Document:

ACE SECURITIES CORP.
                                    Depositor

                            LITTON LOAN SERVICING LP
                                   a Servicer

                             WELLS FARGO BANK, N.A.
                  Master Servicer and Securities Administrator

                       HSBC BANK USA, NATIONAL ASSOCIATION
                                     Trustee

                         POOLING AND SERVICING AGREEMENT
                          Dated as of December 1, 2004

          ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM2
                     Asset Backed Pass-Through Certificates

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                                TABLE OF CONTENTS

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ARTICLE I DEFINITIONS.................................................................................................4

   SECTION 1.01.           Defined Terms..............................................................................4
      Accepted Master Servicing Practices.............................................................................4
      Accepted Servicing Practices....................................................................................4
      Account.........................................................................................................4
      Accrued Certificate Interest....................................................................................4
      Adjustable Rate Mortgage Loan...................................................................................4
      Adjustment Date.................................................................................................5
      Administration Fees.............................................................................................5
      Administration Fee Rate.........................................................................................5
      Advance Facility................................................................................................5
      Advance Financing Person........................................................................................5
      Advance Reimbursement Amounts...................................................................................5
      Affiliate.......................................................................................................5
      Aggregate Loss Severity Percentage..............................................................................5
      Agreement.......................................................................................................5
      Allocated Realized Loss Amount..................................................................................5
      Amounts Held for Future Distribution............................................................................5
      Assignment......................................................................................................5
      Assignment Agreement............................................................................................6
      Authorized Officers.............................................................................................6
      Available Distribution Amount...................................................................................6
      Balloon Mortgage Loan...........................................................................................6
      Balloon Payment.................................................................................................6
      Bankruptcy Code.................................................................................................6
      Book-Entry Certificates.........................................................................................7
      Book-Entry Custodian............................................................................................7
      Business Day....................................................................................................7
      Cap Contracts...................................................................................................7
      Cash-Out Refinancing............................................................................................7
      Certificate.....................................................................................................7
      Certificate Factor..............................................................................................7
      Certificate Margin..............................................................................................7
      Certificateholder...............................................................................................9
      Holder..........................................................................................................9
      Certificate Owner...............................................................................................9
      Certificate Principal Balance...................................................................................9
      Certificate Register............................................................................................9
      Class...........................................................................................................9
      Class A Certificate.............................................................................................9
      Class A Principal Distribution Amount..........................................................................10
      Class A-1 Principal Loss Amount................................................................................10

                                                           i

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      Class B Certificate............................................................................................10
      Class M-1 Certificate..........................................................................................10
      Class B Principal Distribution Amount..........................................................................10
      Class M-1 Certificate..........................................................................................11
      Class B Principal Distribution Amount..........................................................................11
      Class M-1 Certificate..........................................................................................11
      Class B Principal Distribution Amount..........................................................................12
      Class M-1 Certificate..........................................................................................12
      Class B Principal Distribution Amount..........................................................................12
      Class M-1 Certificate..........................................................................................13
      Class B Principal Distribution Amount..........................................................................13
      Class CE Certificate...........................................................................................14
      Class M Certificates...........................................................................................14
      Class M-1 Certificate..........................................................................................14
      Class M-1 Principal Distribution Amount........................................................................14
      Class M-2 Certificate..........................................................................................15
      Class M-2 Principal Distribution Amount........................................................................15
      Class M-3 Certificate..........................................................................................15
      Class M-3 Principal Distribution Amount........................................................................15
      Class M-4 Certificate..........................................................................................16
      Class M-4 Principal Distribution Amount........................................................................16
      Class M-5 Certificate..........................................................................................16
      Class M-5 Principal Distribution Amount........................................................................16
      Class M-6 Certificate..........................................................................................17
      Class M-6 Principal Distribution Amount........................................................................17
      Class M-7 Certificate..........................................................................................17
      Class M-7 Principal Distribution Amount........................................................................17
      Class P Certificate............................................................................................18
      Class R Certificates...........................................................................................18
      Class R-I Interest.............................................................................................18
      Class R-II Interest............................................................................................18
      Closing Date...................................................................................................18
      Code...........................................................................................................18
      Collection Account.............................................................................................18
      Commission.....................................................................................................18
      Corporate Trust Office.........................................................................................18
      Corresponding Certificate......................................................................................19
      Credit Enhancement Percentage..................................................................................19
      Custodial Account..............................................................................................19
      Custodial Agreement............................................................................................19
      Custodian......................................................................................................19
      Cut-off Date...................................................................................................19
      Debt Service Reduction.........................................................................................20
      Deficient Valuation............................................................................................20
      Definitive Certificates........................................................................................20
      Deleted Mortgage Loan..........................................................................................20
      Delinquency Percentage.........................................................................................20
      Depositor......................................................................................................20

                                                          ii

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      Depository.....................................................................................................20
      Depository Institution.........................................................................................20
      Depository Participant.........................................................................................20
      Determination Date.............................................................................................20
      Directly Operate...............................................................................................21
      Disqualified Organization......................................................................................21
      Distribution Account...........................................................................................21
      Distribution Date..............................................................................................21
      Due Date.......................................................................................................21
      Due Period.....................................................................................................22
      Eligible Account...............................................................................................22
      ERISA..........................................................................................................22
      Estate in Real Property........................................................................................22
      Excess Liquidation Proceeds....................................................................................22
      Expense Adjusted Mortgage Rate.................................................................................22
      Extraordinary Trust Fund Expense...............................................................................22
      Extra Principal Distribution Amount............................................................................22
      Fannie Mae.....................................................................................................22
      FDIC...........................................................................................................22
      Final Maturity Date............................................................................................22
      Final Recovery Determination...................................................................................23
      Freddie Mac....................................................................................................23
      Gross Margin...................................................................................................23
      Independent....................................................................................................23
      Independent Contractor.........................................................................................23
      Index..........................................................................................................24
      Institutional Accredited Investor..............................................................................24
      Insurance Proceeds.............................................................................................24
      Interest Accrual Period........................................................................................24
      Interest Carry Forward Amount..................................................................................24
      Interest Distribution Amount...................................................................................24
      Group I Interest Remittance Amount.............................................................................24
      Last Scheduled Distribution Date...............................................................................25
      Late Collections...............................................................................................25
      Litton Mortgage Loans..........................................................................................25
      Liquidation Event..............................................................................................25
      Liquidation Proceeds...........................................................................................25
      Loan-to-Value Ratio............................................................................................25
      London Business Day............................................................................................25
      Loss Severity Percentage.......................................................................................26
      Marker Rate....................................................................................................26
      Master Servicer................................................................................................26
      Master Servicer Certification..................................................................................26
      Master Servicer Event of Default...............................................................................26
      Master Servicer Fee Rate.......................................................................................26
      Master Servicing Fee...........................................................................................26
      Maximum I-LTZZ Uncertificated Interest Deferral Amount.........................................................27
      Maximum Mortgage Rate..........................................................................................27

                                                          iii

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      MERS...........................................................................................................27
      MERS(R) System...................................................................................................27
      Mezzanine Certificate..........................................................................................27
      MIN............................................................................................................27
      Minimum Mortgage Rate..........................................................................................27
      MOM Loan.......................................................................................................27
      Monthly Payment................................................................................................27
      Moody's........................................................................................................28
      Mortgage.......................................................................................................28
      Mortgage File..................................................................................................28
      Mortgage Loan..................................................................................................28
      Mortgage Loan Documents........................................................................................28
      Mortgage Loan Purchase Agreement...............................................................................28
      Mortgage Loan Schedule.........................................................................................28
      Mortgage Note..................................................................................................30
      Mortgage Rate..................................................................................................30
      Mortgaged Property.............................................................................................31
      Mortgagor......................................................................................................31
      Net Monthly Excess Cashflow....................................................................................31
      Net Mortgage Rate..............................................................................................31
      Net WAC Pass-Through Rate......................................................................................31
      Net WAC Rate Carryover Amount..................................................................................31
      New Lease......................................................................................................32
      Nonrecoverable P&I Advance.....................................................................................32
      Nonrecoverable Servicing Advance...............................................................................32
      Non-United States Person.......................................................................................32
      Notional Amount................................................................................................32
      Offered Certificates...........................................................................................32
      Officer's Certificate..........................................................................................32
      One-Month LIBOR................................................................................................32
      One-Month LIBOR Pass-Through Rate..............................................................................33
      Opinion of Counsel.............................................................................................34
      Optional Termination Date......................................................................................34
      Originators....................................................................................................34
      Overcollateralization Amount...................................................................................34
      Overcollateralization Increase Amount..........................................................................34
      Overcollateralization Reduction Amount.........................................................................34
      Ownership Interest.............................................................................................35
      P&I Advance....................................................................................................35
      Pass-Through Rate..............................................................................................35
      Percentage Interest............................................................................................36
      Periodic Rate..................................................................................................37
      Permitted Investments..........................................................................................37
      Permitted Transferee...........................................................................................38
      Person.........................................................................................................38
      Plan...........................................................................................................39
      Prepayment Assumption..........................................................................................39
      Prepayment Charge..............................................................................................39

                                                          iv

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      Prepayment Charge Schedule.....................................................................................39
      Prepayment Interest Excess.....................................................................................39
      Prepayment Interest Shortfall..................................................................................40
      Prepayment Period..............................................................................................40
      Principal Prepayment...........................................................................................40
      Group I Principal Distribution Amount..........................................................................40
      Group I Principal Remittance Amount............................................................................40
      Purchase Price.................................................................................................40
      QIB............................................................................................................41
      Qualified Substitute Mortgage Loan.............................................................................41
      Rate/Term Refinancing..........................................................................................42
      Rating Agency or Rating Agencies...............................................................................42
      Realized Loss..................................................................................................42
      Record Date....................................................................................................43
      Reference Banks................................................................................................43
      Refinanced Mortgage Loan.......................................................................................44
      Regular Certificate............................................................................................44
      Regular Interest...............................................................................................44
      Regulation S Temporary Global Certificate......................................................................44
      Regulation S Permanent Global..................................................................................44
      Release Date...................................................................................................44
      Relief Act.....................................................................................................44
      Relief Act Interest Shortfall..................................................................................44
      REMIC..........................................................................................................44
      REMIC I........................................................................................................44
      REMIC I Interest Loss Allocation Amount........................................................................45
      REMIC I Overcollateralization..................................................................................45
      REMIC I Principal Loss Allocation Amount.......................................................................45
      REMIC I Regular Interest.......................................................................................45
      REMIC I Regular Interest I-LTAA................................................................................45
      REMIC I Regular Interest I-LTA1................................................................................46
      REMIC I Regular Interest I-LTB.................................................................................46
      REMIC I Regular Interest I-LTB.................................................................................46
      REMIC I Regular Interest I-LTB.................................................................................46
      REMIC I Regular Interest I-LTB.................................................................................46
      REMIC I Regular Interest I-LTB.................................................................................46
      REMIC I Regular Interest I-LTM1................................................................................46
      REMIC I Regular Interest I-LTM2................................................................................47
      REMIC I Regular Interest I-LTM3................................................................................47
      REMIC I Regular Interest I-LTM4................................................................................47
      REMIC I Regular Interest I-LTM5................................................................................47
      REMIC I Regular Interest I-LTM6................................................................................47
      REMIC I Regular Interest I-LTM7................................................................................47
      REMIC I Regular Interest I-LTP.................................................................................47
      REMIC I Regular Interest I-LTZZ................................................................................48
      REMIC I Remittance Rate........................................................................................48
      REMIC I Required Overcollateralization.........................................................................48
      REMIC II.......................................................................................................48

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      REMIC II Certificate...........................................................................................48
      REMIC II Certificateholder.....................................................................................48
      REMIC Provisions...............................................................................................48
      REMIC Regular Interest.........................................................................................48
      REMIC Remittance Rate..........................................................................................48
      Remittance Report..............................................................................................48
      Rents from Real Property.......................................................................................48
      REO Account....................................................................................................48
      REO Disposition................................................................................................49
      REO Imputed Interest...........................................................................................49
      REO Principal Amortization.....................................................................................49
      REO Property...................................................................................................49
      Required Overcollateralization.................................................................................49
      Reserve Fund...................................................................................................49
      Reserve Interest Rate..........................................................................................49
      Residential Dwelling...........................................................................................50
      Residual Certificate...........................................................................................50
      Residual Interest..............................................................................................50
      Responsible Officer............................................................................................50
      Rule...........................................................................................................50
      S&P............................................................................................................50
      Scheduled Principal Balance....................................................................................50
      Securities.....................................................................................................51
      Securities Administrator.......................................................................................51
      Seller.........................................................................................................51
      Senior Interest Distribution Amount............................................................................51
      Servicer.......................................................................................................51
      Servicer Event of Default......................................................................................51
      Servicer Remittance Date.......................................................................................51
      Servicer Report................................................................................................51
      Servicing Advance..............................................................................................51
      Servicing Agreement............................................................................................52
      Servicing Fee..................................................................................................52
      Servicing Fee Rate.............................................................................................52
      Servicing Officer..............................................................................................52
      Servicing Transfer Date........................................................................................52
      Single Certificate.............................................................................................52
      Startup Day....................................................................................................52
      Stated Principal Balance.......................................................................................52
      Stepdown Date..................................................................................................53
      Subordinate Certificates.......................................................................................53
      Subsequent Recoveries..........................................................................................53
      Sub-Servicer...................................................................................................53
      Sub-Servicing Agreement........................................................................................54
      Substitution Shortfall Amount..................................................................................54
      Tax Returns....................................................................................................54
      Telerate Page..................................................................................................54
      Termination Price..............................................................................................54

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      Terminator.....................................................................................................54
      Transfer.......................................................................................................54
      Transferee.....................................................................................................54
      Transferor.....................................................................................................54
      Trigger Event..................................................................................................54
      Trust..........................................................................................................54
      Trust Fund.....................................................................................................55
      Trust REMIC....................................................................................................55
      Trustee........................................................................................................55
      Uncertificated Balance.........................................................................................55
      Uncertificated Interest........................................................................................55
      Uninsured Cause................................................................................................55
      United States Person...........................................................................................55
      Value..........................................................................................................56
      Verification Report............................................................................................56
      Voting Rights..................................................................................................56
      Wells Fargo....................................................................................................56
   SECTION 1.02.           Allocation of Certain Interest Shortfalls.................................................56

ARTICLE II CONVEYANCE OF MORTGAGE LOANS;.............................................................................58

   SECTION 2.01.           Conveyance of the Mortgage Loans..........................................................58
   SECTION 2.02.           Acceptance of REMIC I by Trustee..........................................................59
   SECTION 2.03.           Repurchase or Substitution of Mortgage Loans..............................................59
   SECTION 2.04.           Representations and Warranties of the Master Servicer.....................................62
   SECTION 2.05.           Representations, Warranties and Covenants of the Servicer.................................63
   SECTION 2.06.           Issuance of the REMIC I Regular Interests and the Class R-I Interest......................65
   SECTION 2.07.           Conveyance of the REMIC I Regular Interests; Acceptance of REMIC I by the Trustee.........66
   SECTION 2.08.           Issuance of Residual Certificates.........................................................66
   SECTION 2.09.           Establishment of the Trust................................................................66

ARTICLE III ADMINISTRATION AND SERVICING OF THE LITTON MORTGAGE LOANS; ACCOUNTS......................................67

   SECTION 3.01.           The Servicer to Act as a Servicer.........................................................67
   SECTION 3.02.           Sub-Servicing Agreements Between the Servicer and Sub-Servicers...........................70
   SECTION 3.03.           Successor Sub-Servicers...................................................................70
   SECTION 3.04.           No Contractual Relationship Between Sub-Servicer, Trustee or the Certificateholders.......71
   SECTION 3.05.           Assumption or Termination of Sub-Servicing Agreement by Successor Servicer................71
   SECTION 3.06.           Collection of Certain Mortgage Loan Payments..............................................71
   SECTION 3.07.           Collection of Taxes, Assessments and Similar Items; Servicing Accounts....................72
   SECTION 3.08.           Collection Account and Distribution Account...............................................73
   SECTION 3.09.           Withdrawals from the Collection Account and Distribution Account..........................75

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   SECTION 3.10.           Investment of Funds in the Investment Accounts............................................77
   SECTION 3.11.           Maintenance of Hazard Insurance, Errors and Omissions and Fidelity Coverage and Primary
                           Mortgage Insurance........................................................................78
   SECTION 3.12.           Enforcement of Due-on-Sale Clauses; Assumption Agreements.................................80
   SECTION 3.13.           Realization Upon Defaulted Mortgage Loans.................................................81
   SECTION 3.14.           Trustee to Cooperate; Release of Mortgage Files...........................................84
   SECTION 3.15.           Servicing Compensation....................................................................85
   SECTION 3.16.           Collection Account Statements.............................................................85
   SECTION 3.17.           Statement as to Compliance................................................................86
   SECTION 3.18.           Independent Public Accountants' Servicing Report..........................................86
   SECTION 3.19.           Annual Certification......................................................................86
   SECTION 3.20.           Access to Certain Documentation...........................................................87
   SECTION 3.21.           Title, Management and Disposition of REO Property.........................................87
   SECTION 3.22.           Obligations of the Servicer in Respect of Prepayment Interest Shortfalls; Relief Act
                           Interest Shortfalls.......................................................................90
   SECTION 3.23.           Obligations of the Servicer in Respect of Mortgage Rates and  Monthly Payments............91
   SECTION 3.24.           Reserve Fund..............................................................................91
   SECTION 3.25.           Advance Facility..........................................................................92
   SECTION 3.26.           The Servicer Indemnification..............................................................95

ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS BY THE MASTER SERVICER..........................96

   SECTION 4.01.           Master Servicer...........................................................................96
   SECTION 4.02.           REMIC-Related Covenants...................................................................97
   SECTION 4.03.           Monitoring of Servicer....................................................................97
   SECTION 4.04.           Fidelity Bond.............................................................................98
   SECTION 4.05.           Power to Act; Procedures..................................................................98
   SECTION 4.06.           Due-on-Sale Clauses; Assumption Agreements................................................99
   SECTION 4.07.           Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee.....100
   SECTION 4.08.           Standard Hazard Insurance and Flood Insurance Policies...................................100
   SECTION 4.09.           Presentment of Claims and Collection of Proceeds.........................................100
   SECTION 4.10.           Maintenance of Primary Mortgage Insurance Policies.......................................101
   SECTION 4.11.           Trustee to Retain Possession of Certain Insurance Policies and Documents.................101
   SECTION 4.12.           Realization Upon Defaulted Mortgage Loans................................................101
   SECTION 4.13.           Compensation for the Master Servicer.....................................................102
   SECTION 4.14.           REO Property.............................................................................102
   SECTION 4.15.           Annual Officer's Certificate as to Compliance............................................102
   SECTION 4.16.           Annual Independent Accountant's Servicing Report.........................................103

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   SECTION 4.17.           UCC......................................................................................103
   SECTION 4.18.           Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls...........104

ARTICLE V PAYMENTS TO CERTIFICATEHOLDERS............................................................................105

   SECTION 5.01.           Distributions............................................................................105
   SECTION 5.02.           Statements to Certificateholders.........................................................117
   SECTION 5.03.           Servicer Reports; P&I Advances...........................................................120
   SECTION 5.04.           Allocation of Realized Losses............................................................122
   SECTION 5.05.           Compliance with Withholding Requirements.................................................125
   SECTION 5.06.           Reports Filed with Securities and Exchange Commission....................................125

ARTICLE VI THE CERTIFICATES.........................................................................................127

   SECTION 6.01.           The Certificates.........................................................................127
   SECTION 6.02.           Registration of Transfer and Exchange of Certificates....................................129
   SECTION 6.03.           Mutilated, Destroyed, Lost or Stolen Certificates........................................134
   SECTION 6.04.           Persons Deemed Owners....................................................................135
   SECTION 6.05.           Certain Available Information............................................................135

ARTICLE VII THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER.....................................................136

   SECTION 7.01.           Liability of the Depositor, the Servicer and the Master Servicer.........................136
   SECTION 7.02.           Merger or Consolidation of the Depositor, the Servicer or the Master Servicer............136
   SECTION 7.03.           Limitation on Liability of the Depositor, the Servicer, the Master Servicer and Others...136
   SECTION 7.04.           Limitation on Resignation of the Servicer................................................137
   SECTION 7.05.           Limitation on Resignation of the Master Servicer.........................................138
   SECTION 7.06.           Assignment of Master Servicing...........................................................138
   SECTION 7.07.           Rights of the Depositor in Respect of the Servicer and the Master Servicer...............139

ARTICLE VIII DEFAULT................................................................................................141

   SECTION 8.01.           Servicer Events of Default...............................................................141
   SECTION 8.02.           Master Servicer to Act; Appointment of Successor.........................................144
   SECTION 8.03.           Notification to Certificateholders.......................................................147
   SECTION 8.04.           Waiver of Servicer Events of Default.....................................................147

ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR..................................................148

   SECTION 9.01.           Duties of Trustee and Securities Administrator...........................................148
   SECTION 9.02.           Certain Matters Affecting Trustee and Securities Administrator...........................149
   SECTION 9.03.           Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans.......151
   SECTION 9.04.           Trustee and Securities Administrator May Own Certificates................................151
   SECTION 9.05.           Fees and Expenses of Trustee and Securities Administrator................................151

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   SECTION 9.06.           Eligibility Requirements for Trustee and Securities Administrator........................152
   SECTION 9.07.           Resignation and Removal of Trustee and Securities Administrator..........................153
   SECTION 9.08.           Successor Trustee or Securities Administrator............................................154
   SECTION 9.09.           Merger or Consolidation of Trustee or Securities Administrator...........................154
   SECTION 9.10.           Appointment of Co-Trustee or Separate Trustee............................................155
   SECTION 9.11.           Appointment of Office or Agency..........................................................155
   SECTION 9.12.           Representations and Warranties...........................................................156

ARTICLE X TERMINATION...............................................................................................157

   SECTION 10.01.          Termination Upon Repurchase or Liquidation of All Mortgage Loans.........................157
   SECTION 10.02.          Additional Termination Requirements......................................................159

ARTICLE XI REMIC PROVISIONS.........................................................................................160

   SECTION 11.01.          REMIC Administration.....................................................................160
   SECTION 11.02.          Prohibited Transactions and Activities...................................................162
   SECTION 11.03.          Indemnification..........................................................................163

ARTICLE XII MISCELLANEOUS PROVISIONS................................................................................164

   SECTION 12.01.          Amendment................................................................................164
   SECTION 12.02.          Recordation of Agreement; Counterparts...................................................165
   SECTION 12.03.          Limitation on Rights of Certificateholders...............................................165
   SECTION 12.04.          Governing Law............................................................................166
   SECTION 12.05.          Notices..................................................................................166
   SECTION 12.06.          Severability of Provisions...............................................................167
   SECTION 12.07.          Notice to Rating Agencies................................................................167
   SECTION 12.08.          Article and Section References...........................................................168
   SECTION 12.09.          Grant of Security Interest...............................................................168
   SECTION 12.10.          Survival of Indemnification..............................................................169
   SECTION 12.11.          Servicing Agreements.....................................................................169
</TABLE>

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Exhibits
--------

Exhibit A-1       Form of Class A Certificate
Exhibit A-2       Form of Class M Certificate
Exhibit A-3       Form of Class B Certificate
Exhibit A-4       Form of Class CE Certificate
Exhibit A-5       Form of Class P Certificate
Exhibit A-6       Form of Class R Certificate
Exhibit B-1       Form of Transferor Representation Letter and Form of
                  Transferee Representation Letter in Connection with Transfer
                  of the Class B Certificates, Class P Certificates, Class CE
                  Certificates and Residual Certificates Pursuant to Rule 144A
                  Under the 1933 Act
Exhibit B-2       Form of Transferor Representation Letter and Form of
                  Transferee Representation Letter in Connection with Transfer
                  of the Class B Certificates, Class P Certificates, Class CE
                  Certificates and Residual Certificates Pursuant to Rule 501
                  (a) Under the 1933 Act
Exhibit B-3       Form of Transfer Affidavit and Agreement and Form of
                  Transferor Affidavit in Connection with Transfer of Residual
                  Certificates
Exhibit C         Form of Servicer Certification
Exhibit D         Form of Power of Attorney
Schedule 1        Mortgage Loan Schedule
Schedule 2        Prepayment Charge Schedule
Schedule 3        Reserved.
Schedule 4        Standard File Layout - Delinquency Reporting
Schedule 5        Standard File Layout - Scheduled/Scheduled

                                       xi
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                  This Pooling and Servicing Agreement, is dated and effective
as of December 1, 2004, among ACE SECURITIES CORP., as Depositor, LITTON LOAN
SERVICING LP, as a Servicer, WELLS FARGO BANK, N.A., as Master Servicer and
Securities Administrator and HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee.

                             PRELIMINARY STATEMENT:

                  The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which in the aggregate will evidence the
entire beneficial ownership interest of the Trust Fund created hereunder. The
Trust Fund will consist of a segregated pool of assets comprised of the Mortgage
Loans and certain other related assets subject to this Agreement.

                                     REMIC I
                                     -------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (other than the Reserve Fund) as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC I". The Class R-I Interest will be the sole class of
"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein). The following table irrevocably sets forth the designation, the REMIC I
Remittance Rate, the initial Uncertificated 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 (as defined herein).
None of the REMIC I Regular Interests will be certificated.

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                REMIC I         INITIAL
              REMITTANCE    UNCERTIFICATED     LATEST POSSIBLE
DESIGNATION      RATE           BALANCE       MATURITY DATE (1)
-----------   -----------   ---------------   -----------------
I-LTAA        Variable(2)   $676,469,411 50   January 25, 2035
I-LTA         Variable(2)   $  5,408,300 00   January 25, 2035
I-LTM1        Variable(2)   $    241,600 00   January 25, 2035
I-LTM2        Variable(2)   $    231,240 00   January 25, 2035
I-LTM3        Variable(2)   $    131,150 00   January 25, 2035
I-LTM4        Variable(2)   $    117,350 00   January 25, 2035
I-LTM5        Variable(2)   $    113,900 00   January 25, 2035
I-LTM6        Variable(2)   $    103,540 00   January 25, 2035
I-LTM7        Variable(2)   $     96,640 00   January 25, 2035
I-LTB1        Variable(2)   $     79,380 00   January 25, 2035
I-LTB2        Variable(2)   $     69,030 00   January 25, 2035
I-LTB3        Variable(2)   $     69,030 00   January 25, 2035
I-LTB4        Variable(2)   $     62,120 00   January 25, 2035
I-LTB5        Variable(2)   $    113,900 00   January 25, 2035
I-LTZZ        Variable(2)   $  6,968,318 19   January 25, 2035
I-LTP         Variable(2)   $        100 00   January 25, 2035

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

                                    REMIC II
                                    --------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Interest will evidence the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial aggregate Certificate Principal Balance and, solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated Classes of Certificates.

                                       2

<PAGE>

                                       INITIAL AGGREGATE
                                      CERTIFICATE PRINCIPAL     LATEST POSSIBLE
DESIGNATION     PASS-THROUGH RATE           BALANCE            MATURITY DATE (1)
-----------     -----------------     ---------------------    -----------------
Class A            Variable(2)        $        540,830,000     January 25, 2035
Class M-1          Variable(2)        $         24,160,000     January 25, 2035
Class M-2          Variable(2)        $         23,124,000     January 25, 2035
Class M-3          Variable(2)        $         13,115,000     January 25, 2035
Class M-4          Variable(2)        $         11,735,000     January 25, 2035
Class M-5          Variable(2)        $         11,390,000     January 25, 2035
Class M-6          Variable(2)        $         10,354,000     January 25, 2035
Class M-7          Variable(2)        $          9,664,000     January 25, 2035
Class B-1          Variable(2)        $          7,938,000     January 25, 2035
Class B-2          Variable(2)        $          6,903,000     January 25, 2035
Class B-3          Variable(2)        $          6,903,000     January 25, 2035
Class B-4          Variable(2)        $          6,212,000     January 25, 2035
Class B-5          Variable(2)        $         11,390,000     January 25, 2035
Class P              N/A(3)           $                100     January 25, 2035
Class CE             N/A(4)           $          6,556,910     January 25, 2035

------------
(1)      For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates.
(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein. (3) The Class P Certificates will not accrue interest.
(4)      The Class CE Certificates will accrue interest at their variable
         Pass-Through Rate on the Notional Amount of the Class CE Certificates
         outstanding from time to time which shall equal the Uncertificated
         Balance of the REMIC I Regular Interests (other than REMIC I Regular
         Interest I-LTP). The Class CE Certificates will not accrue interest on
         their Certificate Principal Balance.

                  As of the Cut-off Date, the Mortgage Loans had an aggregate
Scheduled Principal Balance equal to approximately $690,275,010.

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

                                       3
<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01. Defined Terms.

                  Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.

                  "Accepted Master Servicing Practices": With respect to any
Mortgage Loan, as applicable, either (x) those customary mortgage master
servicing practices of prudent mortgage servicing institutions that master
service mortgage loans of the same type and quality as such Mortgage 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 the
Servicer), or (y) as provided in Section 3.01 hereof, but in no event below the
standard set forth in clause (x).

                  "Accepted Servicing Practices": As defined in Section 3.01.

                  "Account": The Collection Account and the Distribution Account
as the context may require.

                  "Accrued Certificate Interest": With respect to any Class A
Certificate, Mezzanine Certificate, Class B Certificate or Class CE Certificate
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates, or on the Notional
Amount in the case of the Class CE Certificates, of such Certificate immediately
prior to such Distribution Date. The Class P Certificates are not entitled to
distributions in respect of interest and, accordingly, will not accrue interest.
All distributions of interest on the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates will be calculated on the basis of a
360-day year and the actual number of days in the applicable Interest Accrual
Period. All distributions of interest on the Class CE Certificates will be based
on a 360-day year consisting of twelve 30-day months. Accrued Certificate
Interest with respect to each Distribution Date, as to any Class A Certificate,
Mezzanine Certificate, Class B Certificate or Class CE Certificate shall be
reduced by an amount equal to the portion allocable to such Certificate pursuant
to Section 1.02 hereof, if any, of the sum of (a) the aggregate Prepayment
Interest Shortfall, if any, for such Distribution Date to the extent not covered
by payments pursuant to Section 3.22 or Section 4.18 of this Agreement or
pursuant to the Servicing Agreement and (b) the aggregate amount of any Relief
Act Interest Shortfall, if any, for such Distribution Date. In addition, Accrued
Certificate Interest with respect to each Distribution Date, as to any Class CE
Certificate, shall be reduced by an amount equal to the portion allocable to
such Class CE Certificate of Realized Losses, if any, pursuant to Section 1.02
and Section 5.04 hereof.

                  "Adjustable Rate Mortgage Loan": Each of the Mortgage Loans
identified in the Mortgage Loan Schedule as having a Mortgage Rate that is
subject to adjustment.

                                       4
<PAGE>

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

                  "Administration Fees": The sum of (i) the Servicing Fee and
(ii) the Master Servicing Fee.

                  "Administration Fee Rate": The sum of (i) the Servicing Fee
Rate and (ii) the Master Servicer Fee Rate.

                  "Advance Facility": As defined in Section 3.25(a).

                  "Advance Facility Notice": As defined in Section 3.25(b).

                  "Advance Financing Person": As defined in Section 3.25(a).

                  "Advance Reimbursement Amounts": As defined in Section
3.25(b).

                  "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.

                  "Aggregate Loss Severity Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of Realized Losses incurred on any Mortgage Loans
from the Cut-off Date to the last day of the preceding calendar month and the
denominator of which is the aggregate principal balance of such Mortgage Loans
immediately prior to the liquidation of such Mortgage Loans.

                  "Agreement": This Pooling and Servicing Agreement, including
all exhibits and schedules hereto and all amendments hereof and supplements
hereto.

                  "Allocated Realized Loss Amount": With respect to any Class of
Mezzanine Certificates or Class B Certificates and any Distribution Date, an
amount equal to the sum of any Realized Loss allocated to that Class of
Certificates on the Distribution Date and any Allocated Realized Loss Amount for
that Class remaining unpaid from the previous Distribution Date.

                  "Amounts Held for Future Distribution": As to any Distribution
Date, the aggregate amount held in the Custodial Accounts and the Collection
Account at the close of business on the immediately preceding Determination Date
on account of (i) all Monthly Payments or portions thereof received in respect
of the Mortgage Loans due after the related Due Period and (ii) Principal
Prepayments and Liquidation Proceeds received in respect of such Mortgage Loans
after the last day of the related Prepayment Period.

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the

                                       5
<PAGE>

related Mortgaged Property is located to reflect of record the sale of the
Mortgage, which assignment, notice of transfer or equivalent instrument may be
in the form of one or more blanket assignments covering Mortgages secured by
Mortgaged Properties located in the same county, if permitted by law.

                  "Assignment Agreement": The Assignment, Assumption and
Recognition Agreement, dated as of December 29, 2004, by and among the Seller,
the Depositor, RMC and RMAE evidencing the assignment of the Servicing Agreement
to the Depositor.

                  "Authorized Officers": A managing director of the whole loan
trading desk and a managing director in global markets.

