renew any severance, separation, retention, change of control or similar
agreement with any employee, consultant, independent contractor or any other
non-employee personnel, or agree, promise or commit to do so, without the prior
written approval of Investor;

          (h) Facilities. Maker shall not purchase, lease, hire, rent or otherwise
acquire directly or indirectly any rights in or to any asset or facility
outside of the ordinary course of business in an amount in excess of $10,000,
in aggregate, or agree, promise or commit to do so, except in accordance with
the Maker’s budget that has been approved by the Maker’s board of directors and
the Investor.

          (i) Other Limitations.

               (i) Maker shall not change the nature of its business activity in a manner
that would cause a violation of 13 C.F.R. Section 107.720 and/or Section
107.760(b) (including, without limitation, by undertaking real estate, film
production or oil and gas exploration activities). In the event that Maker
changes the nature of its business activity such that such change would render
Maker ineligible for financing pursuant to applicable SBA rules and
regulations, Maker agrees to use its best efforts to facilitate a transfer or
redemption of any securities then held by Holder.

               (ii) Maker will at all times comply with the non-discrimination
requirements of 13 C.F.R. Parts 112, 113 and 117.

               (iii) For a period of at least one year after the date of this Note, Maker
will locate no more than 49 percent of the employees or tangible assets of
Maker outside the United States.

9

 

     10.3 Additional Covenant. Immediately after the effective date of this
Note, Maker shall recall all units of Maker’s Tangential Flow Filtration
(“TFF”) devices, and all specifications, diagrams, description or other
information relating to such TFF devices, or any similar device, from all third
parties who may currently have any of the foregoing. Maker will take all
necessary steps to ensure that such recall is effective as quickly as possible,
and in no event later than fifteen (15) days after the effective date hereof.
Until the later of the expiration of the Standstill Period (as defined in
Section 13 below) or the date on which this Note has been discharged in full,
Maker shall not sell, license, loan or otherwise in any way transfer or
distribute Maker’s Tangential Flow Filtration (“TFF”) devices or any similar
device, or any specifications, diagrams, description or other information about
the TFF devices, to any third party, or commit or promise or enter into any
understanding of any kind, direct or indirect, contingent or otherwise, to do
any of the foregoing in regard to Maker’s TFF devices or any similar device,
without the prior written consent of Holder in each case.

SECTION 11. SECURITY INTEREST.

     11.1 First Priority in All Collateral. To secure its obligations under
this Note whether at stated maturity, by acceleration or otherwise, Maker
hereby grants and pledges to Holder a first priority senior security interest
in all of Maker’s right, title and interest in, to and under all of Maker’s
tangible and intangible property, whether now owned, licensed or held or
hereafter acquired, licensed, developed, held or arising, as described in
Exhibit A hereto (the “Collateral”), and all proceeds of any kind from any
disposition of any such Collateral. Such security interest shall be senior to
any security interest in the Collateral granted the holders of the Management
Notes pursuant to any subordination agreement between Holder, the holders of
the Management Notes and Maker, and shall be senior to any other security
interest of any kind, direct or indirect, contingent or otherwise, in the
Collateral except for the security interests and liens described in items 2, 3
and 4 of Schedule 14.11 of the Disclosure Schedule (only to the amounts set
forth on such schedule) and any other indebtedness or obligations of Maker to
Holder. If certificates of title are now, or hereafter become, issued or
outstanding with respect to any of the Collateral, Maker promptly shall cause
the senior security interest of Holder to be properly noted thereon. Maker
agrees that the security interest herein granted has attached and shall
continue until Maker’s obligations under this Note have been paid, performed
and indefeasibly discharged in full.

     11.2 Rights Cumulative. The rights and remedies of Holder with respect to
the senior security interest granted hereby are in addition to those which are
now or may hereafter be available to Holder as a matter of law or equity. Each
right, power and remedy of Holder provided for herein, or now or hereafter
existing at law or in equity, shall be cumulative and concurrent and shall be
in addition to every right, power and remedy provided for herein, and the
exercise by Holder of any one or more of the rights, powers and/or remedies
provided for in this Note, or now or hereafter existing at law or in equity,
shall not preclude the simultaneous or later exercise by any person, including
a grantee, of any or all other rights, powers and/or remedies.

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     11.3 Documentation of Security Interest. Maker shall execute, deliver,
file, amend, and re-file any financing statements, instruments (including
without limitation stock certificates), continuation statements, assignments,
or other security agreements that Holder may require from time to time to
confirm the liens arising out of this Note with respect to the Collateral.
Maker agrees to pay all reasonable costs associated with filing and/or
re-filing of any financing statements, continuation statements or other
security agreements required to perfect and to continue perfection of Holder’s
security interest in the Collateral and all reasonable costs required to
evidence the first priority of the security interest, including, without
limitation, reasonable attorneys’ fees. Maker authorizes Holder to file
financing statements under the UCC with respect to the security interest
granted hereby and agrees, upon request of Holder, to promptly and duly execute
and deliver any and all such further instruments and documents, and to take
such further action, as Holder may reasonably deem necessary or desirable to
obtain the full benefits of this grant of security interest.

     11.4 No Conflicting Agreements. Maker shall not enter into any agreement
on or after the effective date of this Note that would materially impair or
conflict with Maker’s obligations hereunder without Holder’s prior written
consent. Without Holder’s prior written consent, Maker shall not permit the
inclusion in any material contract to which it becomes a party on or after the
effective date of this Note, of any provisions that could or might in any way
prevent the creation, perfection and maintenance of a first priority security
interest in Maker’s rights and interest in any property included within the
definition of the Collateral acquired under such contracts. Maker represents
and warrants that, as of the effective date of this Note, there are no existing
agreements or undertakings that would materially impair or conflict with
Maker’s obligations hereunder or that could or might in any way prevent the
creation, perfection and maintenance of a first priority security interest in
Maker’s rights and interest in any property included within the definition of
the Collateral acquired under such contracts; except for existing equipment
leases described in item 2 of Schedule 14.11 and the statutory liens described
in items 3 and 4 of the Disclosure Schedule.