                  "Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Custodial Accounts, Collection Account and
Distribution Account as of the close of business on the Servicer Remittance
Date, (b) the aggregate of any amounts deposited in the Distribution Account by
the Servicer or the Master Servicer in respect of Prepayment Interest Shortfalls
for such Distribution Date pursuant to Section 3.22 or Section 4.18 of this
Agreement or by RMC or RMAE pursuant to the Servicing Agreement, (c) the
aggregate of any P&I Advances for such Distribution Date made by the Servicer
pursuant to Section 5.03 of this Agreement or by RMC or RMAE pursuant to the
Servicing Agreement and (d) the aggregate of any P&I Advances made by a
successor Servicer (including the Master Servicer) for such Distribution Date
pursuant to Section 8.02 of this Agreement or pursuant to the Servicing
Agreement, reduced (to not less than zero) by (2) the portion of the amount
described in clause (1)(a) above that represents (i) Amounts Held for Future
Distribution, (ii) Principal Prepayments on the Mortgage Loans received after
the related Prepayment Period (together with any interest payments received with
such Principal Prepayments to the extent they represent the payment of interest
accrued on the Mortgage Loans during a period subsequent to the related
Prepayment Period), (iii) Liquidation Proceeds and Insurance Proceeds received
in respect of the Mortgage Loans after the related Prepayment Period, (iv)
amounts reimbursable or payable to the Depositor, a Servicer, the Trustee, the
Master Servicer, the Securities Administrator or the Custodian pursuant to
Section 3.09 or 9.05 of this Agreement or otherwise payable in respect of
Extraordinary Trust Fund Expenses or reimbursable or payable to RMC or RMAE
under the Servicing Agreement, (v) amounts deposited in the Custodial Account,
the Collection Account or the Distribution Account in error, (vi) the amount of
any Prepayment Charges collected by the Servicer, RMC or RMAE in connection with
the Principal Prepayment of any of the Mortgage Loans and (vii) amounts
reimbursable to a successor Servicer (including the Master Servicer) pursuant to
Section 8.02 of this Agreement or pursuant to the Servicing Agreement.

                  "Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment, that is substantially greater than the preceding monthly payment at the
maturity of such Mortgage Loan.

                  "Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment, that is substantially greater
than the preceding Monthly Payment at the maturity of such Mortgage Loan.

                  "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.

                                       6
<PAGE>

                  "Book-Entry Certificates": The Offered Certificates for so
long as the Certificates of such Class shall be registered in the name of the
Depository or its nominee.

                  "Book-Entry Custodian": The custodian appointed pursuant to
Section 6.01.

                  "Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the States of New York,
Florida, Maryland, Texas, Minnesota or in the city in which the Corporate Trust
Office of the Trustee is located, are authorized or obligated by law or
executive order to be closed.

                  "Cap Contract": Shall mean the Cap Contract between the
Trustee and the counterparty named thereunder, for the benefit of the Holders of
the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates.

                  "Cash-Out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than a nominal amount in excess of the principal
balance of any existing first mortgage plus any subordinate mortgage on the
related Mortgaged Property and related closing costs.

                  "Certificate": Any one of ACE Securities Corp., Asset Backed
Pass-Through Certificates, Series 2004-RM2, Class A, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5, Class P, Class CE and Class R issued under this
Agreement.

                  "Certificate Factor": With respect to any Class of
Certificates (other than the Residual Certificates) as of any Distribution Date,
a fraction, expressed as a decimal carried to six places, the numerator of which
is the aggregate Certificate Principal Balance (or Notional Amount, in the case
of the Class CE Certificates) of such Class of Certificates on such Distribution
Date (after giving effect to any distributions of principal and allocations of
Realized Losses resulting in reduction of the Certificate Principal Balance (or
Notional Amount, in the case of the Class CE Certificates) of such Class of
Certificates to be made on such Distribution Date), and the denominator of which
is the initial aggregate Certificate Principal Balance (or Notional Amount, in
the case of the Class CE Certificates) of such Class of Certificates as of the
Closing Date.

                  "Certificate Margin": With respect to the Class A Certificates
and, for purposes of the definition of "Marker Rate", REMIC I Regular Interest
I-LTA 0.310% in the case of each Distribution Date through and including the
Optional Termination Date and 0.620% in the case of each Distribution Date
thereafter.

                  With respect to the Class M-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM1, 0.500% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.750% in the case of each Distribution Date thereafter.

                  With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM2, 0.530% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.795% in the case of each Distribution Date thereafter.

                                       7
<PAGE>

                  With respect to the Class M-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM3, 0.580% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.870% in the case of each Distribution Date thereafter.

                  With respect to the Class M-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM4, 0.880% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.320% in the case of each Distribution Date thereafter.

                  With respect to the Class M-5 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM5, 0.930% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.395% in the case of each Distribution Date thereafter.

                  With respect to the Class M-6 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM6, 1.070% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.605% in the case of each Distribution Date thereafter.

                  With respect to the Class M-7 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM7, 1.500% in
the case of each Distribution Date through and including the Optional
Termination Date and 2.250% in the case of each Distribution Date thereafter.

                  With respect to the Class B-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB1, 1.700% in
the case of each Distribution Date through and including the Optional
Termination Date and 2.550% in the case of each Distribution Date thereafter.

                  With respect to the Class B-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB2, 2.800% in
the case of each Distribution Date through and including the Optional
Termination Date and 4.200% in the case of each Distribution Date thereafter.

                  With respect to the Class B-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB3, 3.250% in
the case of each Distribution Date through and including the Optional
Termination Date and 4.875% in the case of each Distribution Date thereafter.

                  With respect to the Class B-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB4, 3.250% in
the case of each Distribution Date through and including the Optional
Termination Date and 4.875% in the case of each Distribution Date thereafter.

                  With respect to the Class B-5 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB5, 3.250% in
the case of each Distribution Date through and including the Optional
Termination Date and 4.875% in the case of each Distribution Date thereafter.

                                       8
<PAGE>

                  "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof, and solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of or beneficially owned by the Depositor, the Seller, the Servicer, the
Master Servicer, the Securities Administrator, the Trustee or any Affiliate
thereof shall be deemed not to be outstanding and the Voting Rights to which it
is entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent has been
obtained, except as otherwise provided in Section 12.01. The Trustee and the
Securities Administrator may conclusively rely upon a certificate of the
Depositor, the Seller, the Master Servicer, the Securities Administrator or the
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 and 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.

                  "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 participating brokerage firm for which a Depository
Participant acts as agent.

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate, Class B Certificate or Class P Certificate
as of any date of determination, the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior to such date of
determination plus any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 5.04, minus all distributions
allocable to principal made thereon and Realized Losses allocated thereto, if
any, on such immediately prior Distribution Date (or, in the case of any date of
determination up to and including the first Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof). With respect to each Class CE Certificate as of any date of
determination, an amount equal to the Percentage Interest evidenced by such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Balances of the REMIC I Regular Interests over (B) the then aggregate
Certificate Principal Balances of the Class A Certificates, the Mezzanine
Certificates, the Class B Certificates and the Class P Certificates then
outstanding. The aggregate initial Certificate Principal Balance of each Class
of Regular Certificates is set forth in the Preliminary Statement hereto.

                  "Certificate Register": The register maintained pursuant to
Section 6.02.

                  "Class": Collectively, all of the Certificates bearing the
same class designation.

                  "Class A Certificate": Any one of the Class A Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-1 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                                       9
<PAGE>

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the Certificate Principal Balance of the Class
A Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 56.70% and (ii) the aggregate Stated Principal Balance
of the Mortgage Loans 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 (B) the aggregate Stated
Principal Balance of the Mortgage Loans 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) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

                  "Class A Principal Loss Amount": With respect to any
Distribution Date, the amount by which (i) the aggregate Certificate Principal
Balance of the Class A Certificates, after taking into account distributions in
reduction of such aggregate Certificate Principal Balance on such Distribution
Date, exceeds (ii) the aggregate Stated Principal Balance of the Mortgage Loans
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).

                  "Class B Certificates": The Class B-1, Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates.

                  "Class B-1 Certificate": Any one of the Class B-1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class B-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates (after taking into account the payment of
the Class M-6 Principal Distribution Amount on such Distribution Date), (viii)
the Certificate Principal Balance of the Class M-7 Certificates (after taking
into account the payment of the Class M-7 Principal Distribution Amount on such
Distribution Date), and (ix) the Certificate Principal Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (y) the lesser of

                                       10
<PAGE>

(A) the product of (i) 89.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans 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 (B) the aggregate Stated
Principal Balance of the Mortgage Loans 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) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

                  "Class B-2 Certificate": Any one of the Class B-2 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class B-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates (after taking into account the payment of
the Class M-6 Principal Distribution Amount on such Distribution Date), (viii)
the Certificate Principal Balance of the Class M-7 Certificates (after taking
into account the payment of the Class M-7 Principal Distribution Amount on such
Distribution Date), (ix) the Certificate Principal Balance of the Class B-1
Certificates (after taking into account the payment of the Class B-1 Principal
Distribution Amount on such Distribution Date), and (x) the Certificate
Principal Balance of the Class B-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 91.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans 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 (B) the aggregate Stated Principal Balance of the Mortgage Loans 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) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Class B-3 Certificate": Any one of the Class B-3 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the

                                       11
<PAGE>

form annexed hereto as Exhibit A-3 and evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.

                  "Class B-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates (after taking into account the payment of
the Class M-6 Principal Distribution Amount on such Distribution Date), (viii)
the Certificate Principal Balance of the Class M-7 Certificates (after taking
into account the payment of the Class M-7 Principal Distribution Amount on such
Distribution Date), (ix) the Certificate Principal Balance of the Class B-1
Certificates (after taking into account the payment of the Class B-1 Principal
Distribution Amount on such Distribution Date), (x) the Certificate Principal
Balance of the Class B-2 Certificates (after taking into account the payment of
the Class B-2 Principal Distribution Amount on such Distribution Date), and (xi)
the Certificate Principal Balance of the Class B-3 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
93.00% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans 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 (B) the aggregate Stated Principal Balance of the
Mortgage Loans 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) minus the product of (i) 0.50% and (ii)
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Class B-4 Certificate": Any one of the Class B-4 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class B-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the

                                       12
<PAGE>

Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the Certificate Principal Balance of the Class M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class B-1 Certificates (after taking into account the payment of
the Class B-1 Principal Distribution Amount on such Distribution Date), (x) the
Certificate Principal Balance of the Class B-2 Certificates (after taking into
account the payment of the Class B-2 Principal Distribution Amount on such
Distribution Date), (xi) the Certificate Principal Balance of the Class B-3
Certificates (after taking into account the payment of the Class B-3 Principal
Distribution Amount on such Distribution Date) and (xii) the Certificate
Principal Balance of the Class B-4 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 94.80% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans 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 (B) the aggregate Stated Principal Balance of the Mortgage Loans 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) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Class B-5 Certificate": Any one of the Class B-5 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class B-5 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates (after taking into account the payment of
the Class M-6 Principal

                                       13
<PAGE>

Distribution Amount on such Distribution Date), (viii) the Certificate Principal
Balance of the Class M-7 Certificates (after taking into account the payment of
the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the
Certificate Principal Balance of the Class B-1 Certificates (after taking into
account the payment of the Class B-1 Principal Distribution Amount on such
Distribution Date), (x) the Certificate Principal Balance of the Class B-2
Certificates (after taking into account the payment of the Class B-2 Principal
Distribution Amount on such Distribution Date), (xi) the Certificate Principal
Balance of the Class B-3 Certificates (after taking into account the payment of
the Class B-3 Principal Distribution Amount on such Distribution Date), (xii)
the Certificate Principal Balance of the Class B-4 Certificates (after taking
into account the payment of the Class B-4 Principal Distribution Amount on such
Distribution Date) (xiii) the Certificate Principal Balance of the Class B-5
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 98.10% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans 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 (B) the aggregate Stated
Principal Balance of the Mortgage Loans 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) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

                  "Class CE Certificate": Any one of the Class CE Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-4 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M Certificates": The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, and Class M-7 Certificates.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date) and (ii)
the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
63.70% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans 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 (B) the aggregate Stated Principal Balance of the
Mortgage Loans 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

                                       14
<PAGE>

principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

                  "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 70.40% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans 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 (B) the aggregate Stated
Principal Balance of the Mortgage Loans 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) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

                  "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 74.20% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans 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 (B) the aggregate Stated Principal Balance of the Mortgage Loans 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) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

                                       15
<PAGE>

                  "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date) and (v)
the Certificate Principal Balance of the Class M-4 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
77.60% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans 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 (B) the aggregate Stated Principal Balance of the
Mortgage Loans 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) minus the product of (i) 0.50% and (ii)
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Class M-5 Certificate": Any one of the Class M-5 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-5 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date) and (vi) the Certificate Principal Balance of the Class M-5
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 80.90% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans 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 (B) the

                                       16
<PAGE>

aggregate Stated Principal Balance of the Mortgage Loans 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) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

                  "Class M-6 Certificate": Any one of the Class M-6 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-6 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (vii) the Certificate
Principal Balance of the Class M-6 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 83.90% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans 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 (B) the aggregate Stated Principal Balance of the Mortgage Loans 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) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Class M-7 Certificate": Any one of the Class M-7 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-7 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment

                                       17
<PAGE>

of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv)
the Certificate Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date) and (viii) the Certificate Principal Balance of the Class M-7
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 86.70% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans 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 (B) the aggregate Stated
Principal Balance of the Mortgage Loans 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) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

                  "Class P Certificate": Any one of the Class P Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-5 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class R Certificates": Any one of the Class R Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-6, and evidencing
the Class R-I Interest and the Class R-II Interest.

                  "Class R-I Interest": The uncertificated residual interest in
REMIC I.

                  "Class R-II Interest": The uncertificated residual interest in
REMIC II.

                  "Closing Date": December 29, 2004.

                  "Code": The Internal Revenue Code of 1986 as amended from time
to time.

                  "Collection Account": The account or accounts created and
maintained, or caused to be created and maintained, by the Servicer pursuant to
Section 3.08(a) of this Agreement, which shall be entitled "Litton Loan
Servicing LP, as Servicer for HSBC Bank USA, National Association as Trustee, in
trust for the registered holders of ACE Securities Corp., Home Equity Loan
Trust, Series 2004-RM2, Asset Backed Pass-Through Certificates". The Collection
Account maintained by the Servicer must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee which office at the date of the execution of this instrument is
located at 452 Fifth Avenue, New

                                       18
<PAGE>

York, New York 10018, Attention: ACE Securities Corp., 2004-RM2, or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator and the Servicer. The office of the Securities Administrator,
which for purposes of Certificate transfers and surrender is located at Wells
Fargo Bank, N.A., Sixth Street and Marquette Avenue, Minneapolis, Minnesota
55479, Attention: Corporate Trust (ACE 2004-RM2), and for all other purposes is
located at Wells Fargo Bank, N.A., P.O. Box 98, Columbia, Maryland 21046,
Attention: Corporate Trust (ACE 2004-RM2) (or for overnight deliveries, at 9062
Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust (ACE
2004-RM2)).

                  "Corresponding Certificate": With respect to each REMIC I
Regular Interest, as follows:

                     REMIC I Regular Interest              Class
                     ------------------------              -----
                  REMIC I Regular Interest I-LTA              A
                  REMIC I Regular Interest I-LTM1            M-1
                  REMIC I Regular Interest I-LTM2            M-2
                  REMIC I Regular Interest I-LTM3            M-3
                  REMIC I Regular Interest I-LTM4            M-4
                  REMIC I Regular Interest I-LTM5            M-5
                  REMIC I Regular Interest I-LTM6            M-6
                  REMIC I Regular Interest I-LTM7            M-7
                  REMIC I Regular Interest I-LTB1            B-1
                  REMIC I Regular Interest I-LTB2            B-2
                  REMIC I Regular Interest I-LTB3            B-3
                  REMIC I Regular Interest I-LTB4            B-4
                  REMIC I Regular Interest I-LTB5            B-5
                  REMIC I Regular Interest I-LTP              P

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates, the
Class B Certificates and the Class CE Certificates, and the denominator of which
is the aggregate Stated Principal Balance of the Mortgage Loans, calculated
after taking into account distributions of principal on the Mortgage Loans and
distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date.

                   "Custodial Account": Shall mean the account or accounts
maintained by RMC or RMAE under the Servicing Agreement.

                  "Custodial Agreement": The Custodial Agreement dated as of
December 1, 2004, among the Trustee, the Custodian and the Servicer 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
Mortgage Loan subject to this Agreement.

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

                  "Cut-off Date": With respect to each Mortgage Loan, December
1, 2004. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.

                                       19
<PAGE>

                  "Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.

                  "Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.

                  "Definitive Certificates": As defined in Section 6.01(b).

                  "Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.

                  "Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of all Mortgage 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 Stated
Principal Balance of the Mortgage Loans and REO Properties as of the last day of
the previous calendar month.

                  "Depositor": ACE Securities Corp., 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" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.

                  "Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least A-1+ by S&P, F-1+
by Fitch and P-1 by Moody's (or, if such Rating Agencies are no longer rating
the Offered Certificates, comparable ratings by any other nationally recognized
statistical rating agency then rating the Offered Certificates).

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

                  "Determination Date": With respect to the Servicer and each
Distribution Date, the 10th day of the calendar month in which such Distribution
Date occurs, or if such 10th day is

                                       20
<PAGE>

not a Business Day, the Business Day immediately preceding such 10th day. With
respect to RMC and RMAE, the date specified in the Servicing Agreement.

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the Servicer, on
behalf of the Trustee, shall not be considered to Directly Operate an REO
Property solely because the Servicer establishes rental terms, chooses tenants,
enters into or renews leases, deals with taxes and insurance, or makes decisions
as to repairs or capital expenditures with respect to such REO Property.

                  "Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Freddie Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause any Trust REMIC or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Residual Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.

                  "Distribution Account": The trust account or accounts created
and maintained by the Securities Administrator pursuant to Section 3.08(b) in
the name of the Securities Administrator for the benefit of the
Certificateholders and designated "Wells Fargo Bank, N.A., in trust for
registered holders of ACE Securities Corp. Home Equity Loan Trust, Series
2004-RM2". Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement. The
Distribution Account must be an Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in January 2005.

                  "Due Date": With respect to each Distribution Date, the day of
the month on which the Monthly Payment is due on a Mortgage Loan during the
related Due Period, exclusive of any days of grace.

                                       21
<PAGE>

                  "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 of (i) an account or accounts
maintained with a Depository Institution, (ii) an account or accounts the
deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with a federal depository institution or state chartered
depository institution acting in its fiduciary capacity. Eligible Accounts may
bear interest.

                  "ERISA": The Employee Retirement Income Security Act of 1974,
as amended from time to time.

                  "Estate in Real Property": A fee simple estate in a parcel of
land.

                  "Excess Cap Payment": With respect to any Distribution Date,
the excess, if any, of (1) the cap payments made by the counterparty under the
Cap Contract with respect to the Class A, Class M and Class B Certificates, over
(2) the amount of the Net WAC Rate Carryover Amounts attributable to the Class
A, Class M and Class B Certificates for such Distribution Date.

                  "Excess Liquidation Proceeds": To the extent that such amount
is not required by law to be paid to the related mortgagor, the amount, if any,
by which Liquidation Proceeds with respect to a liquidated Mortgage Loan exceed
the sum of (i) the outstanding principal balance of such Mortgage Loan and
accrued but unpaid interest at the related Net Mortgage Rate through the last
day of the month in which the related Liquidation Event occurs, plus (ii)
related liquidation expenses or other amounts to which the Servicer, RMC or RMAE
is entitled to be reimbursed from Liquidation Proceeds with respect to such
liquidated Mortgage Loan pursuant to Section 3.09 of this Agreement or pursuant
to the Servicing Agreement.

                  "Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan or REO Property, the then applicable Mortgage Rate thereon minus the
Administration Fee Rate.

                  "Extraordinary Trust Fund Expense": Any amounts payable or
reimbursable to the Trustee, the Master Servicer, the Securities Administrator,
the Custodian or any director, officer, employee or agent of any such Person
from the Trust Fund pursuant to the terms of this Agreement and any amounts
payable from the Distribution Account in respect of taxes pursuant to Section
11.01(g)(v).

                  "Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (i) the Net Monthly Excess Cashflow for such
Distribution Date and (ii) the 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 Maturity Date": The Distribution Date occurring in
January 2035.

                                       22
<PAGE>

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by an Originator, the Seller or the Master Servicer pursuant to or as
contemplated by Section 2.03, 3.13(c) or Section 10.01), a determination made by
the Servicer, RMC or RMAE that all Insurance Proceeds, Liquidation Proceeds and
other payments or recoveries which the Servicer, RMC or RMAE, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered, which determination shall be evidenced by a certificate of a
Servicing Officer delivered to the Master Servicer and maintained in its
records.

                  "Freddie Mac": Freddie Mac, formerly known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.

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

                    "Independent": When used with respect to any specified
Person, any such Person who (a) is in fact independent of the Depositor, the
Master Servicer, the Securities Administrator, the Servicer, the Seller, any
Originator and their respective Affiliates, (b) does not have any direct
financial interest in or any material indirect financial interest in the
Depositor, the Master Servicer, the Securities Administrator, the Servicer, the
Seller, any Originator or any Affiliate thereof, and (c) is not connected with
the Depositor, the Master Servicer, the Securities Administrator, the Servicer,
the Seller, any Originator or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, the Master Servicer, the Securities Administrator, the Servicer,
the Seller, any Originator or any Affiliate thereof merely because such Person
is the beneficial owner of 1% or less of any class of securities issued by the
Depositor, the Master Servicer, the Securities Administrator, the Servicer, the
Seller, any Originator or any Affiliate thereof, as the case may be.

                  "Independent Contractor": Either (i) any Person (other than
the Servicer) that would be an "independent contractor" with respect to REMIC I
within the meaning of Section 856(d)(3) of the Code if REMIC I were a real
estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including the Servicer) if the Trustee has received an Opinion of Counsel to
the effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.

                                       23
<PAGE>

                  "Index": As of any Adjustment Date, the index applicable to
the determination of the Mortgage Rate on each Adjustable Rate Mortgage Loan
will generally be 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 (a) as of the first
Business Day 45 days prior to such Adjustment Date or (b) as of the first
Business Day of the month preceding the month of such Adjustment Date, as
specified in the related Mortgage Note.

                  "Institutional Accredited Investor": As defined in Section
6.01(c).

                  "Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy, covering a Mortgage Loan or the related
Mortgaged Property, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor or a
senior lienholder in accordance with Accepted Servicing Practices, subject to
the terms and conditions of the related Mortgage Note and Mortgage.

                   "Interest Accrual Period": With respect to any Distribution
Date and the Class A Certificates, the Mezzanine Certificate and the Class B
Certificates, the period commencing on the Distribution Date of the month
immediately preceding the month in which such Distribution Date occurs (or, in
the case of the first Distribution Date, commencing on the Closing Date) and
ending on the day preceding such Distribution Date. With respect to any
Distribution Date and the Class CE Certificates and the REMIC I Regular
Interests, the one-month period ending on the last day of the calendar month
immediately preceding the month in which such Distribution Date occurs.

                  "Interest Carry Forward Amount": With respect to any
Distribution Date and any Class A Certificate, Mezzanine Certificate or Class B
Certificate, the sum of (i) the amount, if any, by which (a) the Interest
Distribution Amount for such Class as of the immediately preceding Distribution
Date exceeded (b) the actual amount distributed on such Class in respect of
interest on such immediately preceding Distribution Date and (ii) the amount of
any Interest Carry Forward Amount for such Class 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 Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates, REMIC I
Regular Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC
I Regular Interest I-LTM7, REMIC I Regular Interest I-LTB1, REMIC I Regular
Interest I-LTB2, REMIC I Regular Interest I-LTB3, REMIC I Regular Interest
I-LTB4, REMIC I Regular Interest I-LTB5, and any Interest Accrual Period
therefor, the second London Business Day preceding the commencement of such
Interest Accrual Period.

                  "Interest Distribution Amount": With respect to any
Distribution Date and any Class A Certificates, any Mezzanine Certificates, any
Class B Certificates and any Class CE Certificates, the aggregate Accrued
Certificate Interest on the Certificates of such Class for such Distribution
Date.

                  "Interest Remittance Amount": With respect to any Distribution
Date is that portion of the Available Distribution Amount for such Distribution
Date that represents interest

                                       24
<PAGE>

received or advanced on the Mortgage Loans (net of the Administration Fees and
any Prepayment Charges and after taking into account amounts payable or
reimbursable to the Trustee, the Custodian, the Securities Administrator, the
Master Servicer or the Servicer pursuant to this Agreement or the Custodial
Agreement or RMC or RMAE pursuant to the Servicing Agreement).

                  "Last Scheduled Distribution Date": January 25, 2035.

                  "Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such Due Period with respect to such Mortgage Loan,
whether as late payments of Monthly Payments or as Insurance Proceeds,
Liquidation Proceeds or otherwise, which represent late payments or collections
of principal and/or interest due (without regard to any acceleration of payments
under the related Mortgage and Mortgage Note) but delinquent for such Due Period
and not previously recovered.

                  "Litton Mortgage Loans": Those Mortgage Loans serviced by
Litton pursuant to the terms of this Agreement as specified on the Mortgage Loan
Schedule and from and after the related Servicing Transfer Date, the RMC
Mortgage Loans and RMAE Mortgage Loans transferred to Litton on such Servicing
Transfer Date

                  "Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.13(c) or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 10.01.

                  "Liquidation Proceeds": The amount (other than Insurance
Proceeds, amounts received in respect of the rental of any REO Property prior to
REO Disposition, or required to be released to a Mortgagor or a senior
lienholder in accordance with applicable law or the terms of the related
Mortgage Loan Documents) received by the Servicer, RMC or RMAE 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 (other than amounts required to be
released to the Mortgagor or a senior lienholder), (ii) the liquidation of a
defaulted Mortgage Loan through a trustee's sale, foreclosure sale or otherwise,
(iii) the repurchase, substitution or sale of a Mortgage Loan or an REO Property
pursuant to or as contemplated by Section 2.03, Section 3.13(c), Section 3.21 or
Section 10.01 of this Agreement or pursuant to the Servicing Agreement or (iv)
any Subsequent Recoveries.

                  "Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.

                  "London Business Day": Any day on which banks in the Cities of
London and New York are open and conducting transactions in United States
dollars.

                                       25
<PAGE>

                  "Loss Severity Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
amount of Realized Losses incurred on a Mortgage Loan and the denominator of
which is the principal balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.

                  "Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the REMIC I Remittance Rate for each of REMIC I Regular Interest
I-LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC
I Regular Interest I-LTB3, REMIC I Regular Interest I-LTB4, REMIC I Regular
Interest I-LTB5 and REMIC I Regular Interest I-LTZZ, with the rate on each such
REMIC I Regular Interest (other than REMIC I Regular Interest I-LTZZ) subject to
a cap equal to the lesser of (i) the related One-Month LIBOR Pass-Through Rate
and (ii) the Net WAC Pass-Through Rate for the corresponding Certificate for the
purpose of this calculation for such Distribution Date and with the rate on
REMIC I Regular Interest I-LTZZ subject to a cap of zero for the purpose of this
calculation; provided however, each such cap for each REMIC I Regular Interest
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.

                  "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 Certification": A written certification
covering servicing of the Mortgage Loans by a Servicer and signed by an officer
of the Master Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superseded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Sarbanes-Oxley Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.

                  "Master Servicer Event of Default": One or more of the events
described in Section 8.01(b).

                  "Master Servicer Fee Rate": 0.0085% per annum.

                  "Master Servicing Fee": With respect to each Mortgage Loan and
for any calendar month, an amount equal to one twelfth of the product of the
Master Servicer Fee Rate

                                       26
<PAGE>

multiplied by the Scheduled Principal Balance of the Mortgage Loans as of the
Due Date in the preceding calendar month.

                  "Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC
I Regular Interest I-LTM7, REMIC I Regular Interest I-LTB1, REMIC I Regular
Interest I-LTB2, REMIC I Regular Interest I-LTB3, REMIC I Regular Interest
I-LTB4 and REMIC I Regular Interest I-LTB5 for such Distribution Date, with the
rate on each such REMIC I Regular Interest subject to a cap equal to the lesser
of (i) the related One-Month LIBOR Pass-Through Rate and (ii) the Net WAC
Pass-Through Rate for the corresponding Certificate for the purpose of this
calculation for such Distribution Date; provided however, each such cap for each
REMIC I Regular Interest 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.

                  "Maximum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.

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

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

                  "Mezzanine Certificate": Any Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6 or Class M-7 Certificate.

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

                  "Minimum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.

                  "MOM Loan": With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the originator of
such Mortgage Loan and its successors and assigns, at the origination thereof.

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor

                                       27
<PAGE>

pursuant to the Relief Act or similar state laws; (b) without giving effect to
any extension granted or agreed to by the Servicer pursuant to Section 3.01 of
this Agreement or by RMC or RMAE pursuant to the Servicing Agreement; and (c) on
the assumption that all other amounts, if any, due under such Mortgage Loan are
paid when due.

                  "Moody's": Moody's Investors Service, Inc. or any successor
interest.

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

                  "Mortgage File": The Mortgage Loan Documents pertaining to a
particular Mortgage Loan.

                  "Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee and the Mortgage Loan Documents for which have been delivered to
the Custodian pursuant to Section 2.01 of this Agreement and pursuant to the
Custodial Agreement, as held from time to time as a part of the Trust Fund, the
Mortgage Loans so held being identified in the Mortgage Loan Schedule.

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

                  "Mortgage Loan Purchase Agreement": Shall mean the Mortgage
Loan Purchase Agreement dated as of December 29, 2004, between the Depositor and
the Seller.

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, separately identifying the Mortgage
Loans, attached hereto as Schedule 1. The Depositor shall deliver or cause the
delivery of the initial Mortgage Loan Schedule to the Servicer, the Master
Servicer, the Custodian and the Trustee on the Closing Date. The Mortgage Loan
Schedule shall set forth the following information with respect to each Mortgage
Loan:

                           (i) the Mortgage Loan identifying number;

                           (ii) the Mortgagor's first and last name; (iii) the
         street address of the Mortgaged Property including the state and zip
         code;

                           (iv) a code indicating whether the Mortgaged Property
         is owner-occupied;

                           (v) the type of Residential Dwelling constituting the
         Mortgaged Property;

                           (vi) the original months to maturity;

                                       28
<PAGE>

                           (vii) the original date of the Mortgage Loan and the
         remaining months to maturity from the Cut-off Date, based on the
         original amortization schedule;

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

                           (ix) the Mortgage Rate in effect immediately
         following the Cut-off Date;

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

                           (xi) the stated maturity date;

                           (xii) the amount of the Monthly Payment at
         origination;

                           (xiii) the amount of the Monthly Payment as of the
         Cut-off Date;

                           (xiv) the last Due Date on which a Monthly Payment
         was actually applied to the unpaid Stated Principal Balance;

                           (xv) the original principal amount of the Mortgage
         Loan;

                           (xvi) the Stated Principal Balance of the Mortgage
         Loan as of the close of business on the Cut-off Date;

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

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

                           (xix) a code indicating the purpose of the loan
         (i.e., purchase financing, rate/term refinancing, cash-out
         refinancing);

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

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

                           (xxii) the Mortgage Rate at origination;

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

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

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

                                       29
<PAGE>

                           (xxvi) the date on which the first Monthly Payment
         was due on the Mortgage Loan and, if such date is not consistent with
         the Due Date currently in effect, such Due Date;

                           (xxvii) a code indicating whether the Mortgage Loan
         is an Adjustable Rate Mortgage Loan or a fixed rate Mortgage Loan;

                           (xxviii) a code indicating the documentation style
         (i.e., full, stated or limited);

                           (xxix) a code indicating if the Mortgage Loan is
         subject to a primary insurance policy or lender paid mortgage insurance
         policy and the name of the insurer;

                           (xxx) the Appraised Value of the Mortgaged Property;

                           (xxxi) the sale price of the Mortgaged Property, if
         applicable;

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

                           (xxxiii) the product type (e.g., 2/28, 15 year fixed,
         30 year fixed, 15/30 balloon, etc.);

                           (xxxiv) the Mortgagor's debt to income ratio;

                           (xxxv) the FICO score at origination;

                           (xxxvi) the Servicer, RMC or RMAE, if applicable.

                  The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal
balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, the Cut-off Date shall refer to the related Cut-off
Date for such Mortgage Loan, determined in accordance with the definition of
Cut-off Date herein.

                  "Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan.

                  "Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate with
respect to each Adjustable Rate Mortgage 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 Mortgage Loan Schedule as the Mortgage Rate in
effect immediately following the Cut-off Date and (B) as of any date of
determination thereafter shall be the rate as adjusted on the most recent
Adjustment Date equal to the sum, rounded to the nearest 0.125% as

                                       30
<PAGE>

provided in the Mortgage Note, of the Index, as most recently available as of a
date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such
Adjustable Rate Mortgage Loan on any Adjustment Date shall never be more than
the lesser of (i) the sum of the Mortgage Rate in effect immediately prior to
the Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the
related Maximum Mortgage Rate, and shall never be less than the greater of (i)
the Mortgage Rate in effect immediately prior to the Adjustment Date less the
Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.

                  "Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.

                  "Mortgagor": The obligor on a Mortgage Note.

                  "Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the 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 Class A Certificates, (B) the aggregate Interest Distribution Amounts
payable to the holders of the Mezzanine Certificates and the Class B
Certificates and (C) the Principal Remittance Amount.

                  "Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Administration Fee Rate.

                  "Net WAC Pass-Through Rate": With respect to the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates and any
Distribution Date, a rate per annum equal to the product of (x) the weighted
average of the Expense Adjusted Mortgage Rates on the then outstanding Mortgage
Loans, weighted based on their Stated Principal Balances as of the first day of
the calendar month preceding the month in which the Distribution Date occurs and
(y) a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of (adjusted for the actual number of days
elapsed in the related Interest Accrual Period) the REMIC I Remittance Rates on
the REMIC I Regular Interests, weighted on the basis of the Uncertificated
Principal Balance of such REMIC I Regular Interests.

                  "Net WAC Rate Carryover Amount" : With respect to any Class A
Certificate, Mezzanine Certificate or Class B Certificate and any Distribution
Date on which the Pass-Through Rate is limited to the applicable Net WAC
Pass-Through Rate, an amount equal to the sum of (i) the excess of (x) the
amount of interest such Class would have been entitled to receive on such
Distribution Date if the applicable Net WAC Pass-Through Rate would not have
been applicable to such Class on such Distribution Date over (y) the amount of
interest paid to such Class on such Distribution Date at the applicable Net WAC
Pass-Through Rate plus (ii) the

                                       31
<PAGE>

related Net WAC Rate Carryover Amount for the previous Distribution Date not
previously distributed to such Class together with interest thereon at a rate
equal to the Pass-Through Rate for such Class for the most recently ended
Interest Accrual Period without taking into account the applicable Net WAC
Pass-Through Rate.

                  "New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.

                  "Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Servicer, RMC, RMAE or a successor to
the Servicer, RMC or RMAE (including the Master Servicer) will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
Late Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage
Loan or REO Property as provided herein.

                  "Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Servicer , RMC or
RMAE, will not or, in the case of a proposed Servicing Advance, would not be
ultimately recoverable from related Late Collections, Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein or
in the Servicing Agreement.

                  "Non-United States Person": Any Person other than a United
States Person.

                  "Notional Amount" : With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC I Regular
Interests (other than REMIC I Regular Interest I-LTP) for such Distribution
Date.

                  "Offered Certificates" : The Class A Certificates and the
Mezzanine Certificates, collectively.

                  "Officer's Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.

                  "One-Month LIBOR" : With respect to the Class A Certificates,
the Mezzanine Certificates, the Class B Certificates, REMIC I Regular Interest
I-LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC
I Regular Interest I-LTB3, REMIC I Regular Interest I-LTB4 and REMIC I Regular
Interest I-LTB5 and any Interest Accrual Period therefor, the rate determined by
the Securities Administrator on the related Interest Determination Date on the
basis of the offered rate for one-month U.S. dollar deposits, as such rate
appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the offered
rates of the Reference Banks for one-month U.S. dollar deposits, as of 11:00

                                       32
<PAGE>

a.m. (London time) on such Interest Determination Date. In such event, the
Securities Administrator will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If on such Interest
Determination Date, two or more Reference Banks provide such offered quotations,
One-Month LIBOR for the related Interest Accrual Period shall be the arithmetic
mean of such offered quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above, LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Securities Administrator shall select an alternative comparable index
(over which the Securities Administrator has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party. The establishment of
One-Month LIBOR by the Securities Administrator and the Securities
Administrator's subsequent calculation of the One-Month LIBOR Pass-Through Rates
for the relevant Interest Accrual Period, shall, in the absence of manifest
error, be final and binding.

                  "One-Month LIBOR Pass-Through Rate": With respect to the Class
A Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA, a per annum rate equal to One-Month LIBOR plus the
related Certificate Margin.

                  With respect to the Class M-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM1, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM2, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM3, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM4, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-5 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM5, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-6 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM6, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-7 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM7, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                                       33
<PAGE>

                  With respect to the Class B-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB1, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class B-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB2, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class B-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB3, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class B-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB4, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class B-5 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB5, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  "Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor, the Servicer, RMC,
RMAE, 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.

                  "Optional Termination Date": The Distribution Date on which
the aggregate principal balance of the Mortgage Loans (and properties acquired
in respect thereof) remaining in the Trust Fund is equal to or less than 10% of
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Originators":  RMC and RMAE (each, an "Originator").

                  "Overcollateralization Amount": With respect to any
Distribution Date, the excess, if any, of (a) the aggregate Stated Principal
Balances of the Mortgage Loans and REO Properties immediately following such
Distribution Date over (b) the sum of the aggregate Certificate Principal
Balances of the Class A Certificates, the Mezzanine Certificates, the Class B
Certificates and the Class P Certificates as of such Distribution Date (after
taking into account the payment of the Principal Remittance Amount on such
Distribution Date).

                  "Overcollateralization Increase Amount": With respect to the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates
and any Distribution Date is any amount of Net Monthly Excess Cashflow actually
applied as an accelerated payment of principal to the extent the Required
Overcollateralization Amount exceeds the Overcollateralization Amount.

                  "Overcollateralization Reduction Amount" : With respect to any
Distribution Date, is the lesser of (i) the amount by which the
Overcollateralization Amount exceeds the Required Overcollateralization Amount
and (ii) the Principal Remittance Amount; provided

                                       34
<PAGE>

however that on any Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Reduction Amount shall equal zero.

                  "Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.

                  "P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Servicer in respect of any Determination Date pursuant to
Section 5.03 of this Agreement, an Advance Financing Person pursuant to Section
3.25 of this Agreement or in respect of any Distribution Date by a successor
Servicer (including the Master Servicer) pursuant to Section 8.02 of this
Agreement, or RMC or RMAE pursuant to the Servicing Agreement (which advances
shall not include principal or interest shortfalls due to bankruptcy proceedings
or application of the Relief Act or similar state or local laws.)

                  "Pass-Through Rate": With respect to the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates, and any Distribution
Date, a rate per annum equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate for such Distribution Date and (ii) the related Net WAC
Pass-Through Rate for such Distribution Date.

                  With respect to the Class CE Certificates and any Distribution
Date, a rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (i)
through (xvii) below, and the denominator of which is the aggregate
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest
I-LTB2, REMIC I Regular Interest I-LTB3, REMIC I Regular Interest I-LTB4, REMIC
I Regular Interest I-LTB5 and REMIC I Regular Interest I-LTZZ. For purposes of
calculating the Pass-Through Rate for the Class CE Certificates, the numerator
is equal to the sum of the following components:

                           (i) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTAA minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTAA;

                           (ii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTA minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA;

                           (iii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM1 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM1;

                           (iv) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM2 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM2;

                                       35
<PAGE>

                           (v) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM3 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM3;

                           (vi) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM4 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM4;

                           (vii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM5 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM5;

                           (viii) the REMIC I Remittance Rate for REMIC I
         Regular Interest I-LTM6 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Balance of REMIC I Regular Interest I-LTM6;

                           (ix) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM7 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM7;

                           (x) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTB1 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTB1;

                           (xi) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTB2 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTB2;

                           (xii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTB3 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTB3;

                           (xiii) the REMIC I Remittance Rate for REMIC I
         Regular Interest I-LTB4 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Balance of REMIC I Regular Interest I-LTB4;

                           (xiv) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTB5 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTB5;

                           (xv) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTZZ minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTZZ; and

                           (xvi) 100% of the interest on REMIC I Regular
         Interest I-LTP.

                  "Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal

                                       36
<PAGE>

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. The Class A Certificates, the Mezzanine Certificates
and the Class B Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $25,000 and
integral multiples of $1.00 in excess thereof. The Class P Certificates are
issuable only in Percentage Interests corresponding to initial Certificate
Principal Balances of $20 and integral multiples thereof. The Class CE
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Notional Balances of $10,000 and integral multiples of $1.00 in
excess thereof; 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 Notional Balance of such 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, as set forth on the face of such
Certificate. The Residual Certificates are issuable in Percentage Interests of
20% and integral multiples of 5% in excess thereof.

                  "Periodic Rate Cap": With respect to each Adjustable Rate
Mortgage 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
Rate for such Adjustable Rate Mortgage Loan may increase or decrease (without
regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such
Adjustment Date from the Mortgage Rate in effect immediately prior to such
Adjustment Date.

                  "Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Servicer, the Master
Servicer, the Trustee or any of their respective Affiliates:

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

                           (ii) (A) demand and time deposits in, certificates of
         deposit of, bankers' acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Trustee or its
         agent acting in their respective commercial capacities) incorporated
         under the laws of the United States of America or any state thereof and
         subject to supervision and examination by federal and/or state
         authorities, so long as, at the time of such investment or contractual
         commitment providing for such investment, such depository institution
         or trust company (or, if the only Rating Agency is S&P, in the case of
         the principal depository institution in a depository institution
         holding company, debt obligations of the depository institution holding
         company) or its ultimate parent has a short-term uninsured debt rating
         in the highest available rating category of Moody's, Fitch and S&P and
         provided that each such investment has an original maturity of no more
         than 365 days; and provided further that, if the only Rating Agency is
         S&P and if the depository or trust company is a principal subsidiary of
         a bank holding company and the debt obligations of such subsidiary are
         not separately rated, the applicable rating shall be that of the bank
         holding company; and, provided further that, if the original maturity
         of such short-term obligations of a domestic branch of a foreign

                                       37
<PAGE>

         depository institution or trust company shall exceed 30 days, the
         short-term rating of such institution shall be A-1+ in the case of S&P
         if S&P is the Rating Agency; and (B) any other demand or time deposit
         or deposit which is fully insured by the FDIC;

                           (iii) repurchase obligations with a term not to
         exceed 30 days with respect to any security described in clause (i)
         above and entered into with a depository institution or trust company
         (acting as principal) rated A-1+ or higher by S&P, F-1 or higher by
         Fitch and A2 or higher by Moody's, provided, however, that collateral
         transferred pursuant to such repurchase obligation must be of the type
         described in clause (i) above and must (A) be valued daily at current
         market prices plus accrued interest, (B) pursuant to such valuation, be
         equal, at all times, to 105% of the cash transferred by a party in
         exchange for such collateral and (C) be delivered to such party or, if
         such party is supplying the collateral, an agent for such party, in
         such a manner as to accomplish perfection of a security interest in the
         collateral by possession of certificated securities; (iv) 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 that are rated by each Rating Agency that
         rates such securities in its highest long-term unsecured rating
         categories at the time of such investment or contractual commitment
         providing for such investment;

                           (v) commercial paper (including both
         non-interest-bearing discount obligations and interest-bearing
         obligations payable on demand or on a specified date not more than 30
         days after the date of acquisition thereof) that is rated by each
         Rating Agency that rates such securities in its highest short-term
         unsecured debt rating available at the time of such investment;

                           (vi) units of money market funds that have been rated
         "AAA" by Fitch (if rated by Fitch), "AAAm" by S&P or "Aaa" by Moody's
         including any such money market fund managed or advised by the Master
         Servicer, the Trustee or any of their Affiliates; and

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

provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.

                  "Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.

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

                                       38
<PAGE>

                  "Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.

                  "Prepayment Assumption": A prepayment rate for the Adjustable
Rate Mortgage Loans of 28% CPR and a prepayment rate of 100% PPC for the fixed
rate Mortgage Loans. The Prepayment Assumption is used solely for determining
the accrual of original issue discount on the Certificates for federal income
tax purposes. A CPR (or Constant Prepayment Rate) represents an annualized
constant assumed rate of prepayment each month of a pool of mortgage loans
relative to its outstanding principal balance for the life of such pool. A 100%
PPC represents (i) a per annum prepayment rate of 4% of the then outstanding
principal balance of the fixed rate Mortgage Loans in the first month of the
life of such Mortgage Loans, (ii) an additional 1.72727% per annum in each month
thereafter through the eleventh month and (iii) a constant prepayment rate of
23% per annum beginning in the twelfth month and in each month thereafter during
the life of the fixed rate Mortgage Loans.

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

                  "Prepayment Charge Schedule": As of any date, the list of
Mortgage Loans providing for a Prepayment Charge included in the Trust Fund on
such date, attached hereto as Schedule 2 (including the prepayment charge
summary attached thereto). The Depositor shall deliver or cause the delivery of
the Prepayment Charge Schedule to the Servicer, the Master Servicer and the
Trustee on the Closing Date. The Prepayment Charge Schedule shall set forth the
following information with respect to each Prepayment Charge:

                           (i) the Mortgage Loan identifying number;

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

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

                           (iv) the term of the related Prepayment Charge;

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

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

                  "Prepayment Interest Excess": With respect to each Litton
Mortgage Loan that was the subject of a Principal Prepayment in full during the
portion of the related Prepayment Period occurring between the first day of the
calendar month in which such Distribution Date occurs and the fifteenth day of
the calendar month in which such Distribution Date occurs, an amount equal to
interest (to the extent received) at the applicable Net Mortgage Rate on the

                                       39
<PAGE>

amount of such Principal Prepayment for the number of days commencing on the
first day of the calendar month in which such Distribution Date occurs and
ending on the last date through which interest is collected from the related
Mortgagor.

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each such Mortgage Loan that was the subject of a
Principal Prepayment in full or in part during the portion of the related
Prepayment Period occurring between the first day of the related Prepayment
Period and the last day of the calendar month preceding the month in which such
Distribution Date occurs that was applied by the Servicer , RMC or RMAE to
reduce the outstanding principal balance of such Mortgage Loan on a date
preceding the Due Date in the succeeding Prepayment Period, an amount equal to
interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the calendar month preceding such
Distribution Date. The obligations of the Servicer and the Master Servicer in
respect of any Prepayment Interest Shortfall are set forth in Section 3.22 and
Section 4.18, respectively of this Agreement. The obligations of RMC and RMAE in
respect of any Prepayment Interest Shortfalls are set forth in the Servicing
Agreement.

                  "Prepayment Period": With respect to any Distribution Date,
the calendar month prior to the month of such Distribution Date.

                  "Principal Prepayment": Any voluntary payment of principal
made by the Mortgagor on a Mortgage Loan which is received in advance of its
scheduled Due Date and which is not accompanied by an amount of interest
representing the full amount of scheduled interest due on any Due Date in any
month or months subsequent to the month of prepayment.

                  "Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Mortgage 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 proceeds received in respect of the repurchase of a Mortgage Loan
or, in the case of a substitution, certain amounts representing a principal
adjustment, during the related Prepayment Period pursuant to or as contemplated
by Section 2.03, Section 3.13(c) and Section 10.01 of this Agreement or the
Servicing Agreement; (iii) the principal portion of all other unscheduled
collections, including Insurance Proceeds, Liquidation Proceeds and all
Principal Prepayments in full and in part, received during the related
Prepayment Period, to the extent applied as recoveries of principal on the
Mortgage Loans, net in each case of payments or reimbursements to the Trustee,
the Custodian, the Master Servicer, the Securities Administrator, the Servicer,
RMC or RMAE and (iv) the amount of any Overcollateralization Increase Amount for
such Distribution Date MINUS (v) the amount of any Overcollateralization
Reduction Amount for such Distribution Date.

                  "Principal Remittance Amount": With respect to any
Distribution Date will be the sum of the amounts described in clauses (i)
through (iii) of the definition of Principal Distribution Amount.

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.13(c) or Section 10.01, and as confirmed by a certification of a Servicing
Officer to the Trustee, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof as of the date of purchase (or such other price

                                       40
<PAGE>

as provided in Section 10.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or a P&I Advance by the Servicer, RMC or RMAE,
which payment or P&I Advance had as of the date of purchase been distributed
pursuant to Section 5.01, through the end of the calendar month in which the
purchase is to be effected and (y) an REO Property, the sum of (1) accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or a P&I Advance by the Servicer, RMC or RMAE
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 P&I Advances that as of the date of purchase
had been distributed as or to cover REO Imputed Interest pursuant to Section
5.01, (iii) any unreimbursed Servicing Advances and P&I Advances (including
Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances) and any
unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any
amounts previously withdrawn from the Collection Account pursuant to Section
3.09(a)(ix) and Section 3.13(b) and (v) in the case of a Mortgage Loan required
to be purchased pursuant to Section 2.03, expenses reasonably incurred or to be
incurred by RMC, RMAE, the Servicer or the Trustee in respect of the breach or
defect giving rise to the purchase obligation and any costs and damages incurred
by the Trust Fund and the Trustee in connection with any violation by any such
Mortgage Loan of any predatory or abusive lending law.

                  "QIB": As defined in Section 6.01(c).

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage 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 Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii) if the mortgage loan is an Adjustable
Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum
Mortgage Rate on the Deleted Mortgage Loan, (iv) if the mortgage loan is an
Adjustable Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the mortgage loan is
an Adjustable Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin
of the Deleted Mortgage Loan, (vi) if the mortgage loan is an Adjustable Rate
Mortgage Loan, have a next Adjustment Date not more than two months later than
the next Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining
term to maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage 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
Mortgage Loan as of such date, (x) be secured by the same lien priority on the
related Mortgaged Property as the Deleted Loan, (xi) have a credit grade at
least equal to the credit grading assigned on the Deleted Mortgage Loan, (xii)
be a "qualified mortgage" as defined in the REMIC Provisions and (xiii) conform
to each representation and warranty set forth in Section 6 of the Mortgage Loan

                                       41
<PAGE>

Purchase Agreement applicable to the Deleted Mortgage Loan. In the event that
one or more mortgage loans are substituted for one or more Deleted Mortgage
Loans, the amounts described in clause (i) hereof shall be determined on the
basis of aggregate principal balances, the Mortgage Rates described in clause
(ii) hereof shall be determined on the basis of weighted average Mortgage 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
credit grades described 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 Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.

                  "Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than a nominal amount in excess of the existing
first mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
nominal amount) to satisfy the then existing first mortgage loan and any
subordinate mortgage loan of the Mortgagor on the related Mortgaged Property and
to pay related closing costs.

                  "Rating Agency or Rating Agencies": Moody's and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Servicer.

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero), as reported by the Servicer to the Master Servicer (in substantially the
form of Schedule 4 hereto) or by RMC or RMAE to the Master Servicer pursuant to
the Servicing Agreement, equal to (i) the unpaid principal balance of such
Mortgage Loan as of the commencement of the calendar month in which the Final
Recovery Determination was made, plus (ii) accrued interest from the Due Date as
to which interest was last paid by the Mortgagor through the end of the calendar
month in which such Final Recovery Determination was made, calculated in the
case of each calendar month during such period (A) at an annual rate equal to
the annual rate at which interest was then accruing on such Mortgage Loan and
(B) on a principal amount equal to the Stated Principal Balance of such Mortgage
Loan as of the close of business on the Distribution Date during such calendar
month, plus (iii) any amounts previously withdrawn from the Collection Account
or Custodial Account in respect of such Mortgage Loan pursuant to Section
3.09(a)(ix) and Section 3.13(b) of this Agreement or pursuant to the Servicing
Agreement, minus (iv) the proceeds, if any, received in respect of such Mortgage
Loan during the calendar month in which such Final Recovery Determination was
made, net of amounts that are payable therefrom to the Servicer, RMC or RMAE
with respect to such Mortgage Loan pursuant to Section 3.09(a)(iii) of this
Agreement or pursuant to the Servicing Agreement.

                  With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately

                                       42
<PAGE>

preceding the calendar month in which such REO Property was acquired, calculated
in the case of each calendar month during such period (A) at an annual rate
equal to the annual rate at which interest was then accruing on the related
Mortgage Loan and (B) on a principal amount equal to the Stated Principal
Balance of the related Mortgage Loan as of the close of business on the
Distribution Date during such calendar month, plus (iii) 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 Final Recovery Determination was made, plus (iv) any amounts
previously withdrawn from the Collection Account or Custodial Account in respect
of the related Mortgage Loan pursuant to Section 3.09(a)(ix) and Section 3.13(b)
of this Agreement or pursuant to the Servicing Agreement, minus (v) the
aggregate of all P&I Advances and Servicing Advances (in the case of Servicing
Advances, without duplication of amounts netted out of the rental income,
Insurance Proceeds and Liquidation Proceeds described in clause (vi) below) made
by the Servicer, RMC or RMAE in respect of such REO Property or the related
Mortgage Loan for which the Servicer, RMC or RMAE has been or, in connection
with such Final Recovery Determination, will be reimbursed pursuant to Section
3.21 of this Agreement or pursuant to the Servicing Agreement out of rental
income, Insurance Proceeds and Liquidation Proceeds received in respect of such
REO Property, minus (vi) the total of all net rental income, Insurance Proceeds
and Liquidation Proceeds received in respect of such REO Property that has been,
or in connection with such Final Recovery Determination, will be transferred to
the Distribution Account pursuant to Section 3.21 of this Agreement or pursuant
to the Servicing Agreement.

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

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

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

                  "Record Date": With respect to each Distribution Date and the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates,
the Business Day immediately preceding such Distribution Date for so long as
such Certificates are Book-Entry Certificates. With respect to each Distribution
Date and any other Class of Certificates, including any Definitive Certificates,
the last day of the calendar month immediately preceding the month in which such
Distribution Date occurs.

                  "Reference Banks": Barclay's Bank PLC, The Tokyo Mitsubishi
Bank and National Westminster Bank PLC and their successors in interest;
provided, however, that if any of the foregoing banks are not suitable to serve
as a Reference Bank, then any leading banks

                                       43
<PAGE>

selected by the Securities Administrator which are engaged in transactions in
Eurodollar deposits in the International Eurocurrency market (i) with an
established place of business in London, (ii) not controlling, under the control
of or under common control with the Depositor or any Affiliate thereof and (iii)
which have been designated as such by the Securities Administrator.

                  "Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.

                  "Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class B Certificate, Class CE Certificate or Class P Certificate.

                  "Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.

                  "Regulation S Temporary Global Certificate": As defined in
Section 6.01(c).

                  "Regulation S Permanent Global Certificate": As defined in
Section 6.01(c).

                  "Release Date": The 40th day after the later of (i)
commencement of the offering of the Class B Certificates and (ii) the Closing
Date.

                  "Relief Act": The Servicemembers Civil Relief Act, as amended,
or similar state or local laws.

                  "Relief Act Interest Shortfall" : With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended Due Period 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 subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof; (ii) any REO Property, together
with all collections thereon and proceeds thereof; (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof; (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby), the Assignment Agreement and the Servicing
Agreement and (v) the Custodial Accounts, Collection Account, the Distribution
Account and any REO Account, and such assets that are deposited therein from
time to time and any investments thereof, together with any and all income,
proceeds and payments with respect thereto. Notwithstanding the foregoing,
however, REMIC I specifically excludes (i) all payments and other collections of
principal and interest due on the Mortgage Loans on or before the Cut-off Date
and all Prepayment Charges payable in connection with Principal Prepayments made
before the Cut-off Date; (ii) the Reserve Fund and any amounts on deposit
therein from time to time and any proceeds thereof and (iii) the Cap Contract.

                                       44
<PAGE>

                  "REMIC I Interest Loss Allocation Amount" : With respect to
any Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, divided by (b) 12.

                  "REMIC I Overcollateralization Amount": With respect to any
date of determination, (i) 1.00% of the aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LTA, REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3, REMIC
I Regular Interest I-LTB4, REMIC I Regular Interest I-LTB5 and REMIC I Regular
Interest I-LTP, in each case as of such date of determination.

                  "REMIC I Principal Loss Allocation Amount" : With respect to
any Distribution Date, an amount equal to (a) the product of (i) 1.00% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC I Regular Interest I-LTA,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC
I Regular Interest I-LTB3, REMIC I Regular Interest I-LTB4 and REMIC I Regular
Interest I-LTB5 and the denominator of which is the aggregate of the
Uncertificated Balances of REMIC I Regular Interest I-LTA, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest
I-LTB3, REMIC I Regular Interest I-LTB4, REMIC I Regular Interest I-LTB5 and
REMIC I Regular Interest I-LTZZ.

                  "REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTAA": 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 I-LTAA
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                                       45
<PAGE>

                  "REMIC I Regular Interest I-LTA": 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 I-LTA
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB1": 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 I-LTB1
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB2": 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 I-LTB2
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB3": 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 I-LTB3
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB4": 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 I-LTB4
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB5": 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 I-LTB5
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM1": 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 I-LTM1
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                                       46
<PAGE>

                  "REMIC I Regular Interest I-LTM2": 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 I-LTM2
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM3": 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 I-LTM3
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM4": 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 I-LTM4
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM5": 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 I-LTM5
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM6": 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 I-LTM6
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM7": 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 I-LTM7
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTP" : 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 I-LTP
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                                       47
<PAGE>

                  "REMIC I Regular Interest I-LTZZ": 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 I-LTZZ
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Remittance Rate": With respect to REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest I-LTA, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest I-LTB3, REMIC
I Regular Interest I-LTB4, REMIC I Regular Interest I-LTB5, REMIC I Regular
Interest I-LTZZ and REMIC I Regular Interest I-LTP, the weighted average of the
Expense Adjusted Mortgage Rates of the Mortgage Loans.

                  "REMIC I Required Overcollateralization Amount": 1% of the
Required Overcollateralization Amount.

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

                  "REMIC II Certificate": Any Regular Certificate or Class R
Certificate.

                  "REMIC II Certificateholder": The Holder of any REMIC II
Certificate.

                  "REMIC Provisions": Provisions of the 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": Any REMIC I Regular Interest.

                  "REMIC Remittance Rate": The REMIC I Remittance Rate.

                  "Remittance Report": A report by the Servicer pursuant to
Section 5.03(a) of this Agreement or RMC or RMAE pursuant to the Servicing
Agreement.

                  "Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."

                   "REO Account": The account or accounts maintained, or caused
to be maintained, by the Servicer in respect of an REO Property pursuant to
Section 3.21 of this Agreement or by RMC or RMAE pursuant to the Servicing
Agreement.

                                       48
<PAGE>

                  "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 Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 of this Agreement that is allocable to such REO Property) or otherwise,
net of any portion of such amounts (i) payable in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Servicer pursuant to Section 3.21(d) of this Agreement or
RMC or RMAE pursuant to the Servicing Agreement for unpaid Servicing Fees in
respect of the related Mortgage Loan and unreimbursed Servicing Advances and P&I
Advances in respect of such REO Property or the related Mortgage Loan, over (b)
the REO Imputed Interest in respect of such REO Property for such calendar
month.

                  "REO Property": A Mortgaged Property acquired by the Trustee
or its nominee on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.21 of this Agreement or RMC or RMAE
pursuant to the Servicing Agreement.

                  "Required Overcollateralization Amount" : With respect to any
Distribution Date (i) prior to the Stepdown Date, the product of (A) 0.95% and
(B) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, (ii) on or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (x) 1.90% of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (y) an
amount equal to the product of (A) 0.50% and (B) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date, and (iii) on or after the Stepdown
Date and a Trigger Event is in effect, the Required Overcollateralization Amount
for the immediately preceding Distribution Date.

                  "Reserve Fund": A fund created pursuant to Section 3.24 which
shall be an asset of the Trust Fund but which shall not be an asset of any Trust
REMIC.

                  "Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Securities Administrator
determines to be either (i) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 1/16%) of the one-month U.S. dollar lending rates
which New York City banks selected by the Securities Administrator, after
consultation with the Depositor, are quoting on the relevant Interest
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.

                                       49
<PAGE>

                  "Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a Fannie Mae eligible condominium project,
(iv) a manufactured home, or (v) a detached one-family dwelling in a planned
unit development, none of which is a co-operative or mobile home.

                  "Residual Certificate": Any one of the Class R Certificates.

                  "Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.

                  "Responsible Officer": When used with respect to the Trustee,
any officer of the Trustee having direct responsibility for the administration
of this Agreement and, with respect to a particular matter, to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.

                  "RMAE": Residential Mortgage Assistance Enterprise, LLC.

                  "RMAE Mortgage Loans": The Mortgage Loans being serviced by
RMAE as of the Closing Date.

                  "RMC": ResMae Mortgage Corporation.

                  "RMC Mortgage Loans": The Mortgage Loans being serviced by RMC
as of the Closing Date.

                  "Rule 144A": As defined in Section 6.01(c).

                  "S&P": Standard and Poor's, a division of the McGraw-Hill
Companies, Inc.

                  "Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Fund up to and including the Due Date in the calendar month in which a
Liquidation Event

                                       50
<PAGE>

occurs with respect to such REO Property, an amount (not less than zero) equal
to the Scheduled Principal Balance of the related Mortgage Loan as of the Due
Date in the calendar month in which such REO Property was acquired, minus the
aggregate amount of REO Principal Amortization, if any, in respect of REO
Property for all previously ended calendar months; and (b) as of any Due Date
subsequent to the occurrence of a Liquidation Event with respect to such REO
Property, zero.

                  "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 that 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.

                  "Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount, if any, for such Distribution Date for the Class
A Certificates.

                  "Servicer": Litton Loan Servicing LP, or any successor thereto
appointed hereunder in connection with the servicing and administration of the
Mortgage Loans.

                  "Servicer Event of Default": One or more of the events
described in Section 8.01(a).

                  "Servicer Remittance Date": With respect to any Distribution
Date, by 3:00 p.m. New York time three Business Days immediately preceding the
related Distribution Date.

                  "Servicer Report": A report (substantially in the form of
Schedule 5 hereto) or otherwise in form and substance acceptable to the Master
Servicer and Securities Administrator on an electronic data file or tape
prepared by the Servicer, RMC or RMAE pursuant to Section 5.03(a) of this
Agreement or pursuant to the Servicing Agreement, as applicable, with such
additions, deletions and modifications as agreed to by the Master Servicer, the
Securities Administrator and the Servicer, RMC or RMAE.

                  "Servicing Advances": The customary and reasonable
"out-of-pocket" costs and expenses incurred prior to or on or after the Cut-off
Date by the Servicer, RMC or RMAE in connection with a default, delinquency or
other unanticipated event by the Servicer, RMC or RMAE 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 but not limited to foreclosures,
in respect of a particular Mortgage Loan, including any expenses incurred in
relation to any such proceedings that result from the Mortgage Loan being
registered on the MERS(R) System, (iii) the management (including reasonable
fees in connection therewith) and liquidation of any REO Property and (iv) the
performance of its obligations under Section 3.01, Section 3.07, Section 3.11,
Section 3.13 and Section 3.21 of this Agreement or under the Servicing
Agreement. Servicing Advances also include any reasonable "out-of-pocket" cost
and expenses (including legal fees) incurred by the

                                       51
<PAGE>

Servicer, RMC or RMAE in connection with executing and recording instruments of
satisfaction, deeds of reconveyance or Assignments to the extent not recovered
from the Mortgagor or otherwise payable under this Agreement or the Servicing
Agreement. Neither the Servicer nor RMC or RMAE shall be required to make any
Nonrecoverable Servicing Advances.

                  "Servicing Agreement": The Servicing Agreement, dated as of
September 1, 2004 among Residential Mortgage Assistance Enterprise LLC, ResMae
Mortgage Corporation and DB Structured Products Inc.

                  "Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one-twelfth of the product of the
Servicing Fee Rate multiplied by the Scheduled Principal Balance of the Mortgage
Loans as of the Due Date in the preceding calendar month. The Servicing Fee is
payable solely from collections of interest on the Mortgage Loans.

                  "Servicing Fee Rate":  0.50% per annum.

                  "Servicing Officer": Any officer of the Servicer, RMC or RMAE
involved in, or responsible for, the administration and servicing of Mortgage
Loans, whose name and specimen signature appear on a list of Servicing Officers
furnished by the Servicer, RMC or RMAE to the Trustee, the Master Servicer, the
Securities Administrator and the Depositor on the Closing Date, as such list may
from time to time be amended.

                  "Servicing Rights Pledgee": One or more lenders, selected by
the Servicer, to which the Servicer will pledge and assign all of its right,
title and interest in, to and under this Agreement, including Wachovia Bank,
National Association, as the representative of certain lenders.

                  "Servicing Transfer Date": With respect to 17.20% of the
Mortgage Loans, January 15, 2005, with respect to 5.18% of the Mortgage Loans,
February 15, 2005 and with respect to 0.10 of the Mortgage Loans, March 15,
2005.

                  "Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Principal Balance of $1,000. With respect to the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 100%
Percentage Interest in such Class.

                  "Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 11.01(b) hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Servicer, RMC or RMAE or a successor to the Servicer, RMC or
RMAE (including the Master Servicer) and distributed pursuant to Section 5.01 of
this Agreement on or before such date of determination, (ii) all Principal
Prepayments received after the Cut-off Date, to the extent

                                       52
<PAGE>

distributed pursuant to Section 5.01 of this Agreement on or before such date of
determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied by
the Servicer, RMC or RMAE as recoveries of principal in accordance with the
provisions of Section 3.13 of this Agreement or pursuant to the Servicing
Agreement, to the extent distributed pursuant to Section 5.01 of this Agreement
on or before such date of determination, and (iv) any Realized Loss incurred
with respect thereto as a result of a Deficient Valuation made during or prior
to the Prepayment Period for the most recent Distribution Date coinciding with
or preceding such date of determination; and (b) as of any date of determination
coinciding with or subsequent to the Distribution Date on which the proceeds, if
any, of a Liquidation Event with respect to such Mortgage Loan would be
distributed, zero. With respect to any REO Property: (a) as of any date of
determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Servicer, RMC, RMAE or a successor to
the Servicer, RMC or RMAE (including the Master Servicer) and distributed
pursuant to Section 5.01 of this Agreement, on or before such date of
determination and (ii) the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 of this Agreement on or before such
date of determination; and (b) as of any date of determination coinciding with
or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

                  "Stepdown Date": The earlier to occur of (i) the later to
occur of (a) the Distribution Date occurring in January 2008 and (b) the first
Distribution Date on which the Credit Enhancement Percentage (calculated for
this purpose only after taking into account distributions of principal on the
Mortgage Loans but prior to any distribution of the Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date) is equal to or greater than 43.30% and (ii) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero.

                  "Subordinate Certificates" : Collectively, the Mezzanine
Certificates, the Class B Certificates and the Class CE Certificates.

                  "Subsequent Recoveries": As of any Distribution Date, amounts
received during the related Prepayment Period by the Servicer, RMC or RMAE
specifically related to a defaulted Mortgage 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 Mortgage Loan, net
of any amount reimbursable to the Servicer, RMC or RMAE related to such Mortgage
Loan or REO Property.

                  "Sub-Servicer": Any Person with which a Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicers pursuant to Section 3.02 of this Agreement or the Servicing
Agreement, as applicable.

                                       53
<PAGE>

                  "Sub-Servicing Agreement": The written contract between the
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02 of this Agreement or Servicing
Agreement, as applicable.

                  "Substitution Shortfall Amount": As defined in Section 2.03.

                  "Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust REMICs under the REMIC Provisions, together
with any and all other information reports or returns that may be required to be
furnished to the Certificateholders or filed with the Internal Revenue Service
or any other governmental taxing authority under any applicable provisions of
federal, state or local tax laws.

                  "Telerate Page 3750": The display designated as page "3750" on
the Dow Jones Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).

                  "Termination Price": As defined in Section 10.01.

                  "Terminator":  As defined in Section 10.01.

                  "Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.

                  "Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.

                  "Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.

                  "Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if either (x) the Delinquency Percentage exceeds 34.00% of
the Credit Enhancement Percentage with respect to such Distribution Date or (y)
the aggregate amount of Realized Losses incurred since the Cut-off Date through
the last day of the related Due Period divided by the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date exceeds the applicable
percentages set forth below with respect to such Distribution Date:

              Distribution Date                     Percentage
              -----------------                     ----------
              January 2008 to December 2008         3.75%, plus 1/12 of 2.00%
                                                    for each month thereafter
              January 2009 to December 2009         5.75%, plus 1/12 of 1.75%
                                                    for each month thereafter
              January 2010 to December 2010         7.00%, plus 1/12 of 0.25%
                                                    for each month thereafter
              January 2011 and thereafter           7.25%

                  "Trust": ACE Securities Corp., Home Equity Loan Trust, Series
2004-RM2, the trust created hereunder.