     11.5 Notification Requirements. Within two (2) business days of any
officer, director or employee of Maker obtaining knowledge thereof, Maker will
promptly notify Holder in writing of any event that materially adversely
affects the value of any material Collateral, the ability of Maker to dispose
of any material Collateral, or the rights and remedies of Holder in relation
thereto, including the levy of any legal process against any of the Collateral.

     11.6 Foreclosure Remedy. Notwithstanding anything to the contrary herein
or in the Recapitalization Agreement or any other agreement or document, in the
event that Maker is unable to pay and discharge this Note in full on the
Maturity Date, subject to the compliance with the requirements of the Delaware
Uniform Commercial Code, nothing herein or in the Recapitalization Agreement or
any other agreement or document shall be deemed to preclude, limit or restrict
Holder from requiring the delivery of some or all of the Collateral in full or
partial satisfaction of Maker’s obligation under the Note. Alternatively,
Holder may, in its sole discretion, elect to cause some or all of the
Collateral to be sold, and the sale proceeds to be used to pay and discharge
the Note in full.

11

 

SECTION 12. CONVERSION.

     12.1 Holder’s Election. Notwithstanding any other provision of this Note
or any applicable agreement or document, until, and/or in the absence of,
purchases for cash of a minimum of $15 million of Convertible Preferred Stock,
by Other Investors (as defined in the Recapitalization Agreement), on the terms
and conditions set forth herein and in the Recapitalization Agreement, Holder
may, in its sole discretion, elect to convert any or all of the principal
and/or interest due under the Note into any Equity Security and/or Debt
Security (each as defined below) and/or any combination thereof, in each case
that Holder shall designate in Holder’s sole discretion (the securities so
elected being the “Holder Designated Securities”). Holder may make such
determinations from time to time and at any time before this Note has been
discharged in full, and, as applicable, at any time on or before the expiration
of the thirty (30) day notice period required under this Note in the event the
Maker wishes to prepay this Note. For purposes hereof, (i) the term “Equity
Security” means any class or series of equity security, or any combination of
classes and/or series of equity securities, of the Maker that have been
authorized under the Maker’s certificate of incorporation, as amended and/or
restated, including by any certificate of designation (the “Charter”), or any
new class or series of equity security, or any combination of new and/or
existing classes and/or series of equity securities, of the Maker for which the
Maker has undertaken any agreement, obligation, promise, commitment or letter
of intent to obtain such authorization and (ii) the term “Debt Security” means
any evidence of indebtedness of the Maker that the Maker has authorized,
created or incurred, or that the Maker has undertaken any agreement,
obligation, promise, commitment or letter of intent to authorize, create or
incur.

     12.2 Automatic Conversion. The principal amount of, and accrued and
unpaid interest on, this Note shall automatically convert into Convertible
Preferred Stock, upon the terms and conditions set forth herein and in the
Recapitalization Agreement, only in the event, and upon the closing of, the
purchase in cash (and not by conversion of debt, exercise of warrants or
options, or conversion or exercise of other securities or instruments), on the
terms and conditions set forth in the Convertible Preferred Stock Term Sheet,
by Other Investors, as defined in the Convertible Preferred Stock Term Sheet,
of a minimum of $15 million of Convertible Preferred Stock.

     12.3 Information for Holder’s Election. Maker shall provide to Holder,
within two (2) business days after notice of each request by Holder, all
information reasonably requested by Holder in connection with any Equity
Securities and/or Debt Securities, to enable Holder to make decisions regarding
one or more conversions. In the event that Maker seeks to prepay this Note,
Maker shall deliver to Holder, simultaneously and together with the notice
required under Section 2 of this Note of Maker’s interest in prepaying the
Note, a summary of all material information, terms and conditions relating to
all Equity Securities and Debt Securities (including any “side” letters or
agreements or separate agreements).

     12.4 Conversion Price. The conversion price for any conversion pursuant
to Section 12.2 shall be the lowest nominal or effective price per share paid
by the Other Investors who purchase such Convertible Preferred Stock (with the
exception of shares issuable upon exercise of the Bridge Warrants). The
conversion price for any conversion into any equity or debt security pursuant
to Section 12.1 shall be the lowest of (i) the lowest nominal or effective
price

12

 