                                       54
<PAGE>

                  "Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II and the Reserve Fund and any amounts on deposit therein and any
proceeds thereof and the Cap Contract.

                  "Trust REMIC": REMIC I or REMIC II.

                  "Trustee": HSBC Bank USA, National Association a national
banking association, or its successor in interest, or any successor trustee
appointed as herein provided.

                  "Uncertificated Balance": The amount of the REMIC I Regular
Interests outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Balance of
the REMIC I Regular Interest shall be reduced by all distributions of principal
made on such REMIC I Regular Interest on such Distribution Date pursuant to
Section 5.01 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 5.04 and the Uncertificated Balance of REMIC I Regular Interest I-LTZZ
shall be increased by interest deferrals as provided in Section 5.01(a)(1)(i).
The Uncertificated Balance of each REMIC I Regular Interest shall never be less
than zero.

                  "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. Uncertificated Interest in respect of the REMIC
I Regular Interests shall accrue on the basis of a 360-day year consisting of
twelve 30-day months. Uncertificated Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest, shall be reduced by an amount equal to
the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution Date to the extent not covered by payments pursuant to Section 3.22
or Section 4.18 of this Agreement or pursuant to the Servicing Agreement and (b)
the aggregate amount of any Relief Act Interest Shortfall, if any allocated, in
each case, to such REMIC I Regular Interest or REMIC I Regular Interest pursuant
to Section 1.02. In addition, Uncertificated Interest with respect to each
Distribution Date, as to any Uncertificated REMIC Regular Interest, shall be
reduced by Realized Losses, if any, allocated to such Uncertificated REMIC
Regular Interest pursuant to Section 1.02 and Section 5.04.

                  "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
3.11.

                  "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof
(except, in the case of a partnership, to the extent provided in regulations)
provided that, for purposes solely of the restrictions on the transfer of any
Class R Certificate, 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 required to be United States Persons, 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

                                       55
<PAGE>

the trust and one or more United States persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, 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
I of subchapter J of chapter I of the Code), and which was treated as a United
States person on August 20, 1996 may elect to continue to be treated as a United
States person notwithstanding the previous sentence. The term "United States"
shall have the meaning set forth in Section 7701 of the Code.

                  "Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the related Originator of the Mortgage Loan at the time of origination of the
Mortgage Loan by an appraiser who met the minimum requirements of Fannie Mae and
Freddie Mac and (b) the value thereof as determined by a review appraisal
conducted by the related Originator of the Mortgage Loan in accordance with the
related Originator's underwriting guidelines, and (ii) the purchase price paid
for the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan; provided, however, (A) in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the lesser of (1) the
value determined by an appraisal made for the related Originator of the Mortgage
Loan of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by an appraiser who met the minimum requirements of
Fannie Mae and Freddie Mac and (2) the value thereof as determined by a review
appraisal conducted by the related Originator of the Mortgage Loan in accordance
with the related Originator's underwriting guidelines, and (B) in the case of a
Mortgage Loan originated in connection with a "lease-option purchase," such
value of the Mortgaged Property is based on the lower of the value determined by
an appraisal made for the Originator of such Mortgage Loan at the time of
origination or the sale price of such Mortgaged Property if the "lease option
purchase price" was set less than 12 months prior to origination, and is based
on the value determined by an appraisal made for the related Originator of such
Mortgage Loan at the time of origination if the "lease option purchase price"
was set 12 months or more prior to origination.

                  "Verification Report":  As defined in Section 4.19.

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any such Certificate. With respect to any
date of determination, 98% of all Voting Rights will be allocated among the
holders of the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated among the holders of the Class P Certificates and 1% of all Voting
Rights will be allocated among the holders of the Class R Certificates. The
Voting Rights allocated to each Class of Certificate shall be allocated among
Holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date.

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

                  SECTION 1.02. Allocation of Certain Interest Shortfalls.

                  For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
CE Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by

                                       56
<PAGE>

payments by the Servicer pursuant to Section 3.22 of this Agreement or by the
Master Servicer pursuant to Section 4.18 of this Agreement or by RMC or RMAE
pursuant to the Servicing Agreement) and any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, to the Class CE Certificates, second, to the Class B-5
Certificates, third, to the Class B-4 Certificates, fourth, to the Class B-3
Certificates, fifth, to the Class B-2 Certificates, sixth, to the Class B-1
Certificates, seventh, to the Class M-7 Certificates, eighth, to the Class M-6
Certificates, ninth, to the Class M-5 Certificates, tenth, to the Class M-4
Certificates, eleventh, to the Class M-3 Certificates, twelfth, to the Class M-2
Certificates, thirteenth, to the Class M-1 Certificates and fourteenth, to the
Class A Certificates, and (2) the aggregate amount of any Realized Losses
allocated to the Class B Certificates, the Mezzanine Certificates and Net WAC
Rate Carryover Amounts paid to the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates incurred for any Distribution Date
shall be allocated to the Class CE Certificates on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance or Notional
Amount thereof, as applicable.

                  For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any PREPAYMENT Interest Shortfalls (to the extent not
covered by payments by the Servicer pursuant to Section 3.22 of this Agreement
or the Master Servicer pursuant to Section 4.18 or by RMC or RMAE pursuant to
the Servicing Agreement) and any Relief Act Interest Shortfalls incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated among
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest
I-LTB3, REMIC I Regular Interest I-LTB4, REMIC I Regular Interest I-LTB5 and
REMIC I Regular Interest I-LTZZ PRO RATA based on, and to the extent of, one
month's interest at the then applicable respective REMIC I Remittance Rate on
the respective Uncertificated Balance of each such REMIC I Regular Interest.

                                       57
<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;

                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01. Conveyance of the Mortgage Loans.

                  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 Mortgage Loans identified on the Mortgage Loan Schedule, the rights of
the Depositor under the Mortgage Loan Purchase Agreement (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. Such
assignment includes all interest and principal received by the Depositor, the
Servicer, RMC and RMAE on or with respect to the Mortgage Loans (other than
payments of principal and interest due on such Mortgage Loans on or before the
Cut-off Date). The Depositor herewith delivers to the Trustee and the Servicer
an executed copy of the Mortgage Loan Purchase Agreement.

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

                  In the event that any Assignment of Mortgage is not recorded
or is improperly recorded, the Servicer shall have no liability for its failure
to receive or act on notices related to such Assignments of Mortgage or
otherwise.

                  Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files, including,
but not limited to certain insurance policies and documents contemplated by
Section 4.11, and preparation and delivery of the certifications shall be
performed by the Custodian pursuant to the terms and conditions of the Custodial
Agreement.

                  The Depositor shall deliver or cause the related Originator to
deliver to the Servicer, RMC and RMAE copies of all trailing documents required
to be included in the Mortgage File at the same time the originals or certified
copies thereof are delivered to the Trustee or Custodian, such documents
including the mortgagee policy of title insurance and any Mortgage Loan
Documents upon return from the recording office. Neither the Servicer, RMC nor
RMAE shall be responsible for any custodian fees or other costs incurred in
obtaining such documents and the Depositor shall cause the Servicer, RMC and
RMAE to be reimbursed for any

                                       58
<PAGE>

such costs the Servicer, RMC or RMAE may incur in connection with performing its
obligations under this Agreement or the Servicing Agreement, as applicable.

                  The Mortgage Loans permitted by the terms of this Agreement to
be included in the Trust are limited to (i) Mortgage Loans (which the Depositor
acquired pursuant to the Mortgage Loan Purchase Agreement, which contains, among
other representations and warranties, a representation and warranty of the
Seller that no Mortgage Loan is a "High-Cost Home Loan" as defined in the New
Jersey Home Ownership Act effective November 27, 2003 or as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004) and (ii) Qualified
Substitute Mortgage Loans (which, by definition as set forth herein and referred
to in the Mortgage Loan Purchase Agreement, are required to conform to, among
other representations and warranties, the representation and warranty of the
Seller that no Qualified Substitute Mortgage Loan is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003 or as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004.
The Depositor and the Trustee on behalf of the Trust understand and agree that
it is not intended that any mortgage loan be included in the Trust that is a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003 or as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004.

                  SECTION 2.02. Acceptance of REMIC I by Trustee.

                  The Trustee acknowledges receipt, subject to the provisions of
Section 2.01 hereof and Section 2 of the Custodial Agreement, of the Mortgage
Loan Documents and all other assets included in the definition of "REMIC I"
under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into
the Distribution Account) 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 Mortgage 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 definition of "REMIC I" in trust for the exclusive use and benefit of all
present and future Certificateholders.

                  SECTION 2.03. Repurchase or Substitution of Mortgage 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 Mortgage Loan that materially
and adversely affects the value of such Mortgage Loan or the interest therein of
the Certificateholders, the Trustee shall promptly notify the Seller and the
Servicer of such defect, missing 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 Mortgage Loan from REMIC I 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
Mortgage Loan shall be remitted to the Servicer for deposit in the Collection
Account and the Trustee, upon receipt of written certification from the Servicer
of

                                       59
<PAGE>

such deposit, shall release or cause the Custodian (upon receipt of a request
for release in the form attached to the Custodial Agreement) 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 Mortgage 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 Mortgage Loan as provided above,
if so provided in the Mortgage Loan Purchase Agreement, the Seller may cause
such Mortgage Loan to be removed from REMIC I (in which case it shall become a
Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage
Loans in the manner and subject to the limitations set forth in Section 2.03(b).
It is understood and agreed that the obligation of the Seller to cure or to
repurchase (or to substitute for) any Mortgage 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.

                  The Trustee shall enforce the obligations of the Seller under
the Mortgage Loan Purchase Agreement to remedy any breach of the representation
or covenant of the Seller set forth in Section 5(xiv) of the Mortgage Loan
Purchase Agreement which materially and adversely affects the interests of the
Holders of the Class P Certificates in any Prepayment Charge.

(b) Any substitution of Qualified Substitute Mortgage Loans for Deleted Mortgage
Loans made pursuant to Section 2.03(a) must be effected prior to the date which
is two years after the Startup Day for REMIC I.

                  As to any Deleted Mortgage Loan for which the Seller
substitutes a Qualified Substitute Mortgage 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 Qualified Substitute Mortgage Loan or Loans, the
Mortgage Note, the Mortgage, 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 Qualified Substitute Mortgage
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 Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents and deliver to the Depositor, the Trustee and the
Servicer, with respect to such Qualified Substitute Mortgage 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 Servicer a final certification pursuant to the Custodial Agreement with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution are not part of REMIC I
and will be retained by the Seller. For the month of substitution, distributions
to Certificateholders will reflect the Monthly Payment due on such Deleted
Mortgage 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 Mortgage Loan. The Depositor shall give or cause to
be given written notice to the

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Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee and the Servicer. Upon such substitution, such Qualified
Substitute Mortgage 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
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (the "Substitution Shortfall Amount"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan,
the Scheduled Principal Balance thereof as of the date of substitution, together
with one month's interest on such Scheduled Principal Balance at the applicable
Net Mortgage Rate, plus all outstanding P&I Advances and Servicing Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances)
related thereto. On the date of such substitution, the Seller will deliver or
cause to be delivered to the Servicer, RMC or RMAE, as applicable, for deposit
in the Collection 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 Qualified Substitute Mortgage Loan or Loans, upon receipt of a
request for release in the form attached to the Custodial Agreement and
certification by the Servicer, RMC or RMAE, as applicable, of such deposit,
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 Mortgage 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 Trust
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 Trust 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 Servicer
or the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall repurchase or substitute one
or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan
within 90 days of the earlier of discovery or receipt of such notice with
respect to such affected Mortgage Loan. Such repurchase or substitution shall be
made by (i) the Seller if the affected Mortgage 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 Mortgage Loan's status as a non-qualified mortgage is
a breach of no representation or warranty. Any such repurchase or substitution
shall be made in the same manner as set forth in Section 2.03(a). The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same

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<PAGE>

terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.

                  (d) With respect to a breach of the representations made
pursuant to Section 5(xiv) of the Mortgage Loan Purchase Agreement that
materially and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Seller shall be required to take the
actions set forth in this Section 2.03.

                  (e) Within 90 days of the earlier of discovery by the Servicer
or receipt of notice by the Servicer of the breach of any representation,
warranty or covenant of the Servicer set forth in Section 2.05 which materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan or Prepayment Charge, the Servicer shall cure such breach in all material
respects.

                  SECTION 2.04. Representations and Warranties of the Master
Servicer.

                  The Master Servicer hereby represents, warrants and covenants
to the Servicer, the Depositor and the Trustee, for the benefit of each of the
Trustee and the Certificateholders, 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
         other parties hereto, 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

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<PAGE>

         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;

                           (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 2.04 shall survive the
resignation or termination of the parties hereto and the termination of this
Agreement and shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders.

                  SECTION 2.05. Representations, Warranties and Covenants of the
Servicer.

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

                           (i) The Servicer is a limited partnership duly
         formed, validly existing and in good standing as a limited partnership
         under the laws of the State of Delaware and is duly authorized and
         qualified to transact any and all business contemplated by this
         Agreement to be conducted by the Servicer in any state in which a
         Mortgaged Property is located or is otherwise not required under
         applicable law to effect such qualification and, in any event, is in
         compliance with the doing business laws of any such State, to the
         extent necessary to ensure its ability to enforce each Litton Mortgage
         Loan and to service the Litton Mortgage Loans in accordance with the
         terms of this Agreement;

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<PAGE>

                           (ii) The 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 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 other parties hereto,
         constitutes a legal, valid and binding obligation of the 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 Servicer, the servicing of the Litton Mortgage Loans by the
         Servicer hereunder, the consummation by the 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 Servicer and will not (A) result in a breach of any term or
         provision of the limited partnership agreement of the 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 Servicer is a party or by which it may be
         bound, or any statute, order or regulation applicable to the Servicer
         of any court, regulatory body, administrative agency or governmental
         body having jurisdiction over the Servicer; and the 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 Servicer's knowledge, would
         in the future materially and adversely affect, (x) the ability of the
         Servicer to perform its obligations under this Agreement, (y) the
         business, operations, financial condition, properties or assets of the
         Servicer taken as a whole or (z) the legality, validity or
         enforceability of this Agreement;

                           (iv) The 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;

                           (v) No litigation is pending against the Servicer
         that would materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of the Servicer to
         service the Litton Mortgage Loans or 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 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 Servicer of
         its obligations under, or the validity or enforceability of, this
         Agreement;

                           (vii) No consent, approval, authorization or order of
         any court or governmental agency or body is required for the execution,
         delivery and performance by

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<PAGE>

         the Servicer of, or compliance by the 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;

                           (viii) The Servicer has fully furnished and will
         continue to fully furnish, in accordance with the Fair Credit Reporting
         Act and its implementing regulations, accurate and complete information
         (e.g., favorable and unfavorable) on its borrower credit files to
         Equifax, Experian and Trans Union Credit Information Company or their
         successors on a monthly basis; and

                           (ix) The Servicer will not waive any Prepayment
         Charge other than in accordance with the standard set forth in Section
         3.01.

                  Notwithstanding anything to the contrary contained in this
Agreement, if the covenant of the Servicer set forth in Section 2.05(ix) above
is breached, the Servicer will pay the amount of such waived Prepayment Charge,
from its own funds without any right of reimbursement, for the benefit of the
Holders of the Class P Certificates, by depositing such amount into the
Collection Account within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of such breach. Furthermore, notwithstanding
any other provisions of this Agreement, any payments made by the Servicer in
respect of any waived Prepayment Charges pursuant to this paragraph shall be
deemed to be paid outside of the Trust Fund.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive the
resignation or termination of the parties hereto, the termination of this
Agreement and the delivery of the Mortgage Files to the Custodian and shall
inure to the benefit of the Trustee, the Master Servicer, the Securities
Administrator, the Depositor and the Certificateholders. Upon discovery by any
such Person or the Servicer of a breach of any of the foregoing representations,
warranties and covenants which materially and adversely affects the value of any
Mortgage Loan, Prepayment Charge or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trustee. Subject to Section 8.01, unless such breach shall not be
susceptible of cure within 90 days, the obligation of the Servicer set forth in
Section 2.03(e) to cure breaches shall constitute the sole remedy against the
Servicer available to the Certificateholders, the Depositor or the Trustee on
behalf of the Certificateholders respecting a breach of the representations,
warranties and covenants contained in this Section 2.05.

                  SECTION 2.06. Issuance of the REMIC I Regular Interests and
the Class R-I Interest.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to the Custodian on its behalf of the Mortgage Loan
Documents, subject to the provisions of Section 2.01 and Section 2.02 hereof and
Section 2 of the Custodial Agreement, together with the assignment to it of all
other assets included in REMIC I, the receipt of which is hereby acknowledged.
The interests evidenced by the Class R-I Interest, together with the REMIC I
Regular Interests, constitute the entire beneficial ownership interest in REMIC
I. The rights of the Holders of the Class R-I Interest and REMIC I (as holder of
the REMIC I Regular

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<PAGE>

Interests) to receive distributions from the proceeds of REMIC I in respect of
the Class R-I Interest and the REMIC I Regular Interests, respectively, and all
ownership interests evidenced or constituted by the Class R-I Interest and the
REMIC I Regular Interests, shall be as set forth in this Agreement.

                  SECTION 2.07. Conveyance of the REMIC I Regular Interests;
Acceptance of REMIC I by the Trustee.

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

                  SECTION 2.08. Issuance of Residual Certificates.

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

                  SECTION 2.09. 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 "ACE Securities Corp., Home Equity Loan
Trust, Series 2004-RM2" and does hereby appoint HSBC Bank USA, National
Association as Trustee in accordance with the provisions of this Agreement.

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<PAGE>

                                  ARTICLE III

                          ADMINISTRATION AND SERVICING
                     OF THE LITTON MORTGAGE LOANS; ACCOUNTS

                  SECTION 3.01. The Servicer to Act as a Servicer.

                  From and after the Closing Date to the related Servicing
Transfer Date, the RMC Mortgage Loans and RMAE Mortgage Loans will be serviced
and administered by RMC and RMAE, respectively, pursuant to the Servicing
Agreement, and the Servicer will have no responsibility to service or administer
the RMC Mortgage Loans or the RMAE Mortgage Loans or have any other obligation
with respect to the RMC Mortgage Loans or the RMAE Mortgage Loans (including
reporting or remitting funds to the Trustee) during that period. In addition,
all liabilities of RMC and RMAE incurred prior to the Servicing Transfer Date
shall remain with RMC and RMAE. On and after the Closing Date or the related
Servicing Transfer Date (if applicable), the Servicer shall service and
administer the Litton Mortgage Loans on behalf of the Trust Fund and in the best
interests of and for the benefit of the Certificateholders (as determined by the
Servicer in its reasonable judgment) in accordance with the terms of this
Agreement and the respective Litton Mortgage Loans and all applicable law and
regulations and, to the extent consistent with such terms, in the same manner in
which it services and administers similar mortgage loans for its own portfolio,
giving due consideration to customary and usual standards of practice of prudent
mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:

                           (i) any relationship that the Servicer or any
         Affiliate of the Servicer may have with the related Mortgagor;

                           (ii) the ownership of any Certificate by the Servicer
         or any Affiliate of the Servicer;

                           (iii) the Servicer's obligation to make P&I Advances
         or Servicing Advances; or

                           (iv) the Servicer's right to receive compensation for
         its services hereunder.

                  Notwithstanding anything to the contrary contained in this
Agreement, the Servicer shall have no obligations with respect to any Mortgage
Loans subject to this Agreement until from and after the related Servicing
Transfer Date. The reporting and remitting obligations of the Servicer with
respect to the Mortgage Loans commence one month after the related Servicing
Transfer Date. The Servicer shall not be liable for any actions or inactions of
RMC, RMAE or any other prior servicer of a Mortgage Loan prior to the related
Servicing Transfer Date, nor shall any action or inaction by RMC, RMAE or any
other prior servicer be deemed a Servicer Event of Default. In addition, all
liabilities of RMC and RMAE incurred prior to the Servicing Transfer Date shall
remain with RMC and RMAE.

                  To the extent consistent with the foregoing, the Servicer
shall also seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes related to the Litton Mortgage Loans. Subject
only to the above-described servicing standards

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<PAGE>

(the "Accepted Servicing Practices") and the terms of this Agreement and of the
respective Litton Mortgage Loans, the Servicer shall have full power and
authority, to do or cause to be done any and all things in connection with such
servicing and administration which it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Servicer in its own name is hereby
authorized and empowered by the Trustee when the Servicer believes it
appropriate in its best judgment, to execute and deliver, on behalf of the Trust
Fund, the Certificateholders and the Trustee or any of them, and upon written
notice to the Trustee, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge or subordination, and all other
comparable instruments, with respect to the Litton Mortgage Loans and the
related Mortgaged Properties and to institute foreclosure proceedings or obtain
a deed-in-lieu of foreclosure so as to convert the ownership of such properties,
and to hold or cause to be held title to such properties, on behalf of the
Trustee, for the benefit of the Trust Fund and the Certificateholders. The
Servicer shall service and administer the Litton Mortgage Loans in accordance
with applicable state and federal law and shall provide to the Mortgagors any
reports required to be provided to them thereby. The Servicer shall also comply
in the performance of this Agreement with all reasonable rules and requirements
of each insurer under any standard hazard insurance policy. Subject to Section
3.14, the Trustee shall execute, at the written request of the Servicer, and
furnish to the Servicer a power of attorney in the form of Exhibit D hereto and
other documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder and furnished to the Trustee by
the Servicer, and the Trustee shall not be liable for the actions of the
Servicer under such powers of attorney and shall be indemnified by the Servicer
for any cost, liability or expense incurred by the Trustee in connection with
the Servicer's use or misuse of any such power of attorney.

                  In accordance with Accepted Servicing Practices, the Servicer
shall make or cause to be made Servicing Advances as necessary for the purpose
of effecting the payment of taxes and assessments on the Mortgaged Properties
related to the Litton Mortgage Loans, which Servicing Advances shall be
reimbursable in the first instance from related collections from the related
Mortgagors pursuant to Section 3.07, and further as provided in Section 3.09;
provided, however, the Servicer shall only make such Servicing Advance if the
related Mortgagor has not made such payment and if the failure to make such
Servicing Advance would result in the loss of the related Mortgaged Property due
to a tax sale or foreclosure as result of a tax lien. Any cost incurred by the
Servicer in effecting the payment of taxes and assessments on a Mortgaged
Property related to a Litton Mortgage Loan shall not, for the purpose of
calculating the Stated Principal Balance of such Litton Mortgage Loan or
distributions to Certificateholders, be added to the unpaid principal balance of
the related Litton Mortgage Loan, notwithstanding that the terms of such Litton
Mortgage Loan so permit.

                  The Servicer further is authorized and empowered by the
Trustee, on behalf of the Certificateholders and the Trustee, in its own name or
in the name of the Sub-Servicer, when the Servicer or the Sub-Servicer, as the
case may be, believes it is appropriate in its best judgment to register any
Litton Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Litton Mortgage Loan on the MERS(R) System, to execute and
deliver, on behalf of the Trustee and the Certificateholders or any of them, any
and all instruments of assignment and other comparable instruments with respect
to such assignment or re-recording of a Mortgage in the name of MERS, solely as
nominee for the Trustee and its successors and assigns. Any reasonable expenses
incurred in connection with the actions described in the preceding sentence or
as a result of MERS discontinuing or becoming unable to continue

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<PAGE>

operations in connection with the MERS(R) System, shall be subject to withdrawal
by the Servicer from the Collection Account.

                  Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Litton Mortgage
Loan and the Servicer shall not permit any modification with respect to any
related Litton Mortgage Loan that would change the Mortgage Rate, reduce or
increase the principal balance (except for reductions resulting from actual
payments of principal) or change the final maturity date on such related Litton
Mortgage Loan (unless, as provided in Section 3.06, the related Mortgagor is in
default with respect to the related Litton Mortgage Loan or such default is, in
the judgment of the Servicer, reasonably foreseeable) or any modification,
waiver or amendment of any term of any Litton Mortgage Loan that would both (A)
effect an exchange or reissuance of such Litton Mortgage Loan under Section 1001
of the Code (or final, temporary or proposed Treasury regulations promulgated
thereunder) and (B) cause any Trust REMIC created hereunder to fail to qualify
as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions after the startup date" under the REMIC
Provisions.

                  In the event that the Mortgage Loan Documents relating to any
Litton Mortgage Loan contain provisions requiring the related Mortgagor to
arbitrate disputes (at the option of the Trustee, on behalf of the Trust), the
Trustee hereby authorizes the Servicer to waive the Trustee's right or option to
arbitrate disputes and to send written notice of such waiver to the Mortgagor,
although the Mortgagor may still require arbitration at its option.

                  From and after the Servicing Transfer Date, the Servicer will
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans Union
Credit Information Company or their successors on a monthly basis.

                  Notwithstanding anything in this Agreement to the contrary, in
the event of a Principal Prepayment in full of a Mortgage Loan, the Servicer may
not waive any Prepayment Charge or portion thereof required by the terms of the
related Mortgage Note unless (i) the related Mortgage Loan is in default or
foreseeable default and such waiver (a) is standard and customary in servicing
mortgage loans similar to the Mortgage Loans and (b) the Servicer determines
that such waiver would maximize recovery of Liquidation Proceeds for such
Mortgage Loan, taking into account the value of such Prepayment Charge, (ii) (A)
the enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium,
receivership, or other similar law relating to creditors' rights generally or
(2) due to acceleration in connection with a foreclosure or other involuntary
payment, or (B) the enforceability is otherwise limited or prohibited by
applicable law or (iii) the Servicer has not been provided with information
sufficient to enable it to collect the Prepayment Charge. If a Prepayment Charge
is waived as permitted by meeting the standard described in clause (iii) above,
then the Servicer shall enforce the obligation of the Seller to pay the amount
of such waived Prepayment Charge to the Servicer for deposit in the Collection
Account (to the extent paid by the Seller) for the benefit of the Holders of the
Class P Certificates.

                  Promptly upon the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of the covenant of the Servicer
set forth above which materially and adversely affects the interests of the
Holders of the Class P Certificates in any Prepayment

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Charge, the Servicer shall promptly pay the amount of such waived Prepayment
Charge (or such portion thereof as had been waived), (the "Servicer Prepayment
Charge Payment Amount") for the benefit of the holders of the Class P
Certificates by depositing such amount into the Collection Account for
distribution in accordance with the terms of this Agreement. The foregoing shall
not, however, limit any remedies available to the Certificateholders, the
Depositor or the Trustee on behalf of the Trust Fund and for the benefit of the
Certificateholders, pursuant to the Mortgage Loan Purchase Agreement, respecting
a breach of the representations, warranties and covenants of the Seller
contained in the Mortgage Loan Purchase Agreement.

                  The Trustee, for the benefit of the Certificateholders, shall
enforce the obligations of the Seller under the Mortgage Loan Purchase
Agreement, including, without limitation, any obligation of the Seller to
purchase a Mortgage Loan on account of missing or defective documentation or on
account of a breach of a representation, warranty or covenant, as described in
Section 2.03(a).

                  If reasonably requested by the Servicer, the Trustee shall
furnish the Servicer with a Power of Attorney in the form attached hereto as
Exhibit D.

                  SECTION 3.02. Sub-Servicing Agreements Between the Servicer
and Sub-Servicers.

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

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

                  SECTION 3.03. Successor Sub-Servicers.

                  Any Sub-Servicing Agreement shall provide that the Servicer
shall be entitled to terminate any Sub-Servicing Agreement and to either itself
directly service the related Litton Mortgage Loans or enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which

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qualifies under Section 3.02. Any Sub-Servicing Agreement shall include the
provision that such agreement may be immediately terminated by any successor to
the Servicer (which may be the Trustee or the Master Servicer) without fee, in
accordance with the terms of this Agreement, in the event that the Servicer (or
any successor to the Servicer) shall, for any reason, no longer be the Servicer
of the Litton Mortgage Loans (including termination due to a Servicer Event of
Default).

                  SECTION 3.04. No Contractual Relationship Between
Sub-Servicer, Trustee or the Certificateholders.

                  Any Sub-Servicing Agreement and any other transactions or
services relating to the Litton Mortgage Loans involving a Sub-Servicer shall be
deemed to be between the Sub-Servicer and the Servicer alone and the Master
Servicer, Trustee and the Certificateholders shall not be deemed parties thereto
and shall have no claims, rights, obligations, duties or liabilities with
respect to any Sub-Servicer except as set forth in Section 3.05.

                  SECTION 3.05. Assumption or Termination of Sub-Servicing
Agreement by Successor Servicer.

                  In connection with the assumption of the responsibilities,
duties and liabilities and of the authority, power and rights of the Servicer
hereunder by a successor Servicer (which may be the Trustee or the Master
Servicer) pursuant to Section 8.02, it is understood and agreed that the
Servicer's rights and obligations under any Sub-Servicing Agreement then in
force between the Servicer and a Sub-Servicer shall be assumed simultaneously by
such successor Servicer without act or deed on the part of such successor
Servicer; provided, however, that any successor Servicer may terminate the
Sub-Servicer.

                  The Servicer shall, upon the reasonable request of the Master
Servicer, but at its own expense, deliver to the assuming party documents and
records relating to each Sub-Servicing Agreement and an accounting of amounts
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements to the assuming
party.

                  The Servicing Fee payable to any such successor Servicer shall
be payable from payments received on the Litton Mortgage Loans in the amount and
in the manner set forth in this Agreement.

                  SECTION 3.06. Collection of Certain Mortgage Loan Payments.

                  The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Litton Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and Accepted Servicing Practices, follow such collection procedures as it would
follow with respect to mortgage loans comparable to the Litton Mortgage Loans
and held for its own account. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge or, if applicable, penalty
interest or (ii) extend the due dates for the Monthly Payments due on a Mortgage
Note related to a Litton Mortgage Loan for a period of not greater than 180
days; provided that any extension pursuant to this clause shall not affect the
amortization schedule of any Litton Mortgage Loan for purposes of any
computation hereunder. Notwithstanding the foregoing, in the event that any
Litton Mortgage

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Loan is in default or, in the judgment of the Servicer, such default is
reasonably foreseeable, the Servicer, consistent with Accepted Servicing
Practices may waive, modify or vary any term of such Litton Mortgage Loan
(including modifications that change the Mortgage Rate, forgive the payment of
principal or interest or extend the final maturity date of such Litton Mortgage
Loan), accept payment from the related Mortgagor of an amount less than the
Stated Principal Balance in final satisfaction of such Litton Mortgage Loan, or
consent to the postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor if in the Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Certificateholders (taking into account any estimated
Realized Loss that might result absent such action).

                  SECTION 3.07. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.

                  To the extent the terms of a Mortgage related to a Litton
Mortgage Loan provide for Escrow Payments, the Servicer shall establish and
maintain one or more accounts (the "Servicing Accounts"), into which all
collections from the Mortgagors (or related advances from Sub-Servicers) for the
payment of taxes, assessments, fire, flood, and hazard insurance premiums, and
comparable items for the account of the Mortgagors ("Escrow Payments") shall be
deposited and retained. Servicing Accounts shall be Eligible Accounts. The
Servicer shall deposit in the Servicing Accounts on a daily basis and in no
event later than the second Business Day after receipt, and retain therein, all
Escrow Payments collected on account of the Litton Mortgage Loans, for the
purpose of effecting the timely payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from a Servicing Account may be
made only to (i) effect timely payment of taxes, assessments, fire, flood, and
hazard insurance premiums, and comparable items; (ii) reimburse itself out of
related collections for any Servicing Advances made pursuant to Section 3.01
(with respect to taxes and assessments) and Section 3.11 (with respect to fire,
flood and hazard insurance); (iii) refund to Mortgagors any sums as may be
determined to be overages; (iv) pay interest, if required and as described
below, to Mortgagors on balances in the Servicing Account; or (v) clear and
terminate the Servicing Account at the termination of the Servicer's obligations
and responsibilities in respect of the Litton Mortgage Loans under this
Agreement in accordance with Article X. As part of its servicing duties, the
Servicer shall pay to the Mortgagors interest on funds in Servicing Accounts, to
the extent required by law and, to the extent that interest earned on funds in
the Servicing Accounts is insufficient, to pay such interest from its or their
own funds, without any reimbursement therefor. Notwithstanding the foregoing,
the Servicer shall not be obligated to collect Escrow Payments if the related
Litton Mortgage Loan does not require such payments but the Servicer shall
nevertheless be obligated to make Servicing Advances as provided in Section 3.01
and Section 3.11. In the event the Servicer shall deposit in the Servicing
Accounts any amount not required to be deposited therein, it may at any time
withdraw such amount from the Servicing Accounts, any provision to the contrary
notwithstanding.

                  To the extent that a Mortgage related to a Litton Mortgage
Loan does not provide for Escrow Payments, the Servicer (i) shall determine
whether any such payments are made by the Mortgagor in a manner and at a time
that is necessary to avoid the loss of the Mortgaged Property due to a tax sale
or the foreclosure as a result of a tax lien and (ii) shall ensure that all
insurance required to be maintained on the Mortgaged Property pursuant to this
Agreement is maintained. If any such payment has not been made and the Servicer
receives notice of a tax lien

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<PAGE>

with respect to the Litton Mortgage Loan being imposed, the Servicer shall,
promptly and to the extent required to avoid loss of the Mortgaged Property,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property unless the Servicer determines the advance to be
nonrecoverable. The Servicer assumes full responsibility for the payment of all
such bills and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make Servicing Advances to effect such payments
subject to its determination of recoverability.

                  SECTION 3.08. Collection Account and Distribution Account.

                  (a) On behalf of the Trust Fund, the Servicer shall establish
and maintain one or more "Collection Accounts", held in trust for the benefit of
the Trustee and the Certificateholders. On behalf of the Trust Fund, the
Servicer shall deposit or cause to be deposited in the Collection Account on a
daily basis and, in no event later than two Business Days after receipt, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it on or subsequent to the Cut-off Date other
than amounts attributable to a Due Date on or prior to the Cut-off Date:

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

                           (ii) all payments on account of interest (net of the
         related Servicing Fee) on each Litton Mortgage Loan;

                           (iii) all Insurance Proceeds and Liquidation Proceeds
         (other than proceeds collected in respect of any particular REO
         Property and all Subsequent Recoveries with respect to the Litton
         Mortgage Loans and amounts paid by the Servicer in connection with a
         purchase of Mortgage Loans pursuant to Section 9.01);

                           (iv) any amounts required to be deposited by the
         Servicer pursuant to Section 3.10 in connection with any losses
         realized on Permitted Investments with respect to funds held in the
         Collection Account;

                           (v) any amounts required to be deposited by the
         Servicer pursuant to the second paragraph of Section 3.11(a) in respect
         of any blanket policy deductibles;

                           (vi) any Purchase Price or Substitution Shortfall
         Amount delivered to the Servicer and all proceeds (net of amounts
         payable or reimbursable to the Servicer, the Master Servicer, the
         Trustee, the Custodian or the Securities Administrator) of Litton
         Mortgage Loans purchased in accordance with Section 2.03, Section 3.13
         or Section 10.01 or pursuant to any other provision of this Agreement;
         and

                           (vii) any Prepayment Charges collected by the
         Servicer in connection with the Principal Prepayment of any of the
         Litton Mortgage Loans or amounts required to be deposited by the
         Servicer in connection with a breach of its obligations under Section
         3.01 with respect to the waiver of Prepayment Charges or any amounts
         paid by the Seller in respect of any waived Prepayment Charges as
         described in Section 3.01.

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<PAGE>

                  The foregoing requirements for deposit in the Collection
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, assumption fees or other similar fees need not be deposited by the
Servicer in the Collection Account. In the event the Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.

                  (b) On behalf of the Trust Fund, the Securities Administrator
shall establish and maintain one or more accounts (such account or accounts, the
"Distribution Account"), held in trust for the benefit of the Trustee, the Trust
Fund and the Certificateholders. On behalf of the Trust Fund, the Servicer shall
deliver to the Securities Administrator in immediately available funds for
deposit in the Distribution Account on or before 3:00 p.m. New York time on the
Servicer Remittance Date, that portion of the Available Distribution Amount
(calculated without regard to the references in clause (2) of the definition
thereof to amounts that may be withdrawn from the Distribution Account) for the
related Distribution Date then on deposit in the Collection Account and the
amount of all Prepayment Charges collected by the Servicer in connection with
the Principal Prepayment of any of the Litton Mortgage Loans (including any
Servicer Prepayment Charge Amount) then on deposit in the Collection Account
relating to the Litton Mortgage Loans and the amount of any funds reimbursable
to an Advance Financing Person pursuant to Section 3.25. If the balance on
deposit in the Collection Account exceeds $100,000 as of the commencement of
business on any Business Day and the Collection Account constitutes an Eligible
Account solely pursuant to clause (ii) of the definition of "Eligible Account,"
the Servicer shall, on or before 5:00 p.m. New York time on such Business Day,
withdraw from the Collection Account any and all amounts payable or reimbursable
to the Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator or the Seller pursuant to Section 3.09 and shall pay such amounts
to the Persons entitled thereto.

                  With respect to any remittance received by the Securities
Administrator on or after the first Business Day following the Business Day on
which such payment was due, the Securities Administrator shall send written
notice thereof to the Servicer. The Servicer shall pay to the Securities
Administrator interest on any such late payment by the Servicer at an annual
rate equal to Prime Rate (as defined in The Wall Street Journal) plus one
percentage point, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be paid by the Servicer to the Securities
Administrator on the date such late payment is made and shall cover the period
commencing with the day following such first Business Day and ending with the
Business Day on which such payment is made, both inclusive. The payment by the
Servicer of any such interest, or the failure of the Securities Administrator to
notify the Servicer of such interest, shall not be deemed an extension of time
for payment or a waiver of any Event of Default by the Servicer.

                  (c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.10. The Servicer shall give notice to the
Trustee, the Securities Administrator and the Master Servicer of the location of
the Collection Account maintained by it when established and prior to any change
thereof. The Securities Administrator shall give notice to the Servicer and the
Depositor of the location of the Distribution Account when established and prior
to any change thereof.

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<PAGE>

                  (d) Funds held in the Collection Account at any time may be
delivered by the Servicer in immediately available funds to the Securities
Administrator for deposit in the Distribution Account. In the event the Servicer
shall deliver to the Securities Administrator for deposit in the Distribution
Account any amount not required to be deposited therein, it may at any time
request that the Securities Administrator withdraw such amount from the
Distribution Account and remit to it any such amount, any provision herein to
the contrary notwithstanding. In no event shall the Securities Administrator
incur liability as a result of withdrawals from the Distribution Account at the
direction of the Servicer in accordance with the immediately preceding sentence.
In addition, the Servicer shall deliver to the Securities Administrator no later
than the Servicer Remittance Date the amounts set forth in clauses (i) through
(iv) below:

                           (i) any P&I Advances, as required pursuant to Section
         5.03;

                           (ii) any amounts required to be deposited pursuant to
         Section 3.21(d) or 3.21(f) in connection with any REO Property related
         to a Litton Mortgage Loan;

                           (iii) any amounts to be paid in connection with a
         purchase of Litton Mortgage Loans and REO Properties pursuant to
         Section 10.01; and

                           (iv) any amounts required to be deposited pursuant to
         Section 3.22 in connection with any Prepayment Interest Shortfalls with
         respect to a Litton Mortgage Loan.

                           SECTION 3.09. Withdrawals from the Collection Account
         and Distribution Account.

                  (a) The Servicer shall, from time to time, make withdrawals
from the Collection Account for any of the following purposes or as described in
Section 5.03:

                           (i) to remit to the Securities Administrator for
         deposit in the Distribution Account the amounts required to be so
         remitted pursuant to Section 3.08(b) or permitted to be so remitted
         pursuant to the first sentence of Section 3.08(d);

                           (ii) subject to Section 3.13(d), to reimburse itself
         (including any successor Servicer) for P&I Advances made by it, but
         only to the extent of amounts received which represent Late Collections
         (net of the related Servicing Fees) of Monthly Payments on related
         Litton Mortgage Loans with respect to which such P&I Advances were made
         in accordance with the provisions of Section 5.03;

                           (iii) subject to Section 3.13(d), to pay itself any
         unpaid Servicing Fees and reimburse itself any unreimbursed Servicing
         Advances with respect to each Litton Mortgage Loan, but only to the
         extent of any Liquidation Proceeds and Insurance Proceeds received with
         respect to such related Litton Mortgage Loan;

                           (iv) to pay to itself as servicing compensation (in
         addition to the Servicing Fee) on the Servicer Remittance Date any
         interest or investment income earned on funds deposited in the
         Collection Account;

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<PAGE>

                           (v) to pay to itself or the Seller, as the case may
         be, with respect to each related Litton Mortgage Loan that has
         previously been purchased or replaced pursuant to Section 2.03 or
         Section 3.13(c) all amounts received thereon not included in the
         Purchase Price or the Substitution Shortfall Amount;

                           (vi) to reimburse itself (including any successor to
         the Servicer) for any P&I Advance or Servicing Advance previously made
         by it which the Servicer has determined to be a Nonrecoverable P&I
         Advance or a Nonrecoverable Servicing Advance in accordance with the
         provisions of Section 5.03; or

                           (vii) to reimburse itself or the Depositor for
         expenses incurred by or reimbursable to itself or the Depositor, as the
         case may be, pursuant to Section 3.01 or Section 7.03;

                           (viii) to reimburse itself or the Trustee, as the
         case may be, for expenses reasonably incurred in respect of the breach
         or defect giving rise to the purchase obligation under Section 2.03 of
         this Agreement that were included in the Purchase Price of the related
         Litton Mortgage Loan, including any expenses arising out of the
         enforcement of the purchase obligation;

                           (ix) to pay, or to reimburse itself for advances in
         respect of, expenses incurred in connection with any Litton Mortgage
         Loan pursuant to Section 3.13(b); and

                           (x) to clear and terminate the Collection Account
         pursuant to Section 10.01.

                  The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (v), (vi), (vii), (viii) and (ix) above.
The Servicer shall provide written notification to the Trustee on or prior to
the next succeeding Servicer Remittance Date, upon making any withdrawals from
the Collection Account pursuant to subclauses (vi) and (vii) above.

                  (b) The Securities Administrator shall, from time to time,
make withdrawals from the Distribution Account, for any of the following
purposes, without priority: (i) to make distributions to Certificateholders in
accordance with Section 5.01;

                           (ii) to pay to itself, the Custodian and the Master
         Servicer amounts to which it is entitled pursuant to Section 9.05 or
         any other provision of this Agreement and any Extraordinary Trust Fund
         Expenses;

                           (iii) to reimburse itself or the Master Servicer
         pursuant to Section 8.02;

                           (iv) to pay to an Advance Financing Person
         reimbursements for P&I Advances and/or Servicing Advances pursuant to
         Section 3.25;

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<PAGE>

                           (v) to pay any amounts in respect of taxes pursuant
         to Section 11.01(g)(v);

                           (vi) to pay the Master Servicing Fee to the Master
         Servicer; and

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

                  SECTION 3.10. Investment of Funds in the Investment Accounts.

                  (a) The Servicer may direct, by means of written directions
(which may be standing directions), any depository institution maintaining the
Collection Account to invest the funds in such Collection Account (for purposes
of this Section 3.10, an "Investment 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 is the obligor
thereon, 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 is the obligor on such Permitted Investment. Amounts in the
Distribution Account may be invested in Permitted Investments as directed in
writing by the Master Servicer 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 is the obligor thereon, 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 is the
obligor thereon. All such Permitted Investments shall be held to maturity,
unless payable on demand. Any investment of funds shall be made in the name of
the Trustee (in its capacity as such) or in the name of a nominee of the
Trustee. The Securities Administrator shall be entitled to sole possession over
each such investment in the Distribution Account and, subject to subsection (b)
below, the income thereon, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Securities Administrator
or its agent, together with any document of transfer necessary to transfer title
to such investment to the Trustee or its nominee. In the event amounts on
deposit in the Collection Account are at any time invested in a Permitted
Investment payable on demand, the party with investment discretion over such
Investment Account shall:

                  (x) consistent with any notice required to be given
                  thereunder, demand that payment thereon be made on the last
                  day such Permitted Investment may otherwise mature hereunder
                  in an amount equal to the lesser of (1) all amounts then
                  payable thereunder and (2) the amount required to be withdrawn
                  on such date; and

                  (y) demand payment of all amounts due thereunder promptly upon
                  receipt by such party of written notice from the Servicer that
                  such Permitted Investment would not constitute a Permitted
                  Investment in respect of funds thereafter on deposit in the
                  Investment Account.

                  (b) All income and gain realized from the investment of funds
deposited in the Collection Account, shall be for the benefit of the Servicer
and shall be subject to its withdrawal

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in accordance with Section 3.09. The Servicer shall deposit in the Collection
Account the amount of any loss incurred in respect of any such Permitted
Investment made with funds in such account immediately upon realization of such
loss. All earnings and gain realized from the investment of funds deposited in
the Distribution Account shall be for the benefit of the Master Servicer. The
Master Servicer shall remit from its own funds for deposit into the Distribution
Account the amount of any loss incurred on Permitted Investments in the
Distribution Account.

                  (c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 9.01 and Section
9.02(a)(v), shall, at the written direction of the Servicer, take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.

                  (d) The Trustee, the Master Servicer or their respective
Affiliates are permitted to receive additional compensation that could be deemed
to be in the Trustee's or the Master Servicer's economic self-interest for (i)
serving as investment adviser, administrator, shareholder servicing agent,
custodian or sub-custodian with respect to certain of the Permitted Investments,
(ii) using Affiliates to effect transactions in certain Permitted Investments
and (iii) effecting transactions in certain Permitted Investments. Such
compensation shall not be considered an amount that is reimbursable or payable
to the Trustee or the Master Servicer pursuant to Section 3.09 or 3.10 or
otherwise payable in respect of Extraordinary Trust Fund Expenses. Such
additional compensation shall not be an expense of the Trust Fund.

                  SECTION 3.11. Maintenance of Hazard Insurance, Errors and
Omissions and Fidelity Coverage and Primary Mortgage Insurance.

                  (a) The terms of each Mortgage Note require the related
Mortgagor to maintain fire, flood and hazard insurance policies. To the extent
such policies are not maintained, the Servicer shall cause to be maintained for
each Mortgaged Property that is related to a Litton Mortgage Loan fire and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount which is at least equal to the lesser
of the current principal balance of such Litton Mortgage Loan and the amount
necessary to compensate fully for any damage or loss to the improvements which
are a part of such property on a replacement cost basis, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The
Servicer shall also cause to be maintained fire and hazard insurance on each REO
Property with extended coverage as is customary in the area where the Mortgaged
Property is located in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Litton
Mortgage Loan at the time it became an REO Property. The Servicer will comply in
the performance of this Agreement with all reasonable rules and requirements of
each insurer under any such hazard policies. Any amounts to be collected by the
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with Accepted Servicing Practices,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.09, if received in respect of a Mortgage Loan, or in the REO Account,
subject to

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<PAGE>

withdrawal pursuant to Section 3.21, if received in respect of an REO Property.
Any cost incurred by the Servicer in maintaining any such insurance shall not,
for the purpose of calculating distributions to Certificateholders, be added to
the unpaid principal balance of the related Litton Mortgage Loan,
notwithstanding that the terms of such Litton Mortgage Loan so permit. It is
understood and agreed that no earthquake or other additional insurance is to be
required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, the Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Litton Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).

                  In the event that the Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of B:VI or better
in Best's Key Rating Guide or otherwise acceptable to Fannie Mae or Freddie Mac
insuring against hazard losses on all of the Litton Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations to cause fire and
hazard insurance to be maintained on the Mortgaged Properties, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property or REO Property a policy complying with the
first two sentences of this Section 3.11, and there shall have been one or more
losses which would have been covered by such policy, deposit to the Collection
Account from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as
administrator and servicer of the Litton Mortgage Loans, the Servicer agrees to
prepare and present, on behalf of itself, the Trustee, the Trust Fund, the
Certificateholders, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy.

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

                  (c) The Servicer shall not take any action that would result
in noncoverage under any applicable primary mortgage insurance policy of any
loss which, but for the actions of the Servicer would have been covered
thereunder. The Servicer shall use its best efforts to keep in force and effect
any applicable primary mortgage insurance policy and, to the extent that the

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related Litton Mortgage Loan requires the Mortgagor to maintain such insurance,
any other primary mortgage insurance applicable to any Litton Mortgage Loan.
Except as required by applicable law or the related Mortgage Loan Documents, the
Servicer shall not cancel or refuse to renew any such primary mortgage insurance
policy that is in effect at the date of the initial issuance of the related
Mortgage Note and is required to be kept in force hereunder.

                  The Servicer agrees to present on behalf of the Trustee and
the Certificateholders claims to the applicable 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 Litton Mortgage Loans. Pursuant to Section 3.08,
any amounts collected by the Servicer under any primary mortgage insurance
policies shall be deposited in the Collection Account, subject to withdrawal
pursuant to Section 3.09. Notwithstanding any provision to the contrary, the
Servicer shall not have any responsibility with respect to a primary mortgage
insurance policy unless the Servicer has been made aware of such policy, as
reflected on the Mortgage Loan Schedule or otherwise and have been provided with
adequate information to administer such policy.

                  SECTION 3.12. Enforcement of Due-on-Sale Clauses; Assumption
Agreements

                  The Servicer shall, to the extent it has knowledge of any
conveyance of any Mortgaged Property related to a Litton Mortgage Loan by any
related Mortgagor (whether by absolute conveyance or by contract of sale, and
whether or not the Mortgagor remains or is to remain liable under the Mortgage
Note and/or the Mortgage), exercise its rights to accelerate the maturity of
such Litton Mortgage Loan under the "due-on-sale" clause, if any, applicable
thereto; provided, however, that the Servicer shall not exercise any such rights
if prohibited by law from doing so. If the Servicer reasonably believes that it
is unable under applicable law to enforce such "due-on-sale" clause, or if any
of the other conditions set forth in the proviso to the preceding sentence
apply, the Servicer shall make reasonable efforts to enter into an assumption
and modification agreement from or with the person to whom such property has
been conveyed or is proposed to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note, provided that no such substitution shall be effective unless such person
satisfies the then current underwriting criteria of the Servicer for mortgage
loans similar to the Litton Mortgage Loans. In connection with any assumption or
substitution, the Servicer shall apply such underwriting standards and follow
such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Servicer shall not take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by
the Servicer in respect of an assumption or substitution of liability agreement
will be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Servicer shall notify the Trustee (or the
Custodian) that any such substitution

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or assumption agreement has been completed by forwarding to the Trustee the
executed original of such substitution or assumption agreement, which document
shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Litton Mortgage Loan by operation of law or by the terms of the Mortgage Note
or any assumption which the Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.12, the term
"assumption" is deemed to also include a sale (of the Mortgaged Property)
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.

                  SECTION 3.13. Realization Upon Defaulted Mortgage Loans.

                  (a) The Servicer shall use its best efforts, consistent with
Accepted Servicing Practices, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Litton Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.06. The
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Servicer as contemplated in Sections
3.09 and 3.21. The foregoing is subject to the provision that, in any case in
which a Mortgaged Property shall have suffered damage from an Uninsured Cause,
the Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion that
such restoration will increase the proceeds of liquidation of the related Litton
Mortgage Loan after reimbursement to itself for such expenses. In addition, the
Servicer may write off any second lien Mortgage Loan that is delinquent by 180
days or more.

                  (b) Notwithstanding the foregoing provisions of this Section
3.13 or any other provision of this Agreement, with respect to any Litton
Mortgage Loan as to which the Servicer has received actual notice of, or has
actual knowledge of, the presence of any toxic or hazardous substance on the
related Mortgaged Property, the Servicer shall not, on behalf of the Trust Fund,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trust Fund, the Trustee or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Servicer has also
previously determined, based on its reasonable judgment and a prudent report
prepared by an Independent Person who regularly conducts environmental audits
using customary industry standards, that:

                  (1) such Mortgaged Property is in compliance with applicable
                  environmental laws or, if not, that it would be in the best
                  economic interest of the Trust Fund to take such actions as
                  are necessary to bring the Mortgaged Property into compliance
                  therewith; and

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                  (2) there are no circumstances present at such Mortgaged
                  Property relating to the use, management or disposal of any
                  hazardous substances, hazardous materials, hazardous wastes or
                  petroleum-based materials for which investigation, testing,
                  monitoring, containment, clean-up or remediation could be
                  required under any federal, state or local law or regulation,
                  or that if any such materials are present for which such
                  action could be required, that it would be in the best
                  economic interest of the Trust Fund to take such actions with
                  respect to the affected Mortgaged Property.

                  The cost of the environmental audit report contemplated by
this Section 3.13 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.09(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Litton Mortgage Loan or other Litton Mortgage Loans.

                  If the Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Trust Fund. The cost of any such compliance, containment,
cleanup or remediation shall be advanced by the Servicer, subject to the
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Sections 3.09(a)(iii) or 3.09(a)(ix), such right of reimbursement
being prior to the rights of Certificateholders to receive any amount in the
Collection Account received in respect of the affected Litton Mortgage Loan or
other Litton Mortgage Loans.

                  (c) The Servicer (or an affiliate of the Servicer) may, at its
option, repurchase a Mortgage Loan or REO Property which becomes ninety (90) or
more days delinquent, for which the Servicer has accepted a deed in lieu of
foreclosure or which the Servicer determines in good faith will otherwise become
subject to foreclosure proceedings (evidence of such determination to be
delivered in writing to the Trustee in form and substance satisfactory to the
Servicer and the Trustee prior to purchase). Prior to repurchase pursuant to
this Section 3.13, the Servicer shall be required to continue to make P&I
Advances pursuant to Section 5.03. The Servicer shall purchase such (i)
delinquent Mortgage Loan at a price equal to the Principal Balance of the
Mortgage Loan plus accrued interest thereon at the Mortgage Interest Rate from
the date to which interest has last been paid to the Trust Fund to the date of
purchase plus any unreimbursed Servicing Advances and P&I Advances or (ii) REO
Property at its fair market value as determined in good faith by the Servicer.
Any such repurchase of a Mortgage Loan or REO Property pursuant to this Section
3.13 shall be accomplished by delivery to the Trustee for deposit in the
Distribution Account of the amount of the purchase price. The Trustee, upon
receipt of written certification from the Servicer of such deposit, shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as the Servicer shall furnish and
as shall be necessary to vest in the Servicer title to any Litton Mortgage Loan
released pursuant to this Section 3.13.

                  Notwithstanding the preceding paragraph, in the event that the
Servicer or an affiliate thereof is the owner of more than 50% of a class of
Certificates which is then currently

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in a first loss position and such party is deemed to be the "Primary
Beneficiary" as defined in FIN 40, the Servicer (or an affiliate of the
Servicer) may, at its option, repurchase a Mortgage Loan or REO Property which
becomes 120 or more days delinquent or for which the Servicer has accepted a
deed in lieu of foreclosure, during the period commencing on the first day of
the calendar quarter succeeding the calendar quarter in which the Initial
Delinquency Date occurred with respect to such Mortgage Loan and ending on the
last Business Day of such calendar quarter. If the Servicer (or an affiliate of
the Servicer) does not exercise its purchase right with respect to a Mortgage
Loan during the period specified in the preceding sentence, such Mortgage Loan
shall thereafter again become eligible for purchase pursuant to the preceding
sentence only after the Mortgage Loan ceases to be 120 days or more delinquent
and thereafter becomes 120 days delinquent again. The "Initial Delinquency Date"
of a Mortgage Loan shall mean the date on which the Mortgage Loan first became
120 days delinquent. Prior to repurchase pursuant to this Section 3.12, the
Servicer shall be required to continue to make P&I pursuant to Section 5.03. The
Servicer shall not use any procedure in selecting Mortgage Loans to be
repurchased which is materially adverse to the interests of the
Certificateholders. The Servicer shall purchase such (i) delinquent Mortgage
Loan at a price equal to the Principal Balance of the Mortgage Loan plus accrued
interest thereon at the Mortgage Interest Rate from the date to which interest
has last been paid to the Trust Fund to the date of purchase plus any
unreimbursed Servicing Advances and P&I Advances or (ii) REO Property at its
fair market value as determined in good faith by the Servicer. Any such
repurchase of a Mortgage Loan or REO Property pursuant to this Section 3.13
shall be accomplished by delivery to the Trustee for deposit in the Distribution
Account of the amount of the purchase price. The Trustee shall immediately
effectuate the conveyance of such delinquent Mortgage Loan or REO Property to
the Servicer to the extent necessary, including the prompt delivery of all
documentation to the Servicer.

                  (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Litton Mortgage
Loan, will be applied in the following order of priority: first, to reimburse
the Servicer for any related unreimbursed Servicing Advances and P&I Advances,
pursuant to Section 3.09(a)(ii) or (a)(iii); second, to accrued and unpaid
interest on the Litton Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and third, as a recovery of principal of the Litton Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Litton Mortgage Loan, the
amount of such recovery will be allocated by the Servicer as follows: first, to
unpaid Servicing Fees; and second, to the balance of the interest then due and
owing. The portion of the recovery so allocated to unpaid Servicing Fees shall
be reimbursed to the Servicer pursuant to Section 3.09(a)(iii). The portion of
the recovery allocated to interest (net of unpaid Servicing Fees) and the
portion of the recovery allocated to principal of the Litton Mortgage Loan shall
be applied as follows: first, to reimburse the Servicer for any related
unreimbursed Servicing or P&I Advances in accordance with Section 3.09(a)(ii)
and any other amounts reimbursable to the Servicer pursuant to Section 3.09, and
second, as part of the amounts to be transferred to the Distribution Account in
accordance with Section 3.08(b).

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                  SECTION 3.14. Trustee to Cooperate; Release of Mortgage Files.

                  (a) Upon becoming aware of the payment in full of any Mortgage
Loan, or the receipt by the Servicer, RMC or RMAE 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 Servicer, RMC or RMAE, as
applicable, will 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 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 Collection Account or Custodial Account, as applicable, have
been or will be so deposited) and shall request that the Custodian, on behalf of
the Trustee, deliver to the Servicer, RMC or RMAE, as applicable, the related
Mortgage File. Upon receipt of such certification and request, the Custodian, on
behalf of the Trustee, shall within five (5) Business Days release the related
Mortgage File to the Servicer, RMC or RMAE, as applicable, and the Trustee and
Custodian shall have no further responsibility with regard to such Mortgage
File. Upon any such payment in full, the Servicer, RMC or RMAE, as applicable,
is authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Collection Account or
Custodial Account, as applicable.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Trustee shall execute such documents as
shall be prepared and furnished to the Trustee by the Servicer, RMC or RMAE, as
applicable (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 the Servicer, RMC or RMAE, as applicable,
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 Assignment Agreement (as applicable) (or
in a mutually agreeable electronic format which will, in lieu of a signature on
its face, originate from a Servicing Officer), release within five (5) Business
Days the related Mortgage File held in its possession or control to the
Servicer, RMC or RMAE, as applicable. Such trust receipt shall obligate the
Servicer, RMC or RMAE, as applicable, to return the Mortgage File to the
Custodian on behalf of the Trustee, when the need therefor by the Servicer, RMC
or RMAE, as applicable, no longer exists unless the Mortgage 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, RMC or RMAE, as
applicable.

                  Notwithstanding the foregoing, in connection with a Principal
Prepayment in full of any Mortgage Loan, the Master Servicer may request release
of the related Mortgage File from the Custodian, in accordance with the
provisions of the Custodial Agreement, in the event the Servicer, RMC or RMAE
fails to do so.

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                  Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer, RMC or RMAE, any court pleadings,
requests for trustee's sale or other documents prepared and delivered to the
Trustee and reasonably acceptable to it and necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Each such certification shall include a request that such pleadings or
documents be executed by the Trustee and a statement as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale. So long as no Servicer Event of Default shall have occurred and
be continuing, the Servicer shall have the right to execute any and all such
court pleadings, requests and other documents as attorney-in-fact for, and on
behalf of the Trustee.

                  SECTION 3.15. Servicing Compensation.

                  As compensation for the activities of the Servicer hereunder,
the Servicer shall be entitled to the Servicing Fee with respect to each Litton
Mortgage Loan payable solely from payments of interest in respect of such Litton
Mortgage Loan, subject to Section 3.22. In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of Insurance Proceeds or
Liquidation Proceeds to the extent permitted by Section 3.09(a)(iii) and out of
amounts derived from the operation and sale of an REO Property to the extent
permitted by Section 3.21. The right to receive the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Servicer's responsibilities and obligations under this Agreement to the
extent permitted herein.

                  Additional servicing compensation in the form of assumption
fees, late payment charges, customary real estate referral fees and other
miscellaneous fees (other than Prepayment Charges), shall be retained by the
Servicer only to the extent such fees or charges are received by the Servicer.
The Servicer shall also be entitled pursuant to Section 3.09(a)(iv) to withdraw
from the Collection Account and pursuant to Section 3.21(b) to withdraw from any
REO Account, as additional servicing compensation, interest or other income
earned on deposits therein, subject to Section 3.10. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided herein.

                  SECTION 3.16. Collection Account Statements.

                  Not later than fifteen days after each Distribution Date, the
Servicer shall forward to the Master Servicer, the Securities Administrator, the
Trustee and the Depositor a statement prepared by the institution at which the
Collection Account is maintained setting forth the status of the Collection
Account as of the close of business on such Distribution Date and showing, for
the period covered by such statement, the aggregate amount of deposits into and
withdrawals from the Collection Account of each category of deposit specified in
Section 3.08(a) and each category of withdrawal specified in Section 3.09.
Copies of such statement shall be provided by the Securities Administrator to
any Certificateholder and to any Person identified to the Securities
Administrator as a prospective transferee of a Certificate, upon request at the
expense

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of the requesting party, provided such statement is delivered by the
Servicer to the Securities Administrator.

                  SECTION 3.17. Statement as to Compliance.

                  Not later than March 15th of each calendar year commencing in
2005, the Servicer shall deliver to the Trustee, the Master Servicer and the
Depositor an Officers' Certificate in a form acceptable for filing with the
Securities and Exchange Commission as an exhibit to Form 8-K or other required
form (upon which the Master Servicer can conclusively rely in connection with
its obligations under Section 5.06) stating, as to each signatory thereof, that
(i) a review of the activities of the Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder, upon request at the expense of the requesting
party, provided such statement is delivered by the Servicer to the Trustee.

                  SECTION 3.18. Independent Public Accountants' Servicing
Report.

                  Not later than March 15th of each calendar year commencing in
2005, the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Servicer a report in
a form acceptable for filing with the Securities and Exchange Commission as an
exhibit to Form 10-K or other required form stating that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Servicer which includes an assertion that the Servicer has complied with certain
minimum residential mortgage loan servicing standards, identified in the Uniform
Single Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America, with respect to the servicing of residential
mortgage loans during the most recently completed fiscal year and (ii) on the
basis of an examination conducted by such firm in accordance with standards
established by the American Institute of Certified Public Accountants, such
representation is fairly stated and such firm has determined that the Servicer
has complied in all material respects, subject to such exceptions and other
qualifications that may be appropriate. Immediately upon receipt of such report,
the Servicer shall furnish a copy of such report to the Master Servicer, the
Trustee and each Rating Agency. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request at the Servicer's expense,
provided that such statement is delivered by the Servicer to the Trustee.

                  SECTION 3.19. Annual Certification.

                  (a) The Servicer shall deliver to the Master Servicer, on or
before March 15th of each calendar year beginning in 2005 (or, if any such day
is not a Business Day, the immediately preceding Business Day) or such
alternative date reasonably specified by the Master Servicer which shall occur
not later than 15 days prior to the date any Form 10-K is required to be filed
with the Commission in connection with the transactions contemplated by this
Agreement, a certification in the form attached hereto as Exhibit C. Such
certification shall be signed by the senior officer in charge of servicing of
the Servicer. In addition, the Servicer shall provide such other information
with respect to the Litton Mortgage Loans and the servicing and

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administration thereof within the control of the Servicer which shall be
required to enable the Master Servicer to comply with the reporting requirements
of the Securities and Exchange Act of 1934, as amended, pursuant to Section 5.06
hereof.

                  (b) The Servicer shall indemnify and hold harmless the Master
Servicer, the Securities Administrator, the Trustee, the Depositor and their
respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.19 or the Servicer's
negligence, bad faith or willful misconduct in connection therewith. Such
indemnity shall survive the termination or resignation of the parties hereto or
the termination of this Agreement. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Master Servicer, the Securities
Administrator, the Trustee and the Depositor, then the Servicer agrees that it
shall contribute to the amount paid or payable by the Master Servicer, the
Securities Administrator, the Trustee and the Depositor as a result of the
losses, claims, damages or liabilities of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor in such proportion as is
appropriate to reflect the relative fault of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor on the one hand and the Servicer on
the other in connection with a breach of the Servicer's obligations under this
Section 3.19.

                  SECTION 3.20. Access to Certain Documentation.

                  The Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificate Owner,
access to the documentation regarding the Litton Mortgage Loans required by
applicable laws and regulations. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the offices
of the Servicer designated by it. Nothing in this Section 3.20 shall limit the
obligation of the Servicer to comply with any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section. Nothing in this
Section 3.20 shall require the Servicer to collect, create, collate or otherwise
generate any information that it does not generate in its usual course of
business. The Servicer shall not be required to make copies of or ship documents
to any Person unless provisions have been made for the reimbursement of the
costs thereof. In addition, access to the documentation regarding the Litton
Mortgage Loans will be provided to any Certificate Owner, the Trustee and to any
Person identified to the Servicer, as a prospective transferee of a Certificate,
upon reasonable request during normal business hours at the offices of the
Servicer designated by it at the expense of the Person requesting such access.

                  SECTION 3.21. Title, Management and Disposition of REO
Property.

                  (a) The deed or certificate of sale of any REO Property
related to a Litton Mortgage Loan shall be taken in the name of the Trustee, or
its nominee, on behalf of the Trust Fund and for the benefit of the
Certificateholders. The Servicer, on behalf of REMIC I, shall either sell any
REO Property by the close of the third calendar year following the calendar year
in which REMIC I acquires ownership of such REO Property for purposes of Section
860(a)(8) of the Code or request from the Internal Revenue Service, no later
than 60 days before the day on

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which the three-year grace period would otherwise expire an extension of the
three-year grace period, unless the Servicer had delivered to the Trustee an
Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by REMIC I of such REO Property subsequent to three years after
its acquisition will not result in the imposition on any Trust REMIC created
hereunder of taxes on "prohibited transactions" thereof, as defined in Section
860F of the Code, or cause any Trust REMIC hereunder to fail to qualify as a
REMIC under Federal law at any time that any Certificates are outstanding. The
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC created hereunder of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.

                  (b) The Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property related to a
Litton Mortgage Loan separate and apart from its own funds and general assets
and shall establish and maintain with respect to REO Properties an account held
in trust for the Trustee, on behalf of the Trust Fund and for the benefit of the
Certificateholders (the "REO Account"), which shall be an Eligible Account. The
Servicer shall be permitted to allow the Collection Account to serve as the REO
Account, subject to the maintenance of separate ledgers for each REO Property.
The Servicer shall be entitled to retain or withdraw any interest income paid on
funds deposited in the REO Account.

                  (c) The Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property related to a Litton Mortgage
Loan as are consistent with the manner in which the Servicer manages and
operates similar property owned by it or any of its Affiliates, all on such
terms and for such period as the Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Servicer shall deposit on a
daily basis in the REO Account all revenues received by it with respect to an
REO Property related to a Litton Mortgage Loan and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of such REO
Property including, without limitation:

                           (i) all insurance premiums due and payable in respect
         of such REO Property;

                           (ii) all real estate taxes and assessments in respect
         of such REO Property that may result in the imposition of a lien
         thereon; and

                           (iii) all costs and expenses necessary to maintain
         such REO Property.

                  To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Servicer
shall advance from its own funds such amount as is necessary for such purposes
if, but only if, the Servicer would make such advances if the Servicer owned the
REO Property and if in the Servicer's judgment, the payment of such amounts will
be recoverable from the rental or sale of the REO Property.