per share paid by any investor at any time on or after the date one year
prior to the Effective Date of the Recapitalization Agreement (with the
exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to
certain options to purchase, at a purchase price of $0.0001, that were
outstanding on the Effective Date of the Recapitalization Agreement and held by
members of the Board of Directors, as set forth in Schedule 2.7(d) to the
Recapitalization Agreement, and (y) shares issuable upon the exercise of the
Bridge Warrants, each of which shall be excluded from consideration under this
section), (ii) the lowest nominal or effective price at which any investor is
entitled to acquire shares (including, without limitation, through purchase,
exchange, conversion or exercise) pursuant to any other security, instrument,
or promise, undertaking, commitment, agreement or letter of intent of the Maker
outstanding on or after the Effective Date of the Recapitalization Agreement or
granted, issued, extended or otherwise made available by the Maker at any time
on or after the date one year prior to the Effective Date of the
Recapitalization Agreement (regardless of whether currently exercisable or
convertible) (with the exception of (x) certain options to purchase up to
35,000 shares of Common Stock at a purchase price of $0.0001 that were
outstanding on the Effective Date of the Recapitalization Agreement and held by
members of the Board of Directors as set forth in Schedule 2.7(d) to the
Recapitalization Agreement, and (y) the Bridge Warrants, each of which shall be
excluded from consideration under this section); and (iii) the lesser of $0.10
per share or 35% discount to the average closing price per share of the Common
Stock during any twenty consecutive trading days (beginning with the twenty
consecutive trading days prior to the Effective Date of the Recapitalization
Agreement); provided, however, that in no event shall the price per share
calculated pursuant to this clause (iii) be less than $.04 per share. The
calculation required by clause (ii) hereof shall initially be based upon
Schedule 2.7(d) to the Recapitalization Agreement. All other rights,
preferences, privileges, terms and conditions received by Holder in connection
with any conversion and/or any securities issued by the Maker to Holder upon
conversion, shall be no less favorable to Holder than the rights, preferences,
privileges, terms and conditions any other investor in the Maker has received
or is entitled to receive with respect to the security into which Holder is
converting pursuant to any other security, instrument, promise, undertaking,
commitment, agreement or letter of intent of the Maker, whether or not such
rights, preferences, privileges, terms and conditions for any other investor
are incorporated into the agreements or documents relating to any conversion or
any issuance of the security or other instrument to that investor or are
provided separately, at any time on or after one year prior to the Effective
Date of the Recapitalization Agreement. In regard to each conversion
hereunder, the Maker hereby agrees to take and/or arrange for all necessary
corporate and related action to enable the execution of each such conversion
elected by Holder.

     12.5 No Impairment. Maker shall not, by amendment of its Charter or
through a reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action,
omission or agreement, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed by Maker under and/or in
connection with this Note, but shall at all times in good faith use best
efforts to assist in carrying out of all the provisions of and/or relating to
this Note and in taking all such action as may be necessary or appropriate to
protect Holder’s rights, preferences and privileges under and/or in connection
with the Note against impairment. Holder’s rights, preferences and privileges
granted under and/or in connection with any Holder Designated Securities may
not be amended,

13

 

modified or waived without the Holder’s prior written consent, and the
documentation providing for such rights, preferences and privileges will
specifically provide as such.

SECTION 13. STANDSTILL, EXCLUSIVITY AND CONFIDENTIALITY.

During the Bridge Period and the Equity Financing Period, as defined in the
Recapitalization Agreement and in the Convertible Preferred Stock Term Sheet,
but excluding the periods from February 18, 2004 through February 29, 2004 and
from March 16, 2004 through the Effective Date of the Recapitalization
Agreement, (collectively the “Standstill Period”) the parties shall have worked
together, and shall continue to work together, in good faith with best efforts
to implement the terms of the Recapitalization Agreement, upon which the
parties shall have reached binding agreement and which the parties shall have
executed as a condition precedent to the execution and funding of this Note.
Except as provided in the fiduciary exception set forth in Section 3.2 of the
Recapitalization Agreement, during the Standstill Period, the Maker and its
officers, directors, employees, agents, advisers, consultants, partners and
collaborators shall work only with Holder and its agents, advisers and
consultants, and shall have had, and shall continue to have, no discussions,
negotiations and/or communications of any kind with any other parties,
regardless of which party initiates or attempts to initiate any such contact or
communication, in regard to any potential equity or debt financing of the Maker
by parties other than Holder, and/or any joint venture, license, co-development
or other business arrangement by or with parties other than Holder.
Notwithstanding the fiduciary exception set forth in Section 3.2 of the
Recapitalization Agreement, during the Standstill Period, the Maker and its
officers, directors, employees, agents, advisers, consultants, partners and
collaborators shall maintain confidentiality, and shall not have, and shall
continue not to provide copies, excerpts, summaries, descriptions, or
communicate in any way with any third parties, either directly or indirectly,
as to any aspects of the recapitalization of Maker and/or any financing by
Holder, including, without limitation, the identity of the parties involved,
any terms of the Recapitalization Agreement, this Note, the Related
Recapitalization Documents, the Convertible Preferred Stock or any other matter
relating to the recapitalization of Maker, or the progress or status of any
activities or processes relating to the recapitalization of Maker; provided,
however, nothing herein shall prohibit the Maker from filing this Note, the
Recapitalization Agreement and any Related Recapitalization Document with the
Securities and Exchange Commission (the “SEC”), if required by the regulations
of the SEC (subject to the covenant in Section 2.5(a) of the Recapitalization
Agreement). During the Standstill Period, the Maker shall not make any sales
of equipment or other assets of any kind, including, without limitation, any
non-essential laboratory equipment, and the Maker shall comply with Section
10.3 in regard to the TFF devices.

SECTION 14. REPRESENTATIONS AND WARRANTIES.

Except as expressly set forth (with reference to a section in this Note) in the
Disclosure Schedule attached hereto as Exhibit B, and only to the extent such
exceptions are acceptable to Holder in its sole discretion as of the date of
this Note, and independently as of the date upon which each additional Note is
issued to Holder, and as of the date of each closing, if any, of the
Anticipated Equity Financing, Maker represents and warrants to the following:

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     14.1 Organization, Good Standing and Qualification. Maker is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business. Maker is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure so
to qualify would have a material adverse effect on its business, properties,
operations, prospects or condition (financial or otherwise).

     14.2 Authorization of Note, Etc. The execution, delivery and performance
by Maker of this Note has been duly authorized by all requisite corporate
action by Maker in accordance with Delaware law. This Note is a valid and
binding obligation of Maker, enforceable against Maker in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or other laws of general application effecting enforcements of
creditors’ rights or general principles of equity.