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                  Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding the foregoing, the Servicer,
on behalf of the Trust Fund, shall not:

                           (i) enter into, renew or extend any New Lease with
         respect to any REO Property, if the New Lease by its terms will give
         rise to any income that does not constitute Rents from Real Property;

                           (ii) permit any amount to be received or accrued
         under any New Lease other than amounts that will constitute Rents from
         Real Property;

                           (iii) authorize or permit any construction on any REO
         Property, other than the completion of a building or other improvement
         thereon, and then only if more than ten percent of the construction of
         such building or other improvement was completed before default on the
         related Litton Mortgage Loan became imminent, all within the meaning of
         Section 856(e)(4)(B) of the Code; or

                           (iv) allow any Person to Directly Operate any REO
         Property on any date more than 90 days after its date of acquisition by
         the Trust Fund;

unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Servicer and the Trustee, to the effect that such action will
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code at any time that it is held by
REMIC I, in which case the Servicer may take such actions as are specified in
such Opinion of Counsel.

                  The Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:

                           (i) the terms and conditions of any such contract
         shall not be inconsistent herewith;

                           (ii) any such contract shall require, or shall be
         administered to require, that the Independent Contractor pay all costs
         and expenses incurred in connection with the operation and management
         of such REO Property, including those listed above and remit all
         related revenues (net of such costs and expenses) to the Servicer as
         soon as practicable, but in no event later than thirty days following
         the receipt thereof by such Independent Contractor;

                           (iii) none of the provisions of this Section 3.21(c)
         relating to any such contract or to actions taken through any such
         Independent Contractor shall be deemed to relieve the Servicer of any
         of its duties and obligations to the Trustee on behalf of the Trust
         Fund and for the benefit of the Certificateholders with respect to the
         operation and management of any such REO Property; and

                           (iv) the Servicer shall be obligated with respect
         thereto to the same extent as if it alone were performing all duties
         and obligations in connection with the operation and management of such
         REO Property.

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<PAGE>

                  The Servicer shall be entitled to enter into any agreement
with any Independent Contractor performing services for it related to its duties
and obligations hereunder for indemnification of the Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Servicer shall be solely liable for all fees
owed by it to any such Independent Contractor, irrespective of whether the
Servicer's compensation pursuant to Section 3.15 is sufficient to pay such fees.
Any such agreement shall include a provision that such agreement may be
immediately terminated by the Trustee (as successor Servicer) or any other
successor Servicer (including the Master Servicer) without fee, in the event the
Servicer shall for any reason, no longer be the Servicer of the Litton Mortgage
Loans (including termination due to a Servicer Event of Default).

                  (d) In addition to the withdrawals permitted under Section
3.21(c), the Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself unpaid Servicing Fees in respect
of the related Litton Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of
such REO Property or the related Litton Mortgage Loan. On the Servicer
Remittance Date, the Servicer shall withdraw from each REO Account maintained by
it and deposit into the Distribution Account in accordance with Section
3.08(d)(ii), for distribution on the related Distribution Date in accordance
with Section 5.01, the income from the related REO Property received during the
prior calendar month, net of any withdrawals made pursuant to Section 3.21(c) or
this Section 3.21(d).

                  (e) Subject to the time constraints set forth in Section
3.21(a), each REO Disposition shall be carried out by the Servicer at such price
and upon such terms and conditions as the Servicer shall deem necessary or
advisable, as shall be normal and usual in accordance with Accepted Servicing
Practices.

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Litton
Mortgage Loan and net of any payment or reimbursement to the Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.08(d)(ii) on the Servicer Remittance Date in the month following
the receipt thereof for distribution on the related Distribution Date in
accordance with Section 5.01. Any REO Disposition shall be for cash only (unless
changes in the REMIC Provisions made subsequent to the Startup Day allow a sale
for other consideration).

                  (g) The Servicer shall file information returns (and shall
provide a certification of a Servicing Officer to the Master Servicer that such
filings have been made) with respect to the receipt of mortgage interest
received in a trade or business, reports of foreclosures and abandonments of any
Mortgaged Property and cancellation of indebtedness income with respect to any
Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code,
respectively. Such reports shall be in form and substance sufficient to meet the
reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the
Code.

                  SECTION 3.22. Obligations of the Servicer in Respect of
Prepayment Interest Shortfalls; Relief Act Interest Shortfalls.

                  The Servicer shall deliver to the Securities Administrator for
deposit into the Distribution Account on or before 5:00 p.m. New York time on
the Servicer Remittance Date from its own funds an amount equal to the lesser of
(i) the aggregate amount of the Prepayment

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Interest Shortfalls attributable to Principal Prepayments in full on the Litton
Mortgage Loans for the related Distribution Date resulting solely from voluntary
Principal Prepayments received by the Servicer during the related Prepayment
Period and (ii) 50% of its aggregate Servicing Fees for the most recently ended
Prepayment Period with respect to the Litton Mortgage Loans. The Servicer shall
not have the right to reimbursement for any amounts remitted to the Securities
Administrator in respect of this Section 3.22. The Servicer shall not be
obligated to pay the amounts set forth in this Section 3.22 with respect to
shortfalls resulting from the application of the Relief Act.

                  SECTION 3.23. Obligations of the Servicer in Respect of
Mortgage Rates and Monthly Payments.

                  In the event that a shortfall in any collection on or
liability with respect to any Litton Mortgage Loan results from or is
attributable to adjustments to Mortgage Rates, Monthly Payments or Stated
Principal Balances that were made by the Servicer in a manner not consistent
with the terms of the related Mortgage Note and this Agreement, the Servicer,
upon discovery or receipt of notice thereof, immediately shall deliver to the
Securities Administrator for deposit in the Distribution Account from its own
funds the amount of any such shortfall and shall indemnify and hold harmless the
Trust Fund, the Trustee, the Securities Administrator, the Master Servicer, the
Depositor and any successor Servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Agreement.
Notwithstanding the foregoing, this Section 3.23 shall not limit the ability of
the Servicer to seek recovery of any such amounts from the related Mortgagor
under the terms of the related Mortgage Note and Mortgage, to the extent
permitted by applicable law.

                  SECTION 3.24. Reserve Fund.

                  (a) No later than the Closing Date, the Securities
Administrator shall establish and maintain a separate, segregated trust account
entitled, "Reserve Fund, Wells Fargo Bank, N.A., in trust for the registered
holders of ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM2, Asset
Backed Pass-Through Certificates." On the Closing Date, the Depositor will
deposit, or cause to be deposited, into the Reserve Fund $1,000. In addition,
the amount deposited in the Reserve Fund shall be increased by any payments
received by the Securities Administrator under the Cap Contract and deposited
into Reserve Fund for the benefit of the Class A Certificates, Mezzanine
Certificates and the Class B Certificates; provided that the amount of any
Excess Cap Payments shall be held for the benefit of the Class CE Certificates
and payable pursuant to Section 5.01(a)(5)(viii).

                  (b) On each Distribution Date, the Securities Administrator
shall deposit into the Reserve Fund the amounts described in Section
5.01(a)(5)(vi), rather than distributing such amounts to the Class CE
Certificateholders, and Section 5.01(a)(5)(vii). On each such Distribution Date,
the Securities Administrator shall hold all such amounts for the benefit of the
Holders of the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates and will distribute such amounts to the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates, in the
amounts and priorities set forth in Section 5.01(a). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Securities
Administrator shall deposit, into the Reserve Fund on behalf of the Class CE
Certificateholders, from amounts otherwise distributable to the Class CE
Certificateholders, an

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<PAGE>

amount such that when added to other amounts already on deposit in the Reserve
Fund, the aggregate amount on deposit therein is equal to $1,000.

                  (c) For federal and state income tax purposes, the Class CE
Certificateholders will be deemed to be the owners of the Reserve Fund and all
amounts deposited into the Reserve Fund (other than the initial deposit therein
of $1,000 and any amounts paid to the Reserve Fund from the Cap Contract) shall
be treated as amounts distributed by REMIC II to the Holders of the Class CE
Certificates. Upon the termination of the Trust Fund, or the payment in full of
the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates, all amounts remaining on deposit in the Reserve Fund will be
released by the Trust Fund and distributed to the Class CE Certificateholders or
their designees. The Reserve Fund will be part of the Trust Fund but not part of
any REMIC and any payments to the Holders of the Class A Certificates, the
Mezzanine Certificates or the Class B 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).

                  (d) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees that the Securities Administrator will deposit
into the 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.

                  (e) At the direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Securities Administrator
shall direct any depository institution maintaining the 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 Reserve Fund. In no
event shall the Securities Administrator be liable for any investments made
pursuant to this clause (e). If the Holders of a majority in Percentage Interest
in the Class CE Certificates fail to provide investment instructions, funds on
deposit in the Reserve Fund shall be held uninvested by the Securities
Administrator without liability for interest or compensation.

                  (f) For federal tax return and information reporting, the
right of the Class A Certificateholders, the Mezzanine Certificateholders and
Class B Certificateholders to receive payments from the Reserve Fund in respect
of any Net WAC Rate Carryover Amount shall be assigned a value of $140,000.

                  SECTION 3.25. Advance Facility.

                  (a) The Servicer is hereby authorized to enter into a
financing or other facility (any such arrangement, an "Advance Facility"), the
documentation for which complies with Section 3.25(e) below, under which (1) the
Servicer assigns or pledges its rights under this

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

                  (b) If the Servicer enters into an Advance Facility, the
Servicer and the related Advance Financing Person shall deliver to the Trustee
at the address set forth in Section 12.05 a written notice (an "Advance Facility
Notice"), stating (a) the identity of the Advance Financing Person and (b) the
identity of the Person (the "Servicer's Assignee") that will, subject to Section
3.25(c), have the right to make withdrawals from the Collection Account pursuant
to Section 3.09(a) to reimburse previously unreimbursed P&I Advances and/or
Servicing Advances ("Advance Reimbursement Amounts"). Advance Reimbursement
Amounts (i) shall consist solely of amounts in respect of P&I Advances and/or
Servicing Advances for which the Servicer would be permitted to reimburse itself
in accordance with Section 3.09(a), assuming the Servicer had made the related
P&I Advance(s) and/or Servicing Advance(s) and (ii) shall not consist of amounts
payable to a successor Servicer in accordance with Section 3.09(a) to the extent
permitted under Section 3.25(d).

                  (c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Financing Person and the Servicer's Assignee,
shall be entitled to receive reimbursements of P&I Advances and/or Servicing
Advances in accordance with Section 3.09(a), which entitlement may be terminated
by the Advance Financing Person identified in the Advance Facility Notice
pursuant to a written notice to the Trustee, the Master Servicer and the
Servicer in the manner set forth in Section 12.05. Upon receipt of such written
notice, the Servicer shall no longer be entitled to receive reimbursement for
any Advance Reimbursement Amounts and the Servicer's Assignee shall immediately
have the right to receive from the Collection Account all Advance Reimbursement
Amounts. Notwithstanding the foregoing, and for the avoidance of doubt, (i) the
Servicer and/or the Servicer's Assignee shall only be entitled to reimbursement
of Advance Reimbursement Amounts from the Collection Account pursuant to Section
3.09(a) to the extent of and from the funds that the Servicer would have been
entitled to reimbursement hereunder and shall not otherwise be entitled to
receive amounts designated for distribution to Certificateholders and (ii) none
of the Trustee or the Certificateholders shall have

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<PAGE>

any right to, or otherwise be entitled to, any Advance Reimbursement Amounts to
which the Servicer or the Servicer's Assignee, as applicable, shall be entitled
to pursuant to this Section 3.25. An Advance Facility may be terminated by the
joint written direction of the Servicer and the related Advance Financing
Person. Written notice of such termination shall be delivered to the Trustee and
the Master Servicer in the manner set forth in Section 12.05 hereof. None of the
Depositor, the Master Servicer or the Trustee shall, as a result of the
existence of any Advance Facility, have any additional duty or liability with
respect to the calculation or payment of any Advance Reimbursement Amount, nor,
as a result of the existence of any Advance Facility, shall the Depositor, the
Master Servicer or the Trustee have any additional responsibility to track or
monitor the administration of the Advance Facility or the payment of Advance
Reimbursement Amounts to the Servicer's Assignee. The Servicer shall indemnify
the Depositor, the Trustee, the Master Servicer, any successor Servicer and the
Trust Fund for any claim, loss, liability or damage resulting from any claim by
the related Advance Financing Person or the Servicer's Assignee, except to the
extent that such claim, loss, liability or damage resulted from or arose out of
the gross negligence, recklessness or willful misconduct on the part of the
Depositor, the Trustee, the Master Servicer or any successor Servicer, as the
case may be, or the breach of any obligations under this Agreement by the
successor Servicer, the Master Servicer or the Trustee, as the case may be. The
Servicer shall maintain and provide to any successor Servicer and, upon request,
the Trustee and the Master Servicer a detailed accounting on a loan-by-loan
basis as to amounts advanced by, pledged or assigned to, and reimbursed to any
Advance Financing Person. The successor Servicer shall be entitled to rely on
any such information provided by the predecessor Servicer, and the successor
Servicer (including the Trustee or the Master Servicer) shall not be liable for
any errors in such information.

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

                  (e) For purposes of any Officer's Certificate of the Servicer
made pursuant to Section 4.03(d), any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance referred to therein may have been made by such
Servicer or any predecessor Servicer. In making its determination that any P&I
Advance or Servicing Advance theretofore made has become a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance, as applicable, the Servicer shall
apply the same criteria in making such determination regardless of whether such
P&I Advance or Servicing Advance shall have been made by the Servicer or any
predecessor Servicer.

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                  (f) Any amendment to this Section 3.25 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.25, may be
entered into by the Trustee, the Depositor and the Servicer without the consent
of any Certificateholder, provided such amendment complies with Section 12.01.
All reasonable costs and expenses (including attorneys' fees and disbursements)
of each party hereto of any such amendment shall be borne solely by the Servicer
without reimbursement from the Trust Fund. The parties hereto hereby acknowledge
and agree that: (a) the P&I Advances and/or Servicing Advances financed by
and/or pledged to an Advance Financing Person under any Advance Facility are
obligations owed to the Servicer payable only from the cash flows and proceeds
received under this Agreement for reimbursement of P&I Advances and/or Servicing
Advances only to the extent provided herein, and the Trustee and the Trust are
not, as a result of the existence of any Advance Facility, obligated or liable
to repay any P&I Advances and/or Servicing Advances financed by the Advance
Financing Person; (b) the Servicer will be responsible for remitting to the
Advance Financing Person the applicable amounts collected by it as reimbursement
for P&I Advances and/or Servicing Advances funded by the Advance Financing
Person, subject to the provisions of this Agreement; and (c) the Trustee shall
not have any responsibility to track or monitor the administration of the
financing arrangement between the Servicer and any Advance Financing Person.

                  SECTION 3.26. The Servicer Indemnification.

                  The Servicer agrees to indemnify the Trustee, Master Servicer
and the Securities Administrator, from, and hold the Trustee, Master Servicer
and the Securities Administrator harmless against, any loss, liability or
expense (including reasonable attorney's fees and expenses) incurred by any such
Person by reason of the Servicer's willful misfeasance, bad faith or gross
negligence in the performance of its duties under this Agreement or by reason of
the 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 Servicer, the Trustee, the
Master Servicer and the Securities Administrator. Any payment hereunder made by
the Servicer to any such Person shall be from the Servicer's own funds, without
reimbursement from REMIC I therefor.

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                                   ARTICLE IV

                       ADMINISTRATION AND MASTER SERVICING
                  OF THE MORTGAGE LOANS BY THE MASTER SERVICER

                  SECTION 4.01. Master Servicer.

                  The Master Servicer shall, from and after the Closing Date,
supervise, monitor and oversee the obligations of the Servicer under this
Agreement and RMC and RMAE under the Servicing Agreement to service and
administer the related Mortgage Loans in accordance with the terms of this
Agreement and the 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 the Servicer, RMC and RMAE 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 the Servicer, RMC and RMAE and shall cause the Servicer, RMC and RMAE to
perform and observe the covenants, obligations and conditions to be performed or
observed by the Servicer under this Agreement or RMC and RMAE under the
Servicing Agreement. The Master Servicer shall independently and separately
monitor the Servicer's, RMC's and RMAE's servicing activities with respect to
each related Mortgage 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 Servicer's, RMC's or RMAE's and Master Servicer's
records, and based on such reconciled and corrected information, prepare the
statements specified in Section 5.03 and any other information and statements
required to be provided by the Master Servicer hereunder. The Master Servicer
shall reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Servicer, RMC or RMAE to the Distribution Account pursuant to
the terms hereof based on information provided to the Master Servicer by the
Servicer, RMC and RMAE. Notwithstanding anything to the contrary herein, the
Master Servicer shall have no obligation to supervise, monitor or oversee the
performance of RMC or RMAE under the Servicing Agreement on or after the related
Servicing Transfer Date.

                  The Trustee shall furnish the Servicer, RMC, RMAE 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 Servicer, RMC, RMAE and
the Master Servicer to service and administer the related Mortgage Loans and REO
Properties. The Trustee shall have no responsibility for any action of the
Master Servicer, the Servicer, RMC or RMAE pursuant to any such limited power of
attorney and shall be indemnified by the Master Servicer, the Servicer, RMC or
RMAE, as applicable, for any cost, liability or expense incurred by the Trustee
in connection with such Person's misuse of any such power of attorney.

                  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
Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee, the Custodian or the
Securities Administrator; provided,

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<PAGE>

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 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 Servicer, RMC,
RMAE or the Master Servicer upon request any court pleadings, requests for
trustee's sale or other documents necessary or desirable to (i) the foreclosure
or trustee's sale with respect to a Mortgaged Property; (ii) any legal action
brought to obtain judgment against any Mortgagor on the Mortgage Note or any
other Mortgage 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 Mortgage Loan Document or otherwise available at law or
equity.

                  SECTION 4.02. REMIC-Related Covenants.

                  For as long as each REMIC shall exist, the Trustee and the
Securities Administrator shall act in accordance herewith to treat such REMIC as
a REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the Servicer, RMC, RMAE 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 Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has
received a REMIC Opinion prepared at the expense of the Trust Fund; and (b)
other than with respect to a substitution pursuant to the Mortgage Loan Purchase
Agreement or Section 2.03 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a Opinion of
Counsel stating that such contribution will not result in an Adverse REMIC Event
as defined in Section 11.01(f).

                  SECTION 4.03. Monitoring of Servicer.

                  (a) The Master Servicer shall be responsible for monitoring
the compliance by the Servicer with its duties under this Agreement and RMC and
RMAE with their respective duties under the Servicing Agreement. In the review
of the Servicer's, RMC's or RMAE's activities, the Master Servicer may rely upon
an officer's certificate of the Servicer, RMC or RMAE with regard to the
Servicer's, RMC's or RMAE's compliance with the terms of this Agreement or the
Servicing Agreement, as applicable. In the event that the Master Servicer, in
its judgment, determines that the Servicer, RMC or RMAE should be terminated in
accordance with the terms hereof or the terms of the Servicing Agreement or that
a notice should be sent pursuant to the terms hereof or the of the Servicing
Agreement with respect to the occurrence of an event that, unless cured, would
constitute a Servicer Event of Default, or an event of default under the
Servicing Agreement, the Master Servicer shall notify the Servicer, RMC, RMAE,
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 the Servicer under this
Agreement and RMC and RMAE under the Servicing Agreement and shall, in the event
that the Servicer fails to

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perform its obligations in accordance with this Agreement, subject to this
Section and Article VIII, the Trustee shall terminate the rights and obligations
of the Servicer hereunder in accordance with the provisions of Article VIII. In
the event that RMC or RMAE fails to perform its obligations in accordance with
the Servicing Agreement, the Master Servicer shall terminate the rights and
obligations of RMC or RMAE, as applicable, as servicer in accordance with the
Servicing Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims 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 Mortgage 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 reasonable indemnity for its costs and
expenses in pursuing such action.

                  (c) The Master Servicer shall be entitled to be reimbursed by
the Servicer, RMC or RMAE, as applicable (or from amounts on deposit in the
Distribution Account if the Servicer, RMC or RMAE is unable to fulfill its
obligations hereunder or under the Servicing Agreement) for all reasonable
out-of-pocket or third party costs associated with the transfer of servicing
from the predecessor Servicer (or if the predecessor Servicer is the Master
Servicer, from the Servicer immediately preceding the Master Servicer) or RMC or
RMAE, including without limitation, any reasonable out-of-pocket or third party
costs or expenses associated with the complete transfer of all servicing data
and the completion, correction or manipulation of such servicing data as may be
required by the Master Servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Master Servicer to service the related
Mortgage Loans properly and effectively, upon presentation of reasonable
documentation of such costs and expenses.

                  (d) The Master Servicer shall require the Servicer, RMC and
RMAE to comply with the remittance requirements and other obligations set forth
in this Agreement and the Servicing Agreement.

                  (e) If the Master Servicer acts as successor to the Servicer,
RMC or RMAE, it will not assume liability for the representations and warranties
of the terminated Servicer, RMC or RMAE.

                  SECTION 4.04. Fidelity Bond.

                  The Master Servicer, at its expense, shall maintain in effect
a blanket fidelity bond and an errors and omissions insurance policy, 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.

                  SECTION 4.05. Power to Act; Procedures.

                  The Master Servicer shall master service the Mortgage Loans
and shall have full power and authority, subject to the REMIC Provisions and the
provisions of Article XI, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority

                                       98
<PAGE>

(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 Mortgage Loan, in each
case, in accordance with the provisions of this Agreement; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, shall not permit the Servicer, RMC or RMAE) 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 or REMIC II 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 has received an Opinion
of Counsel (but not at the expense of the Master Servicer) to the effect that
the contemplated action will not cause REMIC I or REMIC II to fail to qualify as
a REMIC or result in the imposition of a tax upon REMIC I or REMIC II, as the
case may be. The Trustee shall furnish the Master Servicer, upon written request
from a Servicing Officer, with any powers of attorney prepared and delivered to
it and reasonably acceptable to it by empowering the Master Servicer, the
Servicer, RMC or RMAE 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 Mortgage Loans or the Mortgaged Property, in
accordance with this Agreement or the Servicing Agreement, and the Trustee shall
execute and deliver such other documents prepared and delivered to it and
reasonably acceptable to it, as the Master Servicer or the Servicer may request,
to enable the Master Servicer to master service and administer the related
Mortgage 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 misuse of any such powers of attorney by the Master Servicer or
the Servicer and shall be indemnified by the Master Servicer or the Servicer, as
applicable, for any cost, liability or expense incurred by the Trustee in
connection with such Person's use or misuse of any such power of attorney). 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 9.10. 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 in the name of the Trustee, be deemed
to be the agent of the Trustee.

                  SECTION 4.06. Due-on-Sale Clauses; Assumption Agreements.

                  To the extent Mortgage Loans contain enforceable due-on-sale
clauses, the Master Servicer shall cause the Servicer, RMC or RMAE, as
applicable, to enforce such clauses in accordance with this Agreement or the
Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
this Agreement or the Servicing Agreement and, as a consequence, a Mortgage Loan
is assumed, the original Mortgagor may be released from liability in accordance
with this Agreement or the Servicing Agreement.

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                  SECTION 4.07. Documents, Records and Funds in Possession of
Master Servicer To Be Held for Trustee.

                  (a) The Master Servicer shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer from time to time as are required by the terms hereof to be
delivered to the Trustee or Custodian. Any funds received by the Master Servicer
in respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be remitted to the Securities Administrator for deposit in
the Distribution Account. The Master Servicer shall, and, subject to Section
3.20 of this Agreement or, to the extent provided therein, the Servicing
Agreement, shall cause the Servicer, RMC or RMAE to provide access to
information and documentation regarding the Mortgage 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 Office of Thrift Supervision,
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 Office of Thrift
Supervision 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 Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be remitted to the Trustee for
deposit in the Distribution Account.

                  SECTION 4.08. Standard Hazard Insurance and Flood Insurance
Policies.

                  For each Mortgage Loan, the Master Servicer shall enforce the
obligation of the Servicer under this Agreement or RMC or RMAE under the
Servicing Agreement to maintain or cause to be maintained standard fire and
casualty insurance and, where applicable, flood insurance, all in accordance
with the provisions of this Agreement or the Servicing Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in Section 3.11 of the Agreement or the
eligibility requirements set forth in the 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.

                  SECTION 4.09. Presentment of Claims and Collection of
Proceeds.

                  The Master Servicer shall enforce the Servicer's obligations
under this Agreement or RMC or RMAE under the Servicing Agreement to prepare and
present on behalf of the Trustee and the Certificateholders all claims under the
Insurance Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer in respect of such policies, bonds or contracts shall be promptly
remitted to the Trustee for deposit in the Distribution Account upon receipt,
except that any amounts realized that are to

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be applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable insurance policy need not be so or remitted.

                  SECTION 4.10. Maintenance of Primary Mortgage Insurance
Policies.

                  (a) The Master Servicer shall not take, or permit the
Servicer, RMC or RMAE to take (to the extent such action is prohibited by this
Agreement or the Servicing Agreement), any action that would result in
noncoverage under any primary mortgage insurance policy of any loss which, but
for the actions of the Master Servicer, the Servicer, RMC or RMAE, as
applicable, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause the Servicer, RMC or RMAE to keep in force
and effect (to the extent that the Mortgage Loan requires the Mortgagor to
maintain such insurance), primary mortgage insurance applicable to each Mortgage
Loan in accordance with the provisions of this Agreement or the Servicing
Agreement. The Master Servicer shall not, and shall not permit the Servicer, RMC
or RMAE 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 or the Servicing Agreement.

                  (b) The Master Servicer agrees to cause the Servicer, RMC or
RMAE to present, on behalf of the Trustee and the 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 Mortgage Loans.

                  SECTION 4.11. 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 Certificates have been distributed in full and the Master Servicer, the
Servicer, RMC and RMAE have otherwise fulfilled their respective obligations
under this Agreement and the Servicing Agreement the Trustee or the Custodian
shall also retain possession and custody of each 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 of any primary mortgage insurance policies, any certificates of
renewal, and such other documents or instruments that constitute Mortgage Loan
Documents that come into the possession of the Master Servicer from time to
time.

                  SECTION 4.12. Realization Upon Defaulted Mortgage Loans.

                  The Master Servicer shall cause the Servicer, RMC or RMAE to
foreclose upon, repossess or otherwise comparably convert the ownership of
Mortgaged Properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory

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arrangements can be made for collection of delinquent payments, all in
accordance with this Agreement or the Servicing Agreement.

                  SECTION 4.13. Compensation for the Master Servicer.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Master Servicing Fee and
the income from investment of or earnings on the funds from time to time in the
Distribution Account, as provided in Section 3.10. The Master Servicing Fee
payable to the Master Servicer in respect of any Distribution Date shall be
reduced in accordance with Section 4.18. 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.

                  SECTION 4.14. REO Property.

                  (a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall cause the Servicer, RMC or RMAE to
sell, any REO Property as expeditiously as possible and in accordance with the
provisions of this Agreement or the Servicing Agreement. Further, the Master
Servicer shall cause the Servicer, RMC or RMAE to sell any REO Property prior to
three years after the end of the calendar year of its acquisition by REMIC I
unless (i) the Trustee shall have been supplied by the Servicer, RMC or RMAE
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 Servicer, RMC or
RMAE 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 Servicer,
RMC or RMAE to protect and conserve, such REO Property in the manner and to the
extent required by this Agreement or the 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 cause the Servicer, RMC and RMAE
to deposit all funds collected and received in connection with the operation of
any REO Property in the REO Account or in the account delegated for such amounts
under the Servicing Agreement.

                  SECTION 4.15. 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, 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

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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 the Master Servicer has
failed to perform any of its duties, responsibilities and obligations under this
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).

                  SECTION 4.16. Annual Independent Accountant's Servicing
Report.

                  If the Master Servicer has, during the course of any calendar
year, directly serviced any of the Mortgage 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 will take
prompt action to do so.

                  SECTION 4.17. UCC.

                  The Depositor agrees to file continuation statements for any
Uniform Commercial Code financing statements which the Seller has informed the
Depositor were filed on the Closing Date in connection with the Trust. The
Depositor shall file any financing statements or amendments thereto required by
any change in the Uniform Commercial Code.

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                  SECTION 4.18. Obligation of the Master Servicer in Respect of
Prepayment Interest Shortfalls.

                  In the event of any Prepayment Interest Shortfalls, the Master
Servicer shall deposit into the Distribution Account not later than the related
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the Servicer, RMC or RMAE with respect to Prepayment
Interest Shortfalls attributable to Principal Prepayments in full on the
Mortgage Loans for the related Distribution Date, and not so paid by the
Servicer, RMC or RMAE and (ii) the aggregate amount of the related Master
Servicing Fees for such Distribution Date, without reimbursement therefor.

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<PAGE>

                                   ARTICLE V

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 5.01. Distributions.

                  (a) (1) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates, in respect
of the Class R-I Interest, as the case may be:

                           (i) to Holders of REMIC I Regular Interest I-LTAA,
         REMIC I Regular Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC
         I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
         Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
         Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I
         Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I
         Regular Interest I-LTB3, REMIC I Regular Interest I-LTB4, REMIC I
         Regular Interest I-LTB5, REMIC I Regular Interest I-LTZZ and REMIC I
         Regular Interest I-LTP, PRO RATA, in an amount equal to (A) the
         Uncertificated Interest for such Distribution Date, plus (B) any
         amounts in respect thereof remaining unpaid from previous Distribution
         Dates. Amounts payable as Uncertificated Interest in respect of REMIC I
         Regular Interest I-LTZZ shall be reduced when the REMIC I
         Overcollateralization Amount is less than the REMIC I Required
         Overcollateralization Amount, by the lesser of (x) the amount of such
         difference and (y) the Maximum I-LTZZ Uncertificated Interest Deferral
         Amount and such amount will be payable to the Holders of REMIC I
         Regular Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC I
         Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
         Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
         Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I
         Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I
         Regular Interest I-LTB3, REMIC I Regular Interest I-LTB4 and REMIC I
         Regular Interest I-LTB5 in the same proportion as the
         Overcollateralization Increase Amount is allocated to the Corresponding
         Certificates and the Uncertificated Balance of REMIC I Regular Interest
         I-LTZZ shall be increased by such amount;

                           (ii) to the Holders of REMIC I Regular Interests, in
         an amount equal to the remainder of the Available Distribution Amount
         funds for such Distribution Date after the distributions made pursuant
         to clause (i) above, allocated as follows:

                           (A) 98.00% of such remainder to the Holders of REMIC
                  I Regular Interest I-LTAA, until the Uncertificated Balance of
                  such Uncertificated REMIC I Regular Interest is reduced to
                  zero;

                           (B) 2.00% of such remainder, first, to the Holders of
                  REMIC I Regular Interest I-LTA, REMIC I Regular Interest
                  I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
                  Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
                  Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6,
                  REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
                  I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular
                  Interest I-LTB3, REMIC I Regular Interest I-

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<PAGE>

                  LTB4 and REMIC I Regular Interest I-LTB5, 1% of and in the
                  same proportion as principal payments are allocated to the
                  Corresponding Certificates, until the Uncertificated Balances
                  of such REMIC I Regular Interests are reduced to zero and
                  second to the Holders of REMIC I Regular Interest I-LTZZ,
                  until the Uncertificated Balance of such REMIC I Regular
                  Interest is reduced to zero;

                           (C) to the Holders of REMIC I Regular Interest I-LTP,
                  all Prepayment Charges and on the Distribution Date
                  immediately following the expiration of the latest Prepayment
                  Charge as identified on the Prepayment Charge Schedule or any
                  Distribution Date thereafter until $100 has been distributed
                  pursuant to this clause; then

                           (D) any remaining amount to the Holders of the Class
                  R-I Interest, in respect of the Class R-I Interest;

provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Reduction Amount shall be allocated to
Holders of REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ,
respectively.

                           (iii) Notwithstanding the distributions described in
         Section 5.01(a)(1), distributions of funds shall be made to
         Certificateholders only in accordance with Section 5.01(2) through (5)
         and Section 5.01(b).

                  (2) On each Distribution Date, the Securities Administrator
         shall withdraw from the Distribution Account to the extent on deposit
         therein an amount equal to the Interest Remittance Amount and make the
         following disbursements and transfers in the order of priority
         described below, in each case to the extent of the Interest Remittance
         Amount remaining for such Distribution Date:

                  FIRST, to the Holders of the Class A Certificates, the Senior
                  Interest Distribution Amount allocable to the Class A
                  Certificates; and

                  SECOND, sequentially, to the Holders of the Class M-1, Class
                  M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
                  Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5
                  Certificates, the Interest Distribution Amount allocable to
                  each such Class.

                  (3) On each Distribution Date (a) prior to the Stepdown Date
         or (b) on which a Trigger Event is in effect, the Securities
         Administrator shall withdraw from the Distribution Account to the
         extent on deposit therein an amount equal to the Principal Distribution
         Amount and the Principal Distribution Amount and distribute to the
         Certificateholders the following amounts, in the following order of
         priority:

                  FIRST, to the Holders of the Class A Certificates, until the
                  Certificate Principal Balance of the Class A Certificates has
                  been reduced to zero; and

                  SECOND, sequentially, to the Holders of the Class M-1, Class
                  M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
                  Class B-1, Class B-2, Class B-3,

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<PAGE>

                  Class B-4 and Class B-5 Certificates, in that order, until the
                  Certificate Principal Balance of each such Class has been
                  reduced to zero.