     14.3 No Conflicts. The execution, delivery, performance, issuance, sale
and delivery of this Note and the Related Recapitalization Documents, and
compliance with the provisions hereof by Maker, will not (a) to the knowledge
of Maker, violate any provision of any law, statute, rule or regulation
applicable to Maker or any ruling, writ, injunction, order, judgment or decree
of any court, arbitrator, administrative agency or other governmental body
applicable to Maker or any of its properties or assets or (b) conflict with or
result in any material breach of any of the terms, conditions or provisions of,
or constitute (with notice or lapse of time or both) a material default (or
give rise to any right of termination, cancellation or acceleration) under, or
result in the creation of, any encumbrance upon any of the material assets of
Maker under, the Charter or Bylaws of Maker (as they may be amended to date) or
any agreement or instrument to which Maker is a party. As used herein,
“encumbrance” shall mean any liens, charges, encumbrances, equities, claims,
options, proxies, pledges, security interests, licenses or other similar rights
of any nature.

     14.4 Compliance with Other Instruments. Maker is not in violation of any
term of Maker’s Charter, as amended, including any certificate of designation
filed therewith, and/or Maker’s Bylaws. Maker is not, in any material respect,
in violation of any term of any mortgage, indenture, contract, agreement,
instrument, judgment, decree, order, statute, rule or regulation to which Maker
or any of such Collateral is subject. To the best of Maker’s knowledge, no
event has occurred which, with the passage of time or the giving of notice, or
both, would constitute a breach or violation, in any material respect, under
any applicable judgments, orders, writs, decrees, federal, state and/or local
laws, rules or regulations which would have a material adverse affect on the
condition, financial or otherwise, or operations of Maker (as it is currently
conducted and as it is proposed to be conducted) or on any material assets or
any Intellectual Property or other Collateral owned, controlled, licensed,
possessed, and/or used by Maker. To the best of its knowledge, Maker has
avoided every condition, and has not performed any act, the occurrence of which
would result in Maker’s loss of any right granted under any license,
distribution agreement or other agreement or Maker’s loss of any rights in or
to any Collateral.

     14.5 Approvals. Maker has obtained all necessary permits, authorizations,
waivers, consents and approvals of or by, and made all necessary notifications
of and/or filings with, all applicable persons (governmental and private), in
connection with the execution, delivery, performance, issuance, sale and/or
delivery of this Note, the Recapitalization Agreement and the

15

 

Related Recapitalization Documents, and consummation by Maker of the
transactions contemplated hereby and thereby, except as listed in Schedule 14.5

     14.6 Capitalization. The authorized capital stock of Maker consists of
125,000,000 shares of Common Stock, par value $0.001 per share and 15,000,000
shares of Preferred Stock, par value of $0.001 per share. As of the date
hereof, 19,028,779 shares of Common Stock are issued and outstanding and no
shares of preferred stock of any kind are issued and outstanding. No other
shares of any class or series of Maker’s capital stock are authorized and/or
issued and outstanding. All issued and outstanding shares of capital stock of
Maker have been duly authorized and validly issued, and are fully paid and
non-assessable, and have been offered, sold and delivered by Maker in
compliance with all applicable federal and state securities laws. Except as
set forth in Schedule 14.6, no subscription, warrant, option, convertible
security, or other right (direct or indirect, contingent or otherwise) to
purchase or otherwise acquire any equity securities of Maker is authorized or
outstanding, and there is no agreement, promise, commitment, undertaking or
letter of intent of any kind (direct or indirect, contingent or otherwise) by
Maker to issue any shares, subscriptions, warrants, options, convertible
securities, or other such rights, or to distribute to holders of any of its
equity securities any evidence of indebtedness or asset. Except as set forth
in Schedule 14.6, Maker has no obligation of any kind (direct or indirect,
contingent or otherwise) to purchase, redeem or otherwise acquire any of its
equity securities or any interest therein or to pay any dividend or make any
other distribution in respect thereof. Schedule 14.6 includes a true, accurate
and complete statement describing the total number of shares of Maker
outstanding as of the date of this Note (on a fully diluted basis, including,
without limitation, all warrants and options outstanding (whether or not
currently exercisable), all convertible instruments of any kind (whether or not
currently convertible), shares of all classes of stock, and any agreements,
promises, commitments, undertakings or letters of intent to issue any of the
foregoing.

     14.7 Authorization of the Shares. Maker has, or before the first closing
of the Anticipated Equity Financing hereunder will have, authorized the
issuance and sale of a sufficient number of shares of Convertible Preferred
Stock, par value $0.001 per share, and Common Stock of the Maker to fully
implement the Recapitalization Plan, while maintaining such additional
authorized but unissued shares as reasonably determined by Holder to be
appropriate. Of such authorized shares, a sufficient number of shares shall be
reserved for issuance upon any exercise of the Bridge Warrants and/or Preferred
Stock Warrants. If at any time the number of authorized but unissued shares of
Convertible Preferred Stock and/or of Common Stock is not sufficient to effect
the conversion of all then outstanding convertible Notes and other instruments,
and the exercise of all then outstanding warrants, options and similar
instruments, then, in addition to such other remedies as may be available to
Holder, Maker shall take such corporate action as may be necessary to increase
its authorized but unissued shares of Convertible Preferred Stock and/or Common
Stock to such number of shares as will be sufficient for such purposes. Such
corporate action shall include, without limitation, obtaining all requisite
regulatory approvals and any requisite shareholder approval of any necessary
amendment to Maker’s Charter.

     14.8 Litigation. There is no action, suit, proceeding or investigation
pending or, to the knowledge of Maker, currently threatened against Maker,
and/or its directors, officers, advisers, agents, properties, assets or
business, in each case relating to Maker and/or its business, assets,

16

 

operations or properties. Maker is not a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality. There is no action, suit, proceeding or
investigation by Maker currently pending or which Maker intends to initiate.

     14.9 No Liens. Except for liens for the benefit of Holder, created by
this Note, the Recapitalization Agreement and/or any of the Related
Recapitalization Documents, and except as set forth in Schedule 14.9 of the
Disclosure Schedule, none of the material assets of Maker, including the
Collateral, are subject to any existing lien, pledge, security interest or
other encumbrance of any kind, direct or indirect, contingent or otherwise.