                  (4) On each Distribution Date (a) on or after the Stepdown
         Date and (b) on which a Trigger Event is not in effect, the Securities
         Administrator shall withdraw from the Distribution Account to the
         extent on deposit therein an amount equal to Principal Distribution
         Amount and distribute to the Certificateholders the following amounts,
         in the following order of priority:

                  FIRST, to the Holders of the Class A Certificates, the Class A
                  Principal Distribution Amount, until the Certificate Principal
                  Balance of Class A Certificates has been reduced to zero;

                  SECOND, to the Holders of the Class M-1 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amount distributed to the
                  Holders of the Class A Certificates under clause FIRST above
                  and to the Certificate Insurer under clause second above, and
                  (y) the Class M-1 Principal Distribution Amount, until the
                  Certificate Principal Balance of the Class M-1 Certificates
                  has been reduced to zero;

                  THIRD, to the Holders of the Class M-2 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  Holders of the Class A Certificates under clause FIRST above
                  and to the Holders of the Class M-1 Certificates under clause
                  SECOND above, and (y) the Class M-2 Principal Distribution
                  Amount, until the Certificate Principal Balance of the Class
                  M-2 Certificates has been reduced to zero;

                  FOURTH, to the Holders of the Class M-3 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates under clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above and to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above, and (y) the Class
                  M-3 Principal Distribution Amount, until the Certificate
                  Principal Balance of the Class M-3 Certificates has been
                  reduced to zero;

                  FIFTH, to the Holders of the Class M-4 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates under clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above, to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above and to the Holders
                  of the Class M-3 Certificates pursuant to clause FOURTH above
                  and (y) the Class M-4 Principal Distribution Amount, until the
                  Certificate Principal Balance of the Class M-4 Certificates
                  has been reduced to zero.

                  SIXTH, to the Holders of the Class M-5 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates under clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above, to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above, to the Holders of
                  the

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                  Class M-3 Certificates pursuant to clause FOURTH above and to
                  the Holders of the Class M-4 Certificates pursuant to clause
                  FIFTH above, and (y) the Class M-5 Principal Distribution
                  Amount, until the Certificate Principal Balance of the Class
                  M-5 Certificates has been reduced to zero.

                  SEVENTH, to the Holders of the Class M-6 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates under clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above, to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above, to the Holders of
                  the Class M-3 Certificates pursuant to clause FOURTH above, to
                  the Holders of the Class M-4 Certificates pursuant to clause
                  FIFTH above and to the Holders of the Class M-5 Certificates
                  under clause SIXTH above, and (y) the Class M-6 Principal
                  Distribution Amount, until the Certificate Principal Balance
                  of the Class M-6 Certificates has been reduced to zero.

                  EIGHTH, to the Holders of the Class M-7 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates under clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above, to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above, to the Holders of
                  the Class M-3 Certificates pursuant to clause FOURTH above, to
                  the Holders of the Class M-4 Certificates pursuant to clause
                  FIFTH above, to the Holders of the Class M-5 Certificates
                  under clause SIXTH above and to the Holders of the Class M-6
                  Certificates under clause SEVENTH above, and (y) the Class M-7
                  Principal Distribution Amount, until the Certificate Principal
                  Balance of the Class M-7 Certificates has been reduced to
                  zero.

                  NINTH, to the Holders of the Class B-1 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates UNDER clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above, to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above, to the Holders of
                  the Class M-3 Certificates pursuant to clause FOURTH above, to
                  the Holders of the Class M-4 Certificates pursuant to clause
                  FIFTH above, to the Holders of the Class M-5 Certificates
                  under clause SIXTH above, to the Holders of the Class M-6
                  Certificates under clause SEVENTH above and to the Holders of
                  the Class M-7 Certificates under clause EIGHTH above, and (y)
                  the Class B-1 Principal Distribution Amount, until the
                  Certificate Principal Balance of the Class B-1 Certificates
                  has been reduced to zero.

                  TENTH, to the Holders of the Class B-2 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates under clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above, to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above, to the Holders of
                  the Class M-3 Certificates pursuant to clause FOURTH above, to
                  the Holders of the Class M-4 Certificates pursuant to clause
                  FIFTH above, to the Holders of the Class M-5

                                      108
<PAGE>

                  Certificates under clause SIXTH above, to the Holders of the
                  Class M-6 Certificates under clause SEVENTH above, to the
                  Holders of the Class M-7 Certificates under clause EIGHTH
                  above and to the Holders of the Class B-1 Certificates under
                  clause NINTH above, and (y) the Class B-2 Principal
                  Distribution Amount, until the Certificate Principal Balance
                  of the Class B-2 Certificates has been reduced to zero.

                  ELEVENTH, to the Holders of the Class B-3 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates under clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above, to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above, to the Holders of
                  the Class M-3 Certificates pursuant to clause FOURTH above, to
                  the Holders of the Class M-4 Certificates pursuant to clause
                  FIFTH above, to the Holders of the Class M-5 Certificates
                  under clause SIXTH above, to the Holders of the Class M-6
                  Certificates under clause SEVENTH above, to the Holders of the
                  Class M-7 Certificates under clause EIGHTH above, to the
                  Holders of the Class B-1 Certificates under clause NINTH above
                  and to the Holders of the Class B-2 Certificates under clause
                  TENTH above, and (y) the Class B-3 Principal Distribution
                  Amount, until the Certificate Principal Balance of the Class
                  B-3 Certificates has been reduced to zero.

                  TWELFTH, to the Holders of the Class B-4 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates under clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above, to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above, to the Holders of
                  the Class M-3 Certificates pursuant to clause FOURTH above, to
                  the Holders of the Class M-4 Certificates pursuant to clause
                  FIFTH above, to the Holders of the Class M-5 Certificates
                  under clause SIXTH above, to the Holders of the Class M-6
                  Certificates under clause SEVENTH above, to the Holders of the
                  Class M-7 Certificates under clause EIGHTH above, to the
                  Holders of the Class B-1 Certificates under clause NINTH above
                  and to the Holders of the Class B-2 Certificates under clause
                  TENTH above and to the Holders of the Class B-3 Certificates
                  under clause ELEVENTH above, and (y) the Class B-4 Principal
                  Distribution Amount, until the Certificate Principal Balance
                  of the Class B-4 Certificates has been reduced to zero.

                  THIRTEENTH, to the Holders of the Class B-5 Certificates, the
                  lesser of (x) the excess of (i) the Principal Distribution
                  Amount over (ii) the sum of the amounts distributed to the
                  holders of the Class A Certificates under clause FIRST above,
                  to the Holders of the Class M-1 Certificates pursuant to
                  clause SECOND above, to the Holders of the Class M-2
                  Certificates pursuant to clause THIRD above, to the Holders of
                  the Class M-3 Certificates pursuant to clause FOURTH above, to
                  the Holders of the Class M-4 Certificates pursuant to clause
                  FIFTH above, to the Holders of the Class M-5 Certificates
                  under clause SIXTH above, to the Holders of the Class M-6
                  Certificates under clause SEVENTH above, to the Holders of the
                  Class M-7 Certificates under clause EIGHTH above, to the
                  Holders of the Class B-1 Certificates under clause NINTH above
                  and to the Holders of the Class B-2

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<PAGE>

                  Certificates under clause TENTH above, to the Holders of the
                  Class B-3 Certificates under clause ELEVENTH above and to the
                  Holders of the Class B-4 Certificates under clause TWELFTH
                  above, and (y) the Class B-4 Principal Distribution Amount,
                  until the Certificate Principal Balance of the Class B-4
                  Certificates has been reduced to zero.

                   (5) On each Distribution Date, the Net Monthly Excess
         Cashflow (or, in the case of clause (i) below, the Net Monthly Excess
         Cashflow exclusive of any Overcollateralization Reduction Amount) shall
         be distributed as follows:

                           (i) to the Holders of the Class or Classes of
         Certificates then entitled to receive distributions in respect of
         principal, in an amount equal to any Extra Principal Distribution
         Amount, payable to such Holders in accordance with the priorities set
         forth in Section 5.01(b) below;

                           (ii) sequentially, to the Holders of the Class M-1,
         Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
         B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates, in
         that order, in an amount equal to the Interest Carry Forward Amount
         allocable to each such Class;

                           (iii) sequentially, to the Holders of the Class M-1,
         Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
         B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates, in
         that order, in an amount equal to the Allocated Realized Loss Amount
         allocable to each such Class;

                           (iv) to the Holders of the Class A Certificates, in
         an amount equal to such Certificates' allocated share of any Prepayment
         Interest Shortfalls on the Mortgage Loans to the extent not covered by
         payments pursuant to Section 3.22 or 4.18 of this Agreement or pursuant
         to the Servicing Agreement and any shortfalls resulting from the
         application of the Relief Act or similar state or local law or the
         bankruptcy code with respect to the related Mortgage Loans to the
         extent not previously reimbursed pursuant to Section 1.02;

                           (v) sequentially, to the Holders of the Class M-1,
         Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
         B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates, in
         that order, in an amount equal to such Certificates' share of any
         Prepayment Interest Shortfalls on the Mortgage Loans to the extent not
         covered by payments pursuant to Sections 3.22 or Section 4.18 of this
         Agreement or pursuant to the Servicing Agreement and any Relief Act
         Interest Shortfall, in each case that were allocated to such Class for
         such Distribution Date and for any prior Distribution Date, to the
         extent not previously reimbursed pursuant to Section 1.02;

                           (vi) to the Reserve Fund from amounts otherwise
         payable to the Class CE Certificates, and then from the Reserve Fund to
         the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
         Class M-6, Class M-7, Class B-1, Class B-2, Class B-3, Class B-4 and
         Class B-5 Certificates in that order, in an amount equal to the unpaid
         amount of any Net WAC Rate Carryover Amount for each such Class for
         such Distribution Date;

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<PAGE>

                           (vii) to the Reserve Fund, the amount required to be
         deposited therein pursuant to Section 3.24(b), after taking into
         account amounts received under the Cap Contract;

                           (viii) to the Holders of the Class CE Certificates
         the sum of (a) the Interest Distribution Amount, (b) any Excess Cap
         Payment and (c) any Overcollateralization Reduction Amount for such
         Distribution Date; and

                           (ix) to the Holders of the Class R Certificates, in
         respect of the Class R-II Interest, any remaining amounts; provided
         that if such Distribution Date is the Distribution Date immediately
         following the expiration of the latest Prepayment Charge term as
         identified on the Mortgage Loan Schedule or any Distribution Date
         thereafter, then any such remaining amounts will be distributed first,
         to the Holders of the Class P Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero; and second, to the
         Holders of the Class R Certificates.

                  The Class CE Certificates are intended to receive all
principal and interest received by the Trust on the Mortgage Loans that is not
otherwise distributable to any other Class of Regular Certificates or REMIC
Regular Interests. If the Securities Administrator determines that the Residual
Certificates are entitled to any distributions on any Distribution Date other
than the final Distribution Date, the Securities Administrator, prior to any
such distribution to any Residual Certificate, shall notify the Depositor of
such impending distribution. Upon such notification, the Depositor will prepare
and request that the other parties hereto enter into an amendment to the Pooling
and Servicing Agreement pursuant to Section 12.01, to revise such mistake in the
distribution provisions.

                  On each Distribution Date, after making the distributions of
the Available Distribution Amount as set forth above, the Securities
Administrator will first, withdraw from the Reserve Fund all income from the
investment of funds in the Reserve Fund and distribute such amount to the
Holders of the Class CE Certificates, second, withdraw from the Reserve Fund the
amount of any Cap Payments received by the Securities Administrator pursuant to
the Cap Contract to pay Net WAC Rate Carryover Amounts to the Class A, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates, in that order,
and then, to the extent of amounts remaining on deposit therein, to pay the
amount of any remaining Net WAC Rate Carryover Amount for such Distribution Date
to the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5
Certificates, in that order, in each case to the extent to the extent any Net
WAC Rate Carryover Amount is allocable to each such Class. In addition, the
Securities Administrator shall withdraw from the Reserve Fund any Excess Cap
Payment and remit such amount to the Holder of the Class CE Certificates.

                  (b) (i) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the Extra Principal
Distribution Amount shall be distributed sequentially to the Holders of the
Class A, Class M-1, Class M-2, Class M 3, Class M-4, Class M-5, Class M-6, Class
M-7, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates, in
that order, until the Certificate Principal Balance of each such Class has been
reduced to zero.

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<PAGE>

                           (ii) On each Distribution Date (a) on or after the
Stepdown Date and (b) on which a
Trigger Event is not in effect, distributions of principal to the extent of the
Extra Principal Distribution Amount shall be distributed in the following order
of priority:

                  FIRST, (a) the lesser of (x) the Principal Distribution Amount
                  and (y) the Class A Principal Distribution Amount, shall be
                  distributed to the Holders of the Class A Certificates until
                  the Certificate Principal Balance of the Class A Certificates
                  has been reduced to zero;

                  SECOND, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the amount distributed to the
                  Holders of the Class A Certificates pursuant to clause FIRST
                  of this Section 5.01(b)(ii) and (y) the Class M-1 Principal
                  Distribution Amount, shall be distributed to the Holders of
                  the Class M-1 Certificates, until the Certificate Principal
                  Balance of such Class has been reduced to zero;

                  THIRD, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii) and to
                  the Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii) and (y) the Class M-2
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class M-2 Certificates, until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  FOURTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii) and to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii) and (y) the Class M-3 Principal
                  Distribution Amount, shall be distributed to the Holders of
                  the Class M-3 Certificates, until the Certificate Principal
                  Balance of such Class has been reduced to zero;

                  FIFTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii) and to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii) and (y) the Class M-4 Principal Distribution
                  Amount, shall be distributed to the Holders of the Class M-4
                  Certificates, until the Certificate Principal Balance of such
                  Class has been reduced to zero;

                  SIXTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii) and to the Holders of the Class M-4 Certificates
                  pursuant to

                                      112
<PAGE>

                  clause fifth of this Section 5.01(b)(ii) and (y) the Class M-5
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class M-5 Certificates, until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  SEVENTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii) and to
                  the Holders of the Class M-5 Certificates pursuant to clause
                  sixth of this Section 5.01(b)(ii) and (y) the Class M-6
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class M-6 Certificates, until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  EIGHTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(b)(ii) and to the Holders of the Class
                  M-6 Certificates pursuant to clause seventh of this Section
                  5.01(b)(ii) and (y) the Class M-7 Principal Distribution
                  Amount, shall be distributed to the Holders of the Class M-7
                  Certificates, until the Certificate Principal Balance of such
                  Class has been reduced to zero;

                  NINTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(b)(ii), to the Holders of the Class M-6
                  Certificates pursuant to clause seventh of this Section
                  5.01(b)(ii) and to the Holders of the Class M-7 Certificates
                  pursuant to clause eighth of this Section 5.01(b)(ii) and (y)
                  the Class B-1 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class B-1 Certificates,
                  until the Certificate Principal Balance of such Class has been
                  reduced to zero;

                  TENTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates

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<PAGE>

                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(b)(ii), to the Holders of the Class M-6
                  Certificates pursuant to clause seventh of this Section
                  5.01(b)(ii), to the Holders of the Class M-7 Certificates
                  pursuant to clause eighth of this Section 5.01(b)(ii) and to
                  the Holders of the Class B-1 Certificates pursuant to clause
                  ninth of this Section 5.01(b)(ii) and (y) the Class B-2
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class B-2 Certificates, until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  ELEVENTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(b)(ii), to the Holders of the Class M-6
                  Certificates pursuant to clause seventh of this Section
                  5.01(b)(ii), to the Holders of the Class M-7 Certificates
                  pursuant to clause eighth of this Section 5.01(b)(ii), to the
                  Holders of the Class B-1 Certificates pursuant to clause ninth
                  of this Section 5.01(b)(ii) and to the Holders of the Class
                  B-2 Certificates pursuant to clause tenth of this Section
                  5.01(b)(ii) and (y) the Class B-3 Principal Distribution
                  Amount, shall be distributed to the Holders of the Class B-3
                  Certificates, until the Certificate Principal Balance of such
                  Class has been reduced to zero;

                  TWELFTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(b)(ii), to the Holders of the Class M-6
                  Certificates pursuant to clause seventh of this Section
                  5.01(b)(ii), to the Holders of the Class M-7 Certificates
                  pursuant to clause eighth of this Section 5.01(b)(ii), to the
                  Holders of the Class B-1 Certificates pursuant to clause ninth
                  of this Section 5.01(b)(ii), to the Holders of the Class B-2
                  Certificates pursuant to clause tenth of this Section
                  5.01(b)(ii) and to the Holders of the Class B-3 Certificates
                  pursuant to clause eleventh of this Section 5.01(b)(ii) and
                  (y) the Class B-4 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class B-4

                                      114
<PAGE>

                  Certificates, until the Certificate Principal Balance of such
                  Class has been reduced to zero; and

                  THIRTEENTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(b)(ii), to the Holders of the Class M-6
                  Certificates pursuant to clause seventh of this Section
                  5.01(b)(ii), to the Holders of the Class M-7 Certificates
                  pursuant to clause eighth of this Section 5.01(b)(ii), to the
                  Holders of the Class B-1 Certificates pursuant to clause ninth
                  of this Section 5.01(b)(ii), to the Holders of the Class B-2
                  Certificates pursuant to clause tenth of this Section
                  5.01(b)(ii), to the Holders of the Class B-3 Certificates
                  pursuant to clause eleventh of this Section 5.01(b)(ii) and to
                  the Holders of the Class B-4 Certificates pursuant to clause
                  twelfth of this Section 5.01(b)(ii) and (y) the Class B-5
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class B-5 Certificates until the Certificate
                  Principal Balance of such Class has been reduced to zero.

                  (c) On each Distribution Date, the Securities Administrator
shall withdraw any amounts then on deposit in the Distribution Account that
represent Prepayment Charges and shall distribute such amounts to the Class P
Certificateholders as described above.

                  (d) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 5.01(f) or
Section 10.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Certificates having an
initial aggregate Certificate Principal Balance that is in excess of the lesser
of (i) $5,000,000 or (ii) two-thirds of the initial Certificate Principal
Balance of such Class of Certificates, or otherwise by check mailed by first
class mail to the address of such Holder appearing in the Certificate Register.
The final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the Corporate Trust Office
of the Securities Administrator or such other location specified in the notice
to Certificateholders of such final distribution.

                  Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal

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procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. None of the
Trustee, the Depositor, the Servicer, the Securities Administrator or the Master
Servicer shall have any responsibility therefor except as otherwise provided by
this Agreement or applicable law.

                  (e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee, the
Servicer, the Securities Administrator or the Master Servicer shall in any way
be responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.

                  (f) Except as otherwise provided in Section 10.01, whenever
the Securities Administrator expects that the final distribution with respect to
any Class of Certificates will be made on the next Distribution Date, the
Securities Administrator shall, no later than three (3) days before the related
Distribution Date, mail to each Holder on such date of such Class of
Certificates a notice to the effect that:

                           (i) the Securities Administrator expects that the
                           final distribution with respect to such Class of
                           Certificates will be made on such Distribution Date
                           but only upon presentation and surrender of such
                           Certificates at the office of the Securities
                           Administrator therein specified, and

                           (ii) no interest shall accrue on such Certificates
                           from and after the end of the related Interest
                           Accrual Period.

                  Any funds not distributed to any Holder or Holders of
Certificates of such Class 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 by the Securities Administrator 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 5.01(f) 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 but shall continue to hold any remaining funds for the benefit of
non-tendering Certificateholders. The costs and expenses of maintaining the
funds in trust and of contacting such Certificateholders shall be paid out of
the assets remaining in such trust fund. 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

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Administrator as a result of such Certificateholder's failure to surrender its
Certificate(s) on the final Distribution Date for final payment thereof in
accordance with this Section 5.01(f). Any such amounts held in trust by the
Securities Administrator shall be held uninvested in an Eligible Account.

                  (g) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate, a
Mezzanine Certificate or a Class B Certificate be reduced more than once in
respect of any particular amount both (a) allocated to such Certificate in
respect of Realized Losses pursuant to Section 5.04 and (b) distributed to the
Holder of such Certificate in reduction of the Certificate Principal Balance
thereof pursuant to this Section 5.01 from Net Monthly Excess Cashflow and (ii)
in no event shall the Uncertificated Balance of a REMIC Regular Interest be
reduced more than once in respect of any particular amount both (a) allocated to
such REMIC Regular Interest in respect of Realized Losses pursuant to Section
5.04 and (b) distributed on such REMIC Regular Interest in reduction of the
Uncertificated Balance thereof pursuant to this Section 5.01.

                  SECTION 5.02. Statements to Certificateholders.

                  On each Distribution Date, the Securities Administrator (based
on the information set forth in the Servicer Reports for such Distribution Date
and information provided by the Trustee or the counterparty to the Cap Contract
with respect to payments made pursuant to the Cap Contract) shall make available
to each Holder of the Certificates, a statement 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 Certificates of each Class
         allocable to principal, and the amount of the distribution made on such
         Distribution Date to the Holders of the Class P Certificates allocable
         to Prepayment Charges;

                           (ii) the amount of the distribution made on such
         Distribution Date to the Holders of the Certificates of each Class
         allocable to interest;

                           (iii) the aggregate Servicing Fee received by the
         Servicer, RMC and RMAE and Master Servicing Fee received by the Master
         Servicer during the related Due Period;

                           (iv) the aggregate amount of P&I Advances for such
         Distribution Date;

                           (v) Reserved;

                           (vi) the number, aggregate principal balance,
         weighted average remaining term to maturity and weighted average
         Mortgage Rate of the Mortgage Loans as of the related Due Date;

                           (vii) the number and aggregate unpaid principal
         balance of Mortgage Loans (a) delinquent 30 to 59 days, (b) delinquent
         60 to 89 days, (c) delinquent 90 or more days, in each case, as of the
         last day of the preceding calendar month, (d) as to which foreclosure
         proceedings have been commenced and (e) with respect to which the

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         related Mortgagor has filed for protection under applicable bankruptcy
         laws, with respect to whom bankruptcy proceedings are pending or with
         respect to whom bankruptcy protection is in force;

                           (viii) with respect to any Mortgage Loan that became
         an REO Property during the preceding calendar month, the loan number of
         such Mortgage Loan, the unpaid principal balance and the Scheduled
         Principal Balance of such Mortgage Loan;

                           (ix) if available, the book value of any REO Property
         as of the close of business on the last Business Day of the calendar
         month preceding the Distribution Date;

                           (x) the aggregate amount of Principal Prepayments
         made during the related Prepayment Period and the aggregate amount of
         any Prepayment Charges received in respect thereof;

                           (xi) the aggregate amount of Realized Losses incurred
         during the related Prepayment Period and the aggregate amount of
         Realized Losses incurred since the Closing Date;

                           (xii) the aggregate amount of Extraordinary Trust
         Fund Expenses withdrawn from the Distribution Account for such
         Distribution Date;

                           (xiii) the aggregate Certificate Principal Balance of
         each Class of Certificates, after giving effect to the distributions,
         and allocations of Realized Losses, made on such Distribution Date,
         separately identifying any reduction thereof due to allocations of
         Realized Losses;

                           (xiv) the Certificate Factor for each such Class of
         Certificates applicable to such Distribution Date;

                           (xv) the Interest Distribution Amount in respect of
         the Class A Certificates, the Mezzanine Certificates, the Class B
         Certificates, and the Class CE Certificates for such Distribution Date
         and the Interest Carry Forward Amount, if any, with respect to the
         Class A Certificates, the Mezzanine Certificates and the Class B
         Certificates on such Distribution Date, and in the case of the Class A
         Certificates, the Mezzanine Certificates and the Class B Certificates
         separately identifying any reduction thereof due to allocations of
         Realized Losses, Prepayment Interest Shortfalls, Relief Act Interest
         Shortfalls and Net WAC Rate Carryover Amounts;

                           (xvi) the aggregate amount of any Prepayment Interest
         Shortfall for such Distribution Date, to the extent not covered by
         payments by the Servicer pursuant to Section 3.22 of this Agreement or
         the Master Servicer pursuant to Section 4.18 of this Agreement or RMC
         or RMAE pursuant to the Servicing Agreement;

                           (xvii) the aggregate amount of Relief Act Interest
         Shortfalls for such Distribution Date;

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                           (xviii) the Required Overcollateralization Amount and
         the Credit Enhancement Percentage for such Distribution Date;

                           (xix) the Overcollateralization Increase Amount, if
         any, for such Distribution Date;

                           (xx) the Overcollateralization Reduction Amount, 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 Contract;

                           (xxiii) the respective Pass-Through Rates applicable
         to the Class A Certificates, the Mezzanine Certificates, the Class B
         Certificates, and the Class CE Certificates for such Distribution Date;

                           (xxiv) the amount of any deposit to the Reserve Fund
         contemplated by Section 3.24(b);

                           (xxv) the balance of the Reserve Fund prior to the
         deposit or withdrawal of any amounts on such Distribution Date;

                           (xxvi) the amount of any deposit to the Reserve Fund
         pursuant to Section 5.01(a)(5)(vi);

                           (xxvii) the balance of the Reserve Fund after all
         deposits and withdrawals on such Distribution Date;

                           (xxviii) the Loss Severity Percentage with respect to
         each Mortgage Loan;

                           (xxix) the Aggregate Loss Severity Percentage; and

                           (xxx) the Insured Certificate Deficiency Amount and
         the Policy Payment for such Distribution Date.

                  The Securities Administrator will make such statement (and, at
its option, any additional files containing the same information in an
alternative format) available each month to the Certificateholders 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 options are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Securities Administrator shall have the
right to change the way such statements are distributed in order to make such

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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.

                  In the case of information furnished pursuant to subclauses
(i) and (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 upon request to each
Person who at any time during the calendar year was a Holder of a Regular
Certificate a statement containing the information set forth in subclauses (i)
through (iii) 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 upon request 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, as applicable, 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 5.03. Servicer Reports; P&I Advances.

                  (a) On the Business Day following each Determination Date, the
Servicer shall deliver to the Master Servicer and the Securities Administrator
by telecopy or electronic mail (or by such other means as the Servicer, the
Master Servicer and the Securities Administrator may agree from time to time) a
Servicer Report with respect to the Litton Mortgage Loans and the related
Distribution Date, in a form mutually acceptable to the Servicer, the Master
Servicer and the Securities Administrator. On the same date, the Servicer shall
electronically transmit to the Master Servicer and the Securities Administrator,
a data file containing the information set forth in such Servicer Report with
respect to the related Distribution Date. Such Servicer Report shall include (i)
the amount of P&I Advances to be made by the Servicer in respect of the related
Distribution Date, the aggregate amount of P&I Advances outstanding after giving
effect to such P&I Advances, and the aggregate amount of Nonrecoverable P&I
Advances in respect of such Distribution Date and (ii) such other information
with respect to the Litton Mortgage Loans as the Securities Administrator may

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reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 5.01 and to prepare the statements to
Certificateholders contemplated by Section 5.02. The Securities Administrator
shall not be responsible to recompute, recalculate or verify any information
provided to it by the Servicer.

                  (b) The amount of P&I Advances to be made by the Servicer on
any Distribution Date shall equal, subject to Section 5.03(d), (i) the aggregate
amount of Monthly Payments (net of the related Servicing Fees), due during the
related Due Period in respect of the Mortgage Loans serviced by such Servicer,
which Monthly Payments were delinquent as of the close of business on the
related Determination Date and (ii) with respect to each REO Property, which was
acquired during or prior to the related Prepayment Period and as to which an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the REO Imputed Interest on such REO Property for the
most recently ended calendar month, over the net income from such REO Property
deposited in the Collection Account pursuant to Section 3.21 of this Agreement
for distribution on such Distribution Date; provided, however, the Servicer
shall not be required to make P&I Advances with respect to Relief Act Interest
Shortfalls, or with respect to Prepayment Interest Shortfalls in excess of its
obligations under Section 3.22. The Servicer will not make any advances with
respect to simple interest loans and shall not make any advances with respect to
the principal portion of the Monthly Payments that would have been due on the
related Due Date with respect to REO Properties and will not advance principal
payments with respect to any second lien Mortgage Loans.

                  By 3:00 p.m. New York time on the Servicer Remittance Date,
the Servicer shall remit in immediately available funds to the Securities
Administrator for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Litton
Mortgage Loans for the related Distribution Date either (i) from its own funds
or (ii) from the Collection Account, to the extent of any Amounts Held For
Future Distribution on deposit therein (in which case it will cause to be made
an appropriate entry in the records of the Collection Account that Amounts Held
For Future Distribution have been, as permitted by this Section 5.03, used by
the Servicer in discharge of any such P&I Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of P&I Advances to be
made by the Servicer with respect to the Litton Mortgage Loans. In addition, the
Servicer shall have the right to reimburse itself for any outstanding P&I
Advance made from its own funds from Amounts Held for Future Distribution. Any
Amounts Held For Future Distribution used by the Servicer to make P&I Advances
or to reimburse itself for outstanding P&I Advances shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the Collection Account no later than the close of business on the Servicer
Remittance Date immediately following the Due Period or Prepayment Period for
which such amounts relate. The Securities Administrator will notify the Servicer
and the Master Servicer by the close of business on the Business Day prior to
the Distribution Date in the event that the amount remitted by the Servicer to
the Securities Administrator on such date is less than the P&I Advances required
to be made by the Servicer for the related Distribution Date.

                  (c) The obligation of the Servicer to make such P&I Advances
is mandatory, notwithstanding any other provision of this Agreement but subject
to (d) below, and, with respect to any Litton Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from the Trust Fund pursuant to any applicable provision of
this Agreement, except as otherwise provided in this Section.

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                  (d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, respectively.
The determination by the Servicer that it has made a Nonrecoverable P&I Advance
or a Nonrecoverable Servicing Advance or that any proposed P&I Advance or
Servicing Advance, if made, would constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively, shall be evidenced by a
certification of a Servicing Officer delivered to the Master Servicer.

                  (e) Subject to and in accordance with the provisions of
Article VIII, in the event the Servicer fails to make any required P&I Advance,
then the Master Servicer (in its capacity as successor servicer) or any other
successor Servicer shall be required to make such P&I Advance on the
Distribution Date on which the Servicer was required to make such Advance,
subject to its determination of recoverability. In addition, in the event that
RMC or RMAE fails to make a required P&I Advance under the Servicing Agreement,
the Master Servicer will be required to make such P&I Advance, subject to its
determination of recoverability.

                  SECTION 5.04. Allocation of Realized Losses.

                  (a) Prior to the Determination Date, the Servicer, RMC and
RMAE shall determine as to each Mortgage Loan serviced by the Servicer, RMC or
RMAE and any related REO Property and include in the monthly remittance report
provided to the Master Servicer and the Securities Administrator (substantially
in the form of Schedule 4 hereto) such information as is reasonably available to
the Servicer; RMC and RMAE as the Master Servicer or the Securities
Administrator may reasonably require so as to enable the Master Servicer to
master service the Mortgage Loans and oversee the servicing by the Servicer, RMC
and RMAE and the Securities Administrator to fulfill its obligations hereunder
with respect to securities and tax reporting, which shall include, but not be
limited to: (i) the total amount of Realized Losses, if any, incurred in
connection with any Final Recovery Determinations made during the related
Prepayment Period; and (ii) the respective portions of such Realized Losses
allocable to interest and allocable to principal. Prior to each Determination
Date, the Servicer, RMC and RMAE shall also determine as to each Mortgage Loan:
(i) the total amount of Realized Losses, if any, incurred in connection with any
Deficient Valuations made during the related Prepayment Period; and (ii) the
total amount of Realized Losses, if any, incurred in connection with Debt
Service Reductions in respect of Monthly Payments due during the related Due
Period.

                  (b) All Realized Losses on the Mortgage Loans allocated to any
REMIC I Regular Interest pursuant to Section 5.04(c) on the Mortgage Loans shall
be allocated by the Securities Administrator on each Distribution Date as
follows: first, to Net Monthly Excess Cashflow; second, to the Class CE
Certificates; third, to the Class B-5 Certificates until the Certificate
Principal Balance of the Class B-5 Certificates has been reduced to zero,
fourth, to the Class B-4 Certificates until the Certificate Principal Balance of
the Class B-4 Certificates has been reduced to zero, fifth, to the Class B-3
Certificates, until the Certificate Principal Balance of the Class B-3
Certificates has been reduced to zero; sixth, to the Class B-2 Certificates,
until the Certificate Principal Balance of the Class B-2 Certificates has been
reduced to zero; seventh, to the Class B-1 Certificates, until the Certificate
Principal Balance of the Class B-1 Certificates has been reduced to zero;
eighth, to the Class M-7 Certificates, until the Certificate Principal

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Balance of the Class M-7 Certificates has been reduced to zero; ninth, to the
Class M-6 Certificates, until the Certificate Principal Balance of the Class M-6
Certificates has been reduced to zero; tenth, to the Class M-5 Certificates,
until the Certificate Principal Balance of the Class M-5 Certificates has been
reduced to zero; eleventh, to the Class M-4 Certificates, until the Certificate
Principal Balance of the Class M-4 Certificates has been reduced to zero;
twelfth, to the Class M-3 Certificates, until the Certificate Principal Balance
of the Class M-3 Certificates has been reduced to zero; thirteenth, to the Class
M-2 Certificates, until the Certificate Principal Balance of the Class M-2
Certificates has been reduced to zero; and fourteenth, to the Class M-1
Certificates, until the Certificate Principal Balance of the Class M-1
Certificates has been reduced to zero. All Realized Losses to be allocated to
the Certificate Principal Balances of all Classes on any Distribution Date shall
be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate Principal Balance of any
Class of Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any Realized Losses, in each case to be allocated to such Class of
Certificates, on such Distribution Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
or Class B Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated; any allocation
of Realized Losses to a Class CE Certificates shall be made by reducing the
amount otherwise payable in respect thereof pursuant to Section
5.01(a)(5)(viii). No allocations of any Realized Losses shall be made to the
Certificate Principal Balances of the Class A Certificates or Class P
Certificates.