     14.10 Full Disclosure. Notwithstanding any other provision of this Note,
neither this Note, nor any exhibit hereto, nor any written report, certificate,
instrument or other information furnished to Holder in connection with the
transactions contemplated under and/or in connection with Note contain any
material misstatement (including, without limitation, any material omission),
or is misleading in any material respect.

     14.11 No Other Security Interests or Other Encumbrances. Except as set
forth in Schedule 14.11 (and only to the amounts set forth on such schedule),
there are no existing security interests, pledges, liens or other encumbrances
of any kind, direct or indirect, contingent or otherwise (including without
limitation any licensing or partnering arrangements or agreements), in or
relating to any assets of Maker, including, without limitation, any
Intellectual Property (as defined herein) or other Collateral. All existing
security interests, pledges, liens or other encumbrances of any kind, other
than those set forth in Schedule 14.11 hereto (and only to the amounts set
forth on such schedule), are subordinate to the security interest established
pursuant to Section 11 hereof, all necessary consents, subordination agreements
and waivers, if any, have been obtained, and all amended filings and/or
re-filings shall be made immediately upon execution of this Note.

     14.12 “Small Business”.

               (a) Small Business Status. Maker together with its “affiliates” (as that
term is defined in Section 121.103 of Title 13 of Code of Federal Regulations
(the “Federal Regulations”)) is a “small business concern” within the meaning
of the Small Business Investment Act of 1958, as amended (the “Small Business
Act” or “SBIA”), and the regulations promulgated thereunder, including Section
121.301(c) of Title 13, Code of Federal Regulations.

               (b) Information for SBA Reports. Maker has delivered and/or will deliver
to Holder certain information, set forth by and regarding the Maker and its
affiliates in connection with this Note, on SBA Forms 480, 652 and Part A and B
of Form 1031. This information delivered was true, accurate, complete and
correct, and any information yet to be delivered will be true, accurate,
complete and correct, and in form and substance acceptable to Holder.

               (c) Eligibility. Maker is eligible for financing by any Holder pursuant
to Section 107.720 of Title 13 of the Federal Regulations and any other SBA
regulations.

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     14.13 Intellectual Property.

               (d) Definitions. “Intellectual Property” means all foreign and domestic
intangible property and rights, owned, licensed, sub-licensed or otherwise
obtained by Maker, including, without limitation, (i) inventions, discoveries
and ideas, whether patentable or not, and all patents, registrations and
applications therefor, including divisions, continuations,
continuations-in-part, requests for continued examination, and renewal
applications, and including renewals, extensions and reissues (collectively,
“Patents”); (ii) confidential and proprietary information, trade secrets and
know-how, including without limitation processes, schematics, formulae,
drawings, prototypes, models, designs and customer lists (collectively, “Trade
Secrets”); (iii) all data, slides, observations, and laboratory results,
produced by, for or on behalf of Maker, or which Maker has rights to obtain
(collectively, “Data”); (iv) all FDA applications, registrations, filings and
other rights (collectively, “FDA Rights”) and all data and documentation
supporting or relating thereto; (iv) published and unpublished works of
authorship, whether copyrightable or not (including, without limitation,
databases and other compilations of information), copyrights therein and
thereto, and registrations and applications therefor, and all renewals,
extensions, restorations and reversions thereof (collectively, “Copyrights”);
(v) trademarks, service marks, brand names, certification marks, collective
marks, d/b/a’s, Internet domain names, logos, symbols, data, trade dress,
assumed names, fictitious names, trade names, and other indicia of origin, all
applications and registrations for the foregoing, and all goodwill associated
therewith and symbolized thereby, including all extensions, modifications and
renewals of same (collectively, “Trademarks”); (vi) all other intellectual
property or proprietary rights, including, without limitation, all claims or
causes of action arising out of or related to any infringement,
misappropriation or other violation of any of the foregoing, including rights
to recover for past, present and future violations thereof (collectively,
“Other Proprietary Rights”).

     “Intellectual Property Contracts” means all agreements involving,
relating to or affecting the Intellectual Property, including, without
limitation, agreements granting rights to use the Licensed or Sub-Licensed
Intellectual Property, agreements granting rights to use Owned Intellectual
Property, confidentiality agreements, Trademark coexistence agreements,
Trademark consent agreements and non-assertion agreements.

     “Licensed or Sub-Licensed Intellectual Property” means the Intellectual
Property that Maker is licensed, sub-licensed or otherwise permitted by other
persons or entities to use.

     “Owned Intellectual Property” means the Intellectual Property owned by
Maker.

     “Registered” means issued, registered, renewed or the subject of a
pending application.

               (e) Schedule 14.13 (“Intellectual Property”) sets forth a true and
complete list and summary description of (A) all Registered or material Owned
Intellectual Property (each identified as a Patent, Trademark, Trade Secret,
Copyright or Other Proprietary Right, as the case may be); (B) all Licensed or
Sub Licensed Intellectual Property and (C) all Intellectual Property Contracts.

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               (f) All Intellectual Property is valid, subsisting and enforceable. No
Owned Intellectual Property has been canceled, suspended, adjudicated invalid,
not maintained, expired or lapsed, or is subject to any outstanding order,
judgment or decree restricting its use or adversely affecting or reflecting
Maker’s rights thereto. No Licensed or Sub-Licensed Intellectual Property has
been canceled, suspended, not renewed or extended, adjudicated invalid, not
maintained, expired or lapsed, or is subject to any outstanding order, judgment
or decree restricting its use or adversely affecting or reflecting Maker’s
rights thereto.

               (g) The Owned Intellectual Property is owned exclusively by Maker and has
been used with all patent, trademark, copyright, confidential, proprietary and
other Intellectual Property notices and legends prescribed by law or otherwise
permitted.

               (h) No suit, action, reissue, reexamination, public protest, interference,
opposition, cancellation or other proceeding (collectively, “Suit”) is pending
or threatened concerning any claim or position:

                    (i) that Maker, or another person or entity, has violated any Intellectual
Property rights. To Maker’s best knowledge, Maker is not violating and has not
violated any intellectual property rights of any other party.

                    (ii) that Maker, or another person or entity, has breached any
Intellectual Property Contract. There exists no event, condition or occurrence
which, with the giving of notice or lapse of time, or both, would constitute a
breach or default by Maker, or a breach or default by another person or entity,
under any Intellectual Property Contract. No party to any Intellectual
Property Contract has given Maker notice of its intention to cancel, terminate
or fail to renew any Intellectual Property Contract.

                    (iii) that the Intellectual Property has been violated or is invalid,
unenforceable, unpatentable, unregisterable, cancelable, not owned or not owned
exclusively by Maker. No such claim has been threatened or asserted. To
Maker’s best knowledge, no valid basis for any such Suits or claims exists.

               (i) To Maker’s best knowledge, no other person or entity is violating,
infringing upon or claiming rights incompatible with Maker’s rights to any
Intellectual Property. Maker has provided to Holder copies of all information
reasonably available to it relevant to intellectual property rights claimed by
third parties and possible infringement thereof including, without limitation,
any freedom to practice or freedom to operate opinions.

               (j) Except as set forth on Schedule 14.13(j), Maker owns or otherwise
holds valid rights to use all Intellectual Property used in its business.

               (k) Maker has timely made all filings and payments with the appropriate
foreign and domestic agencies and other parties required to maintain in full
force and effect all Intellectual Property. Except as set forth on Schedule
14.13, no due dates for filings or payments concerning the Intellectual
Property (including, without limitation, office action responses,

19

 

affidavits of use, affidavits of continuing use, renewals, requests for
extension of time, maintenance fees, application fees and foreign convention
priority filings) fall due within ninety (90) days prior to or after the
closing, whether or not such due dates are extendable. Maker is in compliance
with all applicable rules and regulations of such agencies and other parties
with respect to the Intellectual Property. All documentation necessary to
confirm and effect the Intellectual Property, if acquired from other persons or
entities, has been recorded in the United States Patent and Trademark Office,
the United States Copyright Office and other official offices.

               (l) Maker has undertaken and consistently implemented best efforts to
protect the secrecy, confidentiality and value of all non-public Intellectual
Property used in its business (including, without limitation, entering into
appropriate confidentiality agreements with all officers, directors, employees
and other persons or entities with access to such non-public Intellectual
Property). Maker management has not disclosed any such non-public Intellectual
Property to any persons or entities other than (i) Maker employees or Maker
contractors who had a need to know and use such non-public Intellectual
Property in the ordinary course of employment or contract performance, or (ii)
prospective customers, and in each case who executed appropriate
confidentiality agreements.

               (m) Maker has taken all reasonable measures to confirm that no current or
former Maker employee is or was a party to any confidentiality agreement or
agreement not to compete that restricts or forbids, or restricted or forbade at
any time during such employee’s employment by Maker, such employee’s
performance of Maker’s business, or any other activity that such employee was
hired to perform or otherwise performed on behalf of or in connection with such
employee’s employment by Maker.

     14.14 SEC Filings; Financial Statements.

     (a) Maker has delivered or made available to Holder accurate and complete
copies of all registration statements, proxy statements and other statements,
reports, schedules, forms and other documents filed by the Maker with the SEC
since January 1, 2003, and all amendments thereto (the “Maker SEC Documents”).
Except as set forth on Schedule 14.14(a), all statements, reports, schedules,
forms and other documents required to have been filed by Maker with the SEC
have been so filed on a timely basis. As of the time it was filed with the
SEC (or, if amended or superseded by a filing prior to the date of this Note,
then on the date of such filing): (i) each of the Maker SEC Documents complied
in all material respects with the applicable requirements of the Securities Act
or the Exchange Act (as the case may be); and (ii) none of the Maker SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

     (b) The financial statements (including any related notes) contained in
the Maker SEC Documents: (i) complied as to form in all material respects with
the published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered (except as may be indicated
in the notes to such financial statements or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC, and except that the unaudited
financial

20

 

statements may not contain footnotes and are subject to normal and
recurring year-end adjustments that will not, individually or in the aggregate,
be material in amount), and (iii) fairly present the consolidated financial
position of Maker and its consolidated subsidiaries as of the respective dates
thereof and the consolidated results of operations and cash flows of Maker and
its consolidated subsidiaries for the periods covered thereby.

     14.15 Liabilities. Maker has no accrued, contingent or other liabilities
of any nature, either matured or unmatured, except for: (a) liabilities
identified as such in Maker’s audited balance sheet as of December 31, 2003, or
the notes thereto; (b) liabilities that have been incurred by Maker since
December 31, 2003 in the ordinary course of business and consistent with past
practices, and that do not exceed a maximum potential amount of $330,000; and
(c) expenses that have been incurred by the Maker (but not including any
expenses of Holder that Maker is obligated to reimburse in connection
therewith) in the preparation and review of the Recapitalization Agreement and
the Related Recapitalization Documents, and that do not exceed $72,000.

     14.16 Compliance with All Standstill Provisions. Maker has complied in
all respects with all standstill, exclusivity and confidentiality provisions of
(a) this Note, the Recapitalization Agreement and the Related Recapitalization
Documents, (b) Section 13 of that certain 10% Convertible, Secured Promissory
Note by and between Maker and Holder dated as of February 2, 2004 and (c)
Section 13 of that certain 10% Convertible, Secured Promissory Note by and
between Maker and Holder dated as of March 1, 2004.

SECTION 15. INDEMNIFICATION

     15.1 Indemnification Agreement.

            (a) In addition to all rights and remedies available to Holder at law or
in equity, Maker shall indemnify Holder and each subsequent holder of this
Note, and their respective affiliates, stockholders, limited partners, general
partners, officers, directors, managers, employees, agents, representatives,
successors and assigns (collectively, the “Indemnified Persons”) and save and
hold each of them harmless against and pay on behalf of or reimburse such party
as and when incurred for any loss, liability, demand, claim, action, cause of
action, cost, damage, deficiency, tax, penalty, fine or expense (other than any
demand, claim, action or cause of action instituted by Maker), including
interest, penalties, reasonable attorneys’ fees and expenses, and all amounts
paid in investigation, defense or settlement of any of the foregoing
(collectively, “Losses) which any such party may suffer, sustain or become
subject to, as a result of, in connection with, relating or incidental to or by
virtue of:

            (i) any material misrepresentation in, or material omission from, or
breach of any of the representations, warranties, statements, schedules
and/or exhibits hereto, certificates or other instruments or documents
furnished to Holder by Maker in connection with this Note; or

            (ii) any material nonfulfillment or material breach of any covenant
or agreement on the part of Maker under this Note.

21

 

            (b) Notwithstanding the foregoing, Maker shall not be liable for any
portion of Losses resulting from the gross negligence or willful misconduct of
Holder or a subsequent holder of this Note.

            (c) Within twenty (20) days after receipt of notice of commencement of any
action or the assertion of any claim by a third party, Holder shall give Maker
written notice thereof together with a copy of such claim, process or other
legal pleading of such claim. Maker shall have the right to assist in the
defense thereof by representation of its own choosing.

     15.2 Survival. All indemnification rights hereunder shall survive the
execution and delivery of this Note and the consummation of the transactions
contemplated hereby (i) for a period of two years with respect to
representations and warranties made by Maker, and (ii) until fully performed
with respect to covenants and agreements made by Maker, regardless of any
investigation, inquiry or examination made for or on behalf of, or any
knowledge of Holder and/or any of the Indemnified Persons, or the acceptance by
Holder of any certificate or opinion.

     15.3 Payment. Any indemnification of Holder or any other Indemnified
Person by Maker pursuant to this Section 15 shall be effected by wire transfer
of immediately available funds from Maker to an account designated by Holder or
such other Indemnified Person within fifteen (15) days after the determination
thereof.

SECTION 16. INTEGRATION WITH RECAPITALIZATION PLAN

Maker acknowledges and agrees that the funding provided by Holder pursuant to
this Note is only being provided as part of an integrated Recapitalization
Plan, as set forth in the Recapitalization Agreement. Maker further
acknowledges and agrees that this Note is subject to all terms and conditions
set forth in the Recapitalization Agreement.

SECTION 17. MISCELLANEOUS.

     17.1 Notices. All notices, demands and requests of any kind to be
delivered to any party in connection with this Note shall be in writing and
shall be deemed to be effective upon delivery if (i) personally delivered, (ii)
sent by confirmed facsimile with a copy sent by nationally recognized overnight
courier, (iii) sent by nationally recognized overnight courier, or (iv) sent by
registered or certified mail, return receipt requested and postage prepaid,
addressed as follows:

	 	 	 
	if to Maker:

	 	Northwest Biotherapeutics, Inc.
	

	 	22322 20th Ave SE, Suite 150
	

	 	Bothell, WA 98021
	

	 	Fax: (425) 608 3146
	

	 	Attn: Alton Boynton

22

 

	 	 	 
	if to Holder:

	 	Toucan Capital Fund II, LP
	

	 	7600 Wisconsin Avenue
	

	 	Suite 700
	

	 	Bethesda, MD 20814
	

	 	Fax: (240) 497-4060
	

	 	Attention: Linda F. Powers

or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance with the
provisions of this Section.

     17.2 Parties In Interest. This Note shall bind and inure to the benefit
of Holder, Maker and their respective successors and permitted assigns. Maker
shall not transfer or assign this Note without the prior written consent of
Holder. Holder may transfer and assign this note without the prior consent of
Maker.

     17.3 Entire Agreement. This Note together with the Disclosure Schedule
and the Recapitalization Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings among the parties with respect thereto.

     17.4 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Delaware (without giving effect to
principles of conflicts of laws of the State of Delaware or any other state).

     17.5 Headings. The section and paragraph headings contained in this Note
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Note.

     17.6 Amendments. No provision of this Note may be amended or waived
without the express written consent of both Maker and Holder, provided,
however, that Holder may waive any provision hereof that inures to the benefit
of Holder without the prior written consent of Maker. Also notwithstanding
anything to the contrary, this Note shall be amended as and to the extent
necessary to comply with the Small Business Investment Act and all regulations,
advice, direction and guidance applicable to SBIC’s.

     17.7 Nature of Obligation. This Note is being made for business and
investment purposes, and not for household or other purposes.

     17.8 Expenses. Maker shall pay, reimburse or otherwise satisfy, upon
demand of Holder, all fees, costs and expenses incurred and/or undertaken, and
to be incurred and/or undertaken, by Holder relating to the preparation for,
development of and implementation of the Recapitalization Plan set forth in the
Recapitalization Agreement, including, without limitation, all due diligence
expenses and all expenses relating to the Bridge Funding, the Anticipated
Equity Financing and the transactions contemplated thereby and the
documentation of the foregoing (including, without limitation all legal fees
and expenses and costs incurred and to be incurred in connection with any SBA
filings), which shall be satisfied by Maker upon Holder’s

23

 

demand, including but without limitation upon each closing of the Bridge
Funding or Anticipated Equity Financing. This obligation shall apply
regardless of whether or not all of the transactions contemplated in the
Recapitalization Agreement close. At each closing of Bridge Funding or
Anticipated Equity Financing, at Holder’s sole discretion, and with respect to
any or all of such fees, costs and expenses accrued through such closing, Maker
shall (a) pay Holder in cash concurrently with such closing (or at Holder’s
sole discretion, Investor may withhold such amount from the wire of investment
proceeds), (b) issue a Note in the form hereof in principal amount equal to
such fees, costs and expenses (which at Holder’s option may instead be
evidenced as an increase in the principal amount of any Note issued in
connection with such closing); or (c) treat such fees, costs and expenses as an
unsecured payable. At any time following such closing, Holder may require any
amounts that it elected to have Maker treat as unsecured amounts payable to be
paid in cash or satisfied by issuance of a Note in the principal amount of some
or all of such unsecured obligation.

24

 

     IN WITNESS WHEREOF, Maker has caused this Note to be duly executed by its
duly authorized person(s) as of the date first written above.

	 	 	 	 	 
	 	 	NORTHWEST BIOTHERAPEUTICS, INC.
	 
	 	 	 	 
	

	 	By
	 	/s/ Alton L. Boynton

	

	 	Name:
	 	/s/ Alton L. Boynton

	

	 	Title:	 	President

Consent and Agreement

     Toucan Capital Fund II, L.P. consents to the loan and security interest
granted by Maker in the foregoing Note.

	 	 	 	 	 
	 	 	TOUCAN CAPITAL FUND II, L.P.
	 
	 	 	 	 
	

	 	By:
	 	/s/ Linda F. Powers
	

	 	 	 	
 
	

	 	Name:
	 	Linda F. Powers

	

	 	Title:
	 	Managing Director

25

 

EXHIBIT A

DESCRIPTION OF COLLATERAL

     The “Collateral” consists of all of Maker’s right, title and interest (in
each case, whether now owned or hereafter acquired) in and to the following:

     (a) All intellectual property of any kind, whether owned, licensed or
otherwise permitted to be used, and whether now held or hereafter acquired or
developed (the “Intellectual Property”). Such Intellectual Property shall
include, without limitation, all foreign and domestic intangible property and
rights, owned, licensed or otherwise obtained by Maker, including, without
limitation, (i) trademarks, service marks, brand names, certification marks,
collective marks, d/b/a’s, Internet domain names, logos, symbols, trade dress,
assumed names, fictitious names, trade names, and other indicia of origin, all
applications and registration for the foregoing, and all goodwill associated
therewith and symbolized thereby, including all extensions, modifications and
renewals of same, including without limitation those items reference on
Appendix 1 hereto (collectively, “Trademarks”); (ii) inventions, discoveries
and ideas, whether patentable or not, and all patents, registrations and
applications therefor, including divisions, continuations,
continuations-in-part, requests for continued examination, and renewal
applications, and including renewals, extensions and reissues, including
without limitation those items reference on Appendix 2 hereto (collectively,
“Patents”); (iii) confidential and proprietary information, trade secrets and
know-how, including, without limitation, processes, schematics, formulae,
drawings, prototypes, models, designs and customer lists
(collectively, “Trade
Secrets”); (iv) published and unpublished works of authorship, whether
copyrightable or not (including, without limitation, databases and other
compilations of information), copyrights therein and thereto, and registrations
and applications therefor, and all renewals, extensions, restorations and
reversions thereof (collectively, “Copyrights”); (v) all FDA applications,
registrations, filings and other rights (collectively, “FDA Rights and
Materials”); (vi) all results, information and data arising from, or obtained
in connection with, research, development, pre-clinical work and/or clinical
trials (collectively, “Data”); and (vii) all other intellectual property or
proprietary rights and claims or causes of action arising out of or related to
any infringement, misappropriation or other violation of any of the foregoing,
including rights to recover for past, present and future violations thereof
(collectively, “Other Proprietary Rights”).

     (b) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located.

     (c) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Maker’s custody or possession or in transit
and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing an any documents of title representing any of the above.

26

 

     (d) All contract rights, general intangibles and intellectual property,
now owned or hereafter acquired, including, without limitation, goodwill,
trademarks, service marks, trade styles, trade names, patents, patent
applications, leases, license agreements, franchise agreements, blueprints,
drawings, purchase orders, customer lists, route lists, infringements, claims,
computer programs, computer discs, computer tapes, computer code, copyrights,
literature, reports, catalogs, design rights, income tax refunds, payments of
insurance and rights to payment of any kind.

     (e) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Maker
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Maker, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefore, as well as
all merchandise returned to or reclaimed by Maker.

     (f) All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired and Maker’s books relating to the foregoing.

     (g) Each item of equipment, or personal property whether now owned or
hereafter acquired, together with all substitutions, renewals or replacements
of and additions, improvements, and accessions to any and all of the foregoing,
and all proceeds from sales, renewals, releases or other dispositions thereof.

     (h) All Maker’s books relating to the foregoing and any and all claims,
rights and interests in any of the above, whether now owned or hereafter
acquired, and all substitutions for, additions and accessions to and proceeds
thereof.

Notwithstanding the foregoing, to the extent any of Maker’s licensed
Intellectual Property prohibits the transfer or encumbrance of such licensed
Intellectual Property (the “Restricted Intellectual Property”) without prior
consent of the owner or licensor thereof, such Restricted Intellectual Property
is hereby conditionally included within the definition of Collateral, subject
to receipt, by or on behalf of Maker, of any required consents. If requested
by Holder, Maker shall use its best efforts to obtain the required consents
under any Restricted Intellectual Property within thirty (30) days of such
request.

27

 

Appendix 1

Trademarks

28

 

Appendix 2

Patents

29

 

EXHIBIT B

DISCLOSURE SCHEDULE

30

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