                  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 addition, in the event that the Servicer receives any
Subsequent Recoveries with respect to a Litton Mortgage Loan, the Servicer shall
deposit such funds into the Collection Account pursuant to Section 3.08. If,
after taking into account such Subsequent Recoveries and any Subsequent
Recoveries received by RMC and RMAE, the amount of a Realized Loss is reduced,
the amount of such Subsequent Recoveries will be applied to increase the
Certificate Principal Balance of the Class of Subordinate Certificates with the
highest payment priority to which Realized Losses have been allocated, but not
by more than the amount of Realized Losses previously allocated to that Class of
Subordinate Certificates pursuant to this Section 5.04 and not previously
reimbursed to such Class of Subordinate Certificates with Net Monthly Excess
Cashflow pursuant to Section 5.01(a)(5). The amount of any remaining Subsequent
Recoveries will be applied to sequentially increase the Certificate Principal
Balance of the Subordinate Certificates, beginning with the Class of Subordinate
Certificates with the next highest payment priority, up to the amount of such
Realized Losses previously allocated to such Class of Subordinate Certificates
pursuant to this Section 5.04 and not previously reimbursed to such Class of
Subordinate Certificates with Net Monthly Excess Cashflow pursuant to Section
5.01(a)(5)(iii). 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

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Distribution Date on which such increase occurs. Any such increases shall be
applied to the Certificate Principal Balance of each Subordinate Certificate of
such Class in accordance with its respective Percentage Interest.

                  (c) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee, based solely on the instructions of the Securities
Administrator, on each Distribution Date to the following REMIC I Regular
Interests in the specified percentages, as follows: first, to Uncertificated
Interest payable to the REMIC I Regular Interest I-LTAA and REMIC I Regular
Interest I-LTZZ up to an aggregate amount equal to the REMIC I Interest Loss
Allocation Amount, 98.00% and 2.00%, respectively; second, to the Uncertificated
Balances of the REMIC I Regular Interest I-LTAA and REMIC I Regular Interest
I-LTZZ up to an aggregate amount equal to the REMIC I Principal Loss Allocation
Amount, 98.00% and 2.00%, respectively; third, to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTB5 and REMIC I
Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTB5 has been reduced to
zero; fourth, to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTB4 and REMIC I Regular Interest I-LTZZ, 98.00%,
1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC I
Regular Interest I-LTB4 has been reduced to zero; fifth, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTB3 and
REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until
the Uncertificated Balance of REMIC I Regular Interest I-LTB3 has been reduced
to zero; sixth, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTB2 and REMIC I Regular Interest I-LTZZ,
98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC
I Regular Interest I-LTB2 has been reduced to zero; seventh, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTB1 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTB1 has been reduced to zero; eighth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM7 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM7 has been reduced to zero; ninth, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM6 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM6 has been reduced to zero; tenth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM5 has been reduced to zero; eleventh,
to the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I
Regular Interest I-LTM4 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and
1.00%, respectively, until the Uncertificated Balance of REMIC I Regular
Interest I-LTM4 has been reduced to zero; twelfth, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3 and
REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until
the Uncertificated Balance of REMIC I Regular Interest I-LTM3 has been reduced
to zero; thirteenth, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTM2 and REMIC I Regular Interest I-LTZZ,
98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC
I Regular Interest I-LTM2 has been reduced to zero; and fourteenth, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM1 and REMIC I Regular Interest I-LTZZ, 98.00%,

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1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC I
Regular Interest I-LTM1 has been reduced to zero.

                  SECTION 5.05. 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 reasonably believes 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 5.06. Reports Filed with Securities and Exchange
Commission.

                  The Depositor shall prepare or cause to be prepared the
initial current report on Form 8-K. Within 15 days after each Distribution Date,
the Securities Administrator shall, in accordance with industry standards, file
with the Commission via the Electronic Data Gathering and Retrieval System
("EDGAR"), a Form 8-K (or other comparable Form containing the same or
comparable information or other information mutually agreed upon) with a copy of
the statement to be furnished to the Certificateholders for such Distribution
Date as an exhibit thereto. Prior to January 30, 2005, the Securities
Administrator shall, in accordance with industry standards, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to (i)
March 20, 2005 and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, prior to March 20th of each year thereafter, the Master Servicer
shall provide the Securities Administrator with a Master Servicer Certification,
together with a copy of the annual independent accountant's servicing report and
annual statement of compliance of the Servicer, RMC and RMAE to be delivered
pursuant to this Agreement or the Servicing Agreement and, if applicable, the
annual independent accountant's servicing report and annual statement of
compliance to be delivered by the Master Servicer pursuant to Sections 4.15 and
4.16. Prior to (i) March 31, 2005 and (ii) unless and until a Form 15 Suspension
Notice shall have been filed, March 31 of each year thereafter, the Securities
Administrator shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust. Such Form 10-K shall include the Master
Servicer Certification and other documentation provided by the Master Servicer
pursuant to the second preceding sentence. The Depositor hereby grants to the
Securities Administrator a limited power of attorney to execute and file each
such document on behalf of the Depositor. Such power of attorney shall continue
until either the earlier of (i) receipt by the Securities Administrator from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Depositor agrees to promptly furnish to the
Securities Administrator, from time to time upon request, such further
information, reports and financial statements within its control related to this
Agreement, the Mortgage Loans as the Securities Administrator reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Securities Administrator shall have no responsibility to file any items other
than those specified in this Section 5.06; provided, however, the Securities
Administrator will cooperate with the Depositor in connection with any
additional filings with respect to the Trust Fund as the Depositor deems
necessary under the Securities Exchange Act of 1934, as

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amended (the "Exchange Act"). Fees and expenses incurred by the Securities
Administrator in connection with this Section 5.06 shall not be reimbursable
from the Trust Fund.

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                                   ARTICLE VI

                                THE CERTIFICATES

                  SECTION 6.01. The Certificates.

                  (a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I.

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-6. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

                  Upon original issue, the Certificates shall be executed and
authenticated by the Securities Administrator and delivered by the Trustee to
and upon the written order of the Depositor. The Certificates shall be executed
by manual or facsimile signature on behalf of the Trust by the Securities
Administrator by an authorized signatory. Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Securities Administrator shall bind the Trust, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
herein executed by the Securities Administrator by manual signature, and such
certificate of authentication 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) The Class A Certificates, Mezzanine Certificates and Class
B Certificates shall initially be issued as one or more Certificates held by the
Book-Entry Custodian or, if appointed to hold such Certificates as provided
below, the Depository and registered in the name of the Depository or its
nominee and, except as provided below, registration of such Certificates may not
be transferred by the Securities Administrator except to another Depository that
agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to such Certificates through the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to definitive, fully registered Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall only transfer the Ownership Interests in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures. The Securities Administrator is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and, if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Servicer and, if the Trustee is not the
Book-Entry Custodian, the Trustee, any other transfer agent (including the

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Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Securities
Administrator resigns or is removed in accordance with the terms hereof, the
successor Securities Administrator or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.

                  (c) The Class B 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 6.02. 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 6.02. 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) The Class CE Certificates and Class P Certificates offered
and sold to Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A
under the Securities Act ("Rule 144A") will be issued in the form of Definitive
Certificates.

                  (e) The Trustee, the Servicer, the Securities Administrator,
the Master Servicer and the Depositor may for all purposes (including the making
of payments due on the Book-Entry Certificates and Global Certificates) deal
with the Depository as the authorized representative of the Certificate Owners
with respect to the Book-Entry Certificates and Global Certificates for the
purposes of exercising the rights of Certificateholders hereunder. The rights of
Certificate Owners with respect to the Book-Entry Certificates and Global
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of the Book-Entry Certificates and Global
Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Securities Administrator may establish a reasonable record date in connection
with solicitations of consents from or voting by Certificateholders and shall
give notice to the Depository of such record date.

                  If (i)(A) the Depositor advises the Securities Administrator
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (B) the Depositor is unable to
locate a qualified successor, (ii) the Depositor at its option

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advises the Securities Administrator in writing that it elects to terminate the
book-entry system through the Depository or (iii) after the occurrence of a
Servicer Event of Default, Certificate Owners representing in the aggregate not
less than 51% of the Ownership Interests of the Book-Entry Certificates advise
the Securities Administrator through the Depository, in writing, that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Certificate Owners, the Securities Administrator shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. With respect to a Global Certificate, the related
Certificate Owner (other than a Holder of a Regulation S Temporary Global
Certificate) may request that its interest in a Global Certificate be exchanged
for a Definitive Certificate. Upon surrender to the Securities Administrator of
the Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, or the Global Certificates by the Depository accompanied by
registration instructions from the Depository for registration of transfer, the
Securities Administrator shall cause the Definitive Certificates to be issued.
Such Definitive Certificates will be issued in minimum denominations of $10,000
except that any beneficial ownership that was represented by a Book-Entry
Certificate, or a Global Certificate, as applicable in an amount less than
$10,000 immediately prior to the issuance of a Definitive Certificate shall be
issued in a minimum denomination equal to the amount represented by such
Book-Entry Certificate or a Global Certificate, as applicable. None of the
Depositor, the Servicer, the Master Servicer, the Securities Administrator or
the Trustee shall be liable for any delay in the delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Securities Administrator, to the extent
applicable with respect to such Definitive Certificates, and the Securities
Administrator shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.

                  SECTION 6.02. Registration of Transfer and Exchange of
Certificates.

                  (a) The Securities Administrator shall cause to be kept at one
of the offices or agencies to be appointed by the Securities Administrator in
accordance with the provisions of Section 9.11, a Certificate Register for the
Certificates 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.

                  (b) No transfer of any Class B Certificate, Class CE
Certificate, Class P Certificate or Residual Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and 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 a Class B Certificate, Class CE Certificate, Class
P Certificate or Residual Certificate is to be made without registration or
qualification (other than in connection with the initial transfer of any such
Certificate by the Depositor), the Securities Administrator shall require
receipt of: (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Certificateholder
desiring to effect the transfer and from such Certificateholder's prospective
transferee, substantially in the form attached hereto as Exhibit B-1; (ii) if
such transfer is purportedly being made in reliance upon Rule 501(a) under the
1933 Act, written certifications from the Certificateholder desiring to effect
the transfer and

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from such Certificateholder's prospective transferee, substantially in the form
attached hereto as Exhibit B-2; (iii) if such transfer is purportedly being made
in reliance on Regulation S, a written certification from the prospective
transferee, substantially in the form attached hereto as Exhibit B-1 and (iv) in
all other cases, an Opinion of Counsel satisfactory to 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 Master Servicer, the Securities
Administrator or the Servicer), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. Neither of the Depositor nor the Securities
Administrator is obligated to register or qualify any such Certificates under
the 1933 Act or any other securities laws or to take any action not otherwise
required under this Agreement to permit the transfer of such Certificates
without registration or qualification. Any Certificateholder desiring to effect
the transfer of any such Certificate shall, and does hereby agree to, indemnify
the Trustee, the Depositor, the Master Servicer, the Securities Administrator
and the 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.

                  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 B-1 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 B-1 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.

                  (c) No transfer of a Class CE Certificate, Class P Certificate
or a Residual Certificate or any interest therein shall be made to any Plan
subject to ERISA or Section 4975 of the Code, 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") unless the
Securities Administrator is provided with an Opinion of Counsel on which the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the Servicer may rely, which establishes to the satisfaction of the Securities
Administrator that the purchase of such 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
Servicer, the Trustee, the Master Servicer, the Securities Administrator 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 Servicer, the Trustee, the Master Servicer, the Securities Administrator,
the Trust Fund. An Opinion of Counsel will not 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 Securities Administrator shall be entitled to
conclusively rely upon a representation (which, upon the request of the
Securities Administrator, shall be a written representation) from the Depositor
of the status of such transferee as an affiliate of the Depositor.

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                  Each Transferee of a Mezzanine Certificate or Class B
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) in
the case of a Mezzanine Certificate or a Class B Certificate, other than a Class
B-5 Certificate, it has acquired and is holding such Certificate in reliance on
Prohibited Transaction Exemption ("PTE") 94-84 or FAN 97-03E, 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 and in the case of a Class B Certificate (other than a Class B-5
Certificate) that it will obtain a representation from any transferee that such
transferee is an accredited investor so long as it is required to obtain a
representation regarding compliance with the Securities Act 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 PTCE 95-60, and (iii)
the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.

                  If any Certificate or any interest therein is acquired or held
in violation of the conditions described in this Section 6.02(c), 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 certificate or interest therein was effected in violation of the conditions
described in this Section 6.02(c) shall indemnify and hold harmless the
Depositor, the Trustee, the Servicer, the Master Servicer, the Securities
Administrator and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.

                  (d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Securities
Administrator or its designee under clause (iii)(A) below to deliver payments to
a Person other than such Person and to negotiate the terms of any mandatory sale
under clause (iii)(B) below and to execute all instruments of Transfer and to do
all other things necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:

                           (A) Each Person holding or acquiring any Ownership
                  Interest in a Residual Certificate 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.

                           (B) In connection with any proposed Transfer of any
                  Ownership Interest in a Residual Certificate, the Trustee
                  shall require delivery to it, and shall not register the
                  Transfer of any Residual Certificate until its receipt of, an
                  affidavit and agreement (a "Transfer Affidavit and Agreement,"
                  in the form attached hereto as Exhibit B-3) from the proposed
                  Transferee, in form and substance satisfactory to the
                  Securities Administrator, representing and

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                  warranting, among other things, that such Transferee is a
                  Permitted Transferee, 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 that is not a Permitted Transferee, that for so long as
                  it retains its Ownership Interest in a Residual Certificate,
                  it will endeavor to remain a Permitted Transferee, and that it
                  has reviewed the provisions of this Section 6.02(d) and agrees
                  to be bound by them.

                           (C) Notwithstanding the delivery of a Transfer
                  Affidavit and Agreement by a proposed Transferee under clause
                  (B) above, if an authorized officer of the Securities
                  Administrator who is assigned to this transaction has actual
                  knowledge that the proposed Transferee is not a Permitted
                  Transferee, no Transfer of an Ownership Interest in a Residual
                  Certificate to such proposed Transferee shall be effected.

                           (D) Each Person holding or acquiring any Ownership
                  Interest in a Residual Certificate shall agree (x) to require
                  a Transfer Affidavit and Agreement from any other Person to
                  whom such Person attempts to transfer its Ownership Interest
                  in a Residual Certificate and (Y) not to transfer its
                  Ownership Interest unless it provides a Transferor Affidavit
                  (in the form attached hereto as Exhibit B-2) to the Securities
                  Administrator stating that, among other things, it has no
                  actual knowledge that such other Person is not a Permitted
                  Transferee.

                           (E) Each Person holding or acquiring an Ownership
                  Interest in a Residual Certificate, by purchasing an Ownership
                  Interest in such Certificate, agrees to give the Securities
                  Administrator written notice that it is a "pass-through
                  interest holder" within the meaning of temporary Treasury
                  regulation Section 1.67-3T(a)(2)(i)(A) immediately upon
                  acquiring an Ownership Interest in a Residual Certificate, if
                  it is, or is holding an Ownership Interest in a Residual
                  Certificate on behalf of, a "pass-through interest holder."

                           (ii) The Securities Administrator will register the
         Transfer of any Residual Certificate only if it shall have received the
         Transfer Affidavit and Agreement and all of such other documents as
         shall have been reasonably required by the Securities Administrator as
         a condition to such registration. In addition, no Transfer of a
         Residual Certificate shall be made unless the Securities Administrator
         shall have received a representation letter from the Transferee of such
         Certificate to the effect that such Transferee is a Permitted
         Transferee.

                           (iii) (A) If any purported Transferee shall become a
         Holder of a Residual Certificate in violation of the provisions of this
         Section 6.02(d), then the last preceding Permitted Transferee shall be
         restored, to the extent permitted by law, to all rights as holder
         thereof retroactive to the date of registration of such 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
         6.02(d) or for making any payments due on such Certificate to the
         holder thereof or for taking any other action with respect to such
         holder under the provisions of this Agreement.

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                           (B) If any purported Transferee shall become a holder
                  of a Residual Certificate in violation of the restrictions in
                  this Section 6.02(d) and to the extent that the retroactive
                  restoration of the rights of the holder of such Residual
                  Certificate as described in clause (iii)(A) above shall be
                  invalid, illegal or unenforceable, then the Securities
                  Administrator shall have the right, without notice to the
                  holder or any prior holder of such Residual Certificate, to
                  sell such Residual Certificate to a purchaser selected by the
                  Securities Administrator on such terms as the Securities
                  Administrator may choose. Such purported Transferee shall
                  promptly endorse and deliver each Residual Certificate in
                  accordance with the instructions of the Securities
                  Administrator. Such purchaser may be the Securities
                  Administrator itself or any Affiliate of the Securities
                  Administrator. The proceeds of such sale, net of the
                  commissions (which may include commissions payable to the
                  Securities Administrator or its Affiliates), expenses and
                  taxes due, if any, will be remitted by the Securities
                  Administrator to such purported Transferee. The terms and
                  conditions of any sale under this clause (iii)(B) shall be
                  determined in the sole discretion of the Securities
                  Administrator, and the Securities Administrator shall not be
                  liable to any Person having an Ownership Interest in a
                  Residual Certificate as a result of its exercise of such
                  discretion.

                           (iv) The Securities Administrator shall make
         available to the Internal Revenue Service and those Persons specified
         by the REMIC Provisions all information necessary to compute any tax
         imposed (A) as a result of the Transfer of an Ownership Interest in a
         Residual Certificate to any Person who is a Disqualified Organization,
         including the information described in Treasury regulations sections
         1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
         inclusions" of such Residual Certificate and (B) as a result of any
         regulated investment company, real estate investment trust, common
         trust fund, partnership, trust, estate or organization described in
         Section 1381 of the Code that holds an Ownership Interest in a Residual
         Certificate having as among its record holders at any time any Person
         which is a Disqualified Organization. Reasonable compensation for
         providing such information may be charged or collected by the
         Securities Administrator.

                           (v) The provisions of this Section 6.02(d) set forth
         prior to this subsection (v) may be modified, added to or eliminated,
         provided that there shall have been delivered to the Securities
         Administrator at the expense of the party seeking to modify, add to or
         eliminate any such provision the following:

                           (A) written notification from each Rating Agency to
                  the effect that the modification, addition to or elimination
                  of such provisions will not cause such Rating Agency to
                  downgrade its then-current ratings of any Class of; and

                           (B) an Opinion of Counsel, in form and substance
                  satisfactory to the Securities Administrator, to the effect
                  that such modification of, addition to or elimination of such
                  provisions will not cause any Trust REMIC to cease to qualify
                  as a REMIC and will not cause any Trust REMIC, as the case may
                  be, to be subject to an entity-level tax caused by the
                  Transfer of any Residual Certificate to a Person that is not a
                  Permitted Transferee or a Person other than the prospective

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<PAGE>

                  transferee to be subject to a REMIC-tax caused by the Transfer
                  of a Residual Certificate to a Person that is not a Permitted
                  Transferee.

                  (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.

                  (f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Securities
Administrator maintained for such purpose pursuant to Section 9.11. 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 transfer or exchange shall (if so required by the Securities
Administrator) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Securities Administrator duly executed
by, the Holder thereof or his attorney duly authorized in writing.

                  (g) No service charge to the Certificateholders shall be made
for any transfer or exchange of Certificates, 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.

                  (h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Securities Administrator in accordance
with its customary procedures.

                  SECTION 6.03. Mutilated, Destroyed, Lost or Stolen
Certificates.

                  If (i) any mutilated Certificate is surrendered to the
Securities Administrator, or the Securities Administrator receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof, and (ii) there is delivered to Securities Administrator such
security or indemnity as may be required by it to save it harmless, then, in the
absence of actual knowledge by 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 or stolen Certificate, a new
Certificate of the same Class and of like denomination and Percentage Interest.
Upon the issuance of any new Certificate under this Section, 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 (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
shall constitute complete and indefeasible evidence of ownership in the
applicable REMIC created hereunder, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.

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                  SECTION 6.04. Persons Deemed Owners.

                  The Depositor, the Servicer, the Trustee, the Master Servicer,
the Securities Administrator 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 4.01 and for all
other purposes whatsoever, and none of the Depositor, the Servicer, the Trustee,
the Master Servicer, the Securities Administrator or any agent of any of them
shall be affected by notice to the contrary.

                  SECTION 6.05. Certain Available Information.

                  On or prior to the date of the first sale of any Class B
Certificate, Class CE Certificate, Class P Certificate or Residual Certificate
to an Independent third party, the Depositor shall provide to the Securities
Administrator ten copies of any private placement memorandum or other disclosure
document used by the Depositor in connection with the offer and sale of such
Certificate. In addition, if any such private placement memorandum or disclosure
document is revised, amended or supplemented at any time following the delivery
thereof to the Securities Administrator, the Depositor promptly shall inform the
Securities Administrator of such event and shall deliver to the Securities
Administrator ten copies of the private placement memorandum or disclosure
document, as revised, amended or supplemented. The Securities Administrator
shall maintain at its office as set forth in Section 12.05 hereof and shall make
available free of charge during normal business hours for review by any Holder
of a Certificate or any Person identified to the Securities Administrator as a
prospective transferee of a Certificate, originals or copies of the following
items: (i) in the case of a Holder or prospective transferee of a Class B
Certificate, Class CE Certificate, Class P Certificate or Residual Certificate,
the related private placement memorandum or other disclosure document relating
to such Class of Certificates, in the form most recently provided to the
Securities Administrator; and (ii) in all cases, (A) this Agreement and any
amendments hereof entered into pursuant to Section 11.01, (B) all monthly
statements required to be delivered to Certificateholders of the relevant Class
pursuant to Section 4.02 since the Closing Date, and all other notices, reports,
statements and written communications delivered to the Certificateholders of the
relevant Class pursuant to this Agreement since the Closing Date and (C) any
copies of all Officers' Certificates of the Servicer since the Closing Date
delivered to the Master Servicer to evidence such Person's determination that
any P&I Advance or Servicing Advance was, or if made, would be a Nonrecoverable
P&I Advance or Nonrecoverable Servicing Advance. Copies and mailing of any and
all of the foregoing items will be available from the Securities Administrator
upon request at the expense of the Person requesting the same.

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                                  ARTICLE VII

               THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER

                  SECTION 7.01. Liability of the Depositor, the Servicer and the
Master Servicer.

                  The Depositor, the Servicer 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, Servicer and Master Servicer and undertaken hereunder by the
Depositor, the Servicer and the Master Servicer herein.

                  SECTION 7.02. Merger or Consolidation of the Depositor, the
Servicer or the Master Servicer.

                  Subject to the following paragraph, the Depositor will 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 Servicer will keep in full effect its existence, rights and franchises as a
limited partnership under the laws of the jurisdiction of its formation. Subject
to the following paragraph, the Master Servicer will keep in full effect its
existence, rights and franchises as a national banking association. The
Depositor, the Servicer and the Master Servicer each will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.

                  The Depositor, the Servicer 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, the Servicer or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, the Servicer or the Master Servicer, shall be the successor of the
Depositor, the Servicer 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, however, that any successor to the Servicer or the Master Servicer
shall meet the eligibility requirements set forth in clauses (i) and (iii) of
the last paragraph of Section 8.02(a) or Section 7.06, as applicable.

                  SECTION 7.03. Limitation on Liability of the Depositor, the
Servicer, the Master Servicer and Others.

                  None of the Depositor, the Servicer, the Securities
Administrator, the Master Servicer or any of the directors, officers, employees
or agents of the Depositor, the Servicer or the Master Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer, the Securities Administrator, the
Master Servicer or any such person against any breach of warranties,
representations or covenants made herein or against any specific liability
imposed on any such Person pursuant hereto or against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in

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the performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Servicer, the Securities Administrator, the
Master Servicer and any director, officer, employee or agent of the Depositor,
the Servicer, the Securities Administrator and the Master Servicer 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. The
Depositor, the Servicer, the Securities Administrator, the Master Servicer and
any director, officer, employee or agent of the Depositor, the Servicer, the
Securities Administrator or the Master Servicer 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 or the Certificates
or any loss, liability or expense incurred other than by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Servicer, the Securities Administrator or
the Master 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 and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor, the Servicer, the
Securities Administrator and the Master Servicer 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 Servicer, the Securities Administrator
and the Master Servicer shall be entitled to be reimbursed therefor from the
Collection Account or the Distribution Account as and to the extent provided in
Article III and Article IV, any such right of reimbursement being prior to the
rights of the Certificateholders to receive any amount in the Collection Account
and the Distribution Account.

                  Notwithstanding anything to the contrary contained herein, the
Servicer shall not be liable for any actions or inactions prior to the Cut-off
Date of any prior servicer of the Litton Mortgage Loans and the Master Servicer
shall not be liable for any action or inaction of either Servicer, RMC or RMAE,
except to the extent expressly provided herein.

                  SECTION 7.04. Limitation on Resignation of the Servicer.

                  (a) The 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 or as provided in Section
7.04(c). Any such determination pursuant to the preceding sentence permitting
the resignation (other than pursuant to Section 7.04(c)) of the Servicer shall
be evidenced by an Opinion of Counsel to such effect obtained at the expense of
the Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Servicer shall become effective until the Master Servicer or
a successor Servicer shall have assumed the Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement.

                  (b) Except as expressly provided herein, the Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties,

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covenants or obligations to be performed by the Servicer hereunder. The
foregoing prohibition on assignment shall not prohibit the Servicer from
designating a Sub-Servicer as payee of any indemnification amount payable to the
Servicer hereunder; provided, however, that as provided in Section 3.02, no
Sub-Servicer shall be a third-party beneficiary hereunder and the parties hereto
shall not be required to recognize any Sub-Servicer as an indemnitee under this
Agreement.

                  (c) The Trustee and the Depositor hereby specifically (i)
consent to the pledge and assignment by the Servicer of all of the Servicer's
right, title and interest in, to and under this Agreement to the Servicing
Rights Pledgee, for the benefit of certain lenders and (ii) provided that no
Servicer Event of Default exists, agree that upon delivery to the Master
Servicer, Trustee by the Servicing Rights Pledgee of a letter signed by the
Servicer whereunder the Servicer shall resign as Servicer under this Agreement,
the Trustee shall appoint the Servicing Rights Pledgee or its designee as
successor Servicer, provided that at the time of such appointment, the Servicing
Rights Pledgee or such designee meets the requirements of a successor Servicer
pursuant to Section 8.02(c)(2) hereof and agrees to be subject to the terms of
this Agreement. If, pursuant to any provision hereof, the duties of the Servicer
are transferred to a successor servicer, the entire amount of the Servicing Fee
and other compensation payable to the Servicer pursuant hereto shall thereafter
be payable to such successor servicer.

                  SECTION 7.05. 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 meeting the criteria specified in Section
7.06 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 7.06. 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 accept
in writing such assignment and delegation and assume the obligations of the
Master Servicer hereunder (a) shall have a net worth of not less than
$15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (b) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (c) 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

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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 out of acts or
omissions prior to the effective date thereof.

                  SECTION 7.07. Rights of the Depositor in Respect of the
Servicer and the Master Servicer.

                  Each of the Master Servicer and the Servicer shall afford (and
any Sub-Servicing Agreement shall provide that each Sub-Servicer shall afford)
the Depositor and the Trustee, upon reasonable notice, during normal business
hours, access to all records maintained by the Master Servicer or the Servicer
(and any such Sub-Servicer) in respect of the Servicer's rights and obligations
hereunder and access to officers of the Master Servicer or the Servicer (and
those of any such Sub-Servicer) responsible for such obligations, and the Master
Servicer shall have access to all such records maintained by the Servicer and
any Sub-Servicers. Upon request, each of the Master Servicer and the Servicer
shall furnish to the Depositor and the Trustee its (and any such Sub-Servicer's)
most recent financial statements (or, in the case of the Servicer, the most
recent financial statements of the consolidated group that includes the
Servicer) and such other information relating to the Master Servicer's or the
Servicer's capacity to perform its obligations under this Agreement as it
possesses (and that any such Sub-Servicer 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 or the Servicer's written consent,
except as required pursuant to this Agreement or to the extent that it is
appropriate to do so (i) to its legal counsel, auditors, taxing authorities or
other governmental agencies and the Certificateholders, (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor and the Trustee
or the Trust Fund, and in any case, the Depositor or the Trustee, (iii)
disclosure of any and all information that is or becomes publicly known, or
information obtained by the Trustee from sources other than the Depositor, the
Servicer or the Master Servicer, (iv) disclosure as required pursuant to this
Agreement or (v) disclosure of any and all information (A) in any preliminary or
final offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by the Agreement approved in advance
by the Depositor, the Servicer or the Master Servicer or (B) to any affiliate,
independent or internal auditor, agent, employee or attorney of the Trustee
having a need to know the same, provided that the Trustee advises such recipient
of the confidential nature of the information being disclosed, shall use its
best efforts to assure the confidentiality of any such disseminated non-public
information. Nothing in this Section 7.07 shall limit the obligation of the
Servicer to comply with any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section 7.07 as a result of such obligation shall not
constitute a breach of this Section. Nothing in this Section 7.07 shall require
the Servicer to collect, create, collate or otherwise generate any information
that it does not generate in its usual course of business. The Servicer shall
not be required to make copies of or ship documents to any party unless
provisions have been made for the reimbursement of the costs thereof. The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer and the Servicer under this

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Agreement and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Master Servicer or the Servicer under
this Agreement or exercise the rights of the Master Servicer or the Servicer
under this Agreement; provided that neither the Master Servicer nor the Servicer
shall 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 or the Servicer and is not obligated to supervise the performance of
the Master Servicer or the Servicer under this Agreement or otherwise.

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                                  ARTICLE VIII

                                     DEFAULT

                  SECTION 8.01. Servicer Events of Default.

                  (a) "Servicer Event of Default," wherever used herein, means
any one of the following events:

                           (i) any failure by the Servicer to remit to the
         Securities Administrator for distribution to the Certificateholders any
         payment (other than a P&I Advance required to be made from its own
         funds on any Servicer Remittance Date pursuant to Section 5.03)
         required to be made by the Servicer under the terms of the Certificates
         and this Agreement which continues unremedied for a period of one
         Business Day after the date upon which written notice of such failure,
         requiring the same to be remedied, shall have been given to the
         Servicer by the Depositor or the Trustee (in which case notice shall be
         provided by telecopy), or to the Servicer, the Depositor, the Trustee
         and by the Holders of Certificates entitled to at least 25% of the
         Voting Rights; or

                           (ii) any failure on the part of the Servicer duly to
         observe or perform in any material respect any other of the covenants
         or agreements on the part of the Servicer contained in this Agreement,
         or the material breach by the Servicer of any representation and
         warranty contained in Section 2.05, 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 Servicer by the Depositor or the Trustee or to the Servicer, the
         Depositor and the Trustee by the Holders of Certificates entitled to at
         least 25% of the Voting Rights; provided, however, that in the case of
         a failure that cannot be cured within thirty (30) days, the cure period
         may be extended for an additional thirty (30) days if the Servicer can
         demonstrate to the reasonable satisfaction of the Trustee that the
         Servicer is diligently pursuing remedial action; 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 Servicer and such decree or order shall have
         remained in force undischarged or unstayed for a period of 90 days; or

                           (iv) the 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 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;

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                           (vi) failure by the Servicer to duly perform, within
         the required time period, its obligations under Section 3.17, 3.18 or
         3.19 which failure continues unremedied for a period of thirty (30)
         days after the date on which written notice of such failure, requiring
         the same to be remedied, shall have been given to the Servicer by any
         party to this Agreement; or

                           (vii) any failure of the Servicer to make any P&I
         Advance on any Servicer Remittance Date required to be made from its
         own funds pursuant to Section 5.03 which continues unremedied until
         3:00 p.m. New York time on the Business Day immediately following the
         Servicer Remittance Date.

                  If a Servicer Event of Default described in clauses (i)
through (vi) of this Section shall occur, then, and in each and every such case,
so long as such 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 entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the Servicer (and to the Depositor if given by the Trustee
or to the Trustee if given by the Depositor) with a copy to the Master Servicer
and each Rating Agency, terminate all of the rights and obligations of the
Servicer in its capacity as the Servicer under this Agreement, to the extent
permitted by law, and in and to the Litton Mortgage Loans and the proceeds
thereof. If a Servicer Event of Default described in clause (vii) hereof shall
occur, the Trustee shall, by notice in writing to the Servicer, the Depositor
and the Master Servicer, terminate all of the rights and obligations of the
Servicer in its capacity as a Servicer under this Agreement and in and to the
Litton Mortgage Loans and the proceeds thereof. Subject to Section 8.02, on or
after the receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Litton Mortgage
Loans or otherwise, shall pass to and be vested in the Master Servicer pursuant
to and under this Section, and, without limitation, the Master Servicer is
hereby authorized and empowered, as attorney-in-fact or otherwise, to execute
and deliver, on behalf of and at the expense of the Servicer, 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 Litton
Mortgage Loans and related documents, or otherwise. The Servicer agrees promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Master Servicer with all documents and records requested by it to
enable it to assume the Servicer's functions under this Agreement, and to
cooperate with the Master Servicer in effecting the termination of the
Servicer's responsibilities and rights under this Agreement, including, without
limitation, the transfer within one Business Day to the Master Servicer for
administration by it of all cash amounts which at the time shall be or should
have been credited by the Servicer to the Collection Account held by or on
behalf of the Servicer or thereafter be received with respect to the Litton
Mortgage Loans or any related REO Property (provided, however, that the 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 P&I Advances, Servicing Advances, accrued and unpaid Servicing Fees
or otherwise, and shall continue to be entitled to the benefits of Section 7.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 8.01(a), the Trustee shall not
be deemed to have knowledge of a 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

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Servicer Event of Default is received by the Trustee at its Corporate Trust
Office and such notice references the Certificates, the Trust or this Agreement.
The Trustee shall promptly notify the Master Servicer and the Rating Agencies of
the occurrence of a Servicer Event of Default of which it has knowledge as
provided above.

                  The Master Servicer shall be entitled to be reimbursed by the
Servicer (or from amounts on deposit in the Distribution Account if the Servicer
is unable to fulfill its obligations hereunder) for all reasonable out-of-pocket
or third party costs associated with the transfer of servicing from the
Servicer, including without limitation, any reasonable out-of-pocket or third
party costs or expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Master Servicer to correct any errors or insufficiencies
in the servicing data or otherwise to enable the Master Servicer to service the
Litton Mortgage Loans properly and effectively, upon presentation of reasonable
documentation of such costs and expenses. The Servicer shall be responsible for
the costs set forth in this paragraph with respect to one servicing transfer.

                  (b) "Master Servicer Event of Default," wherever used herein,
means any one of the following events:

                           (i) 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 2.04, 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 entitled to at least 25% of the Voting Rights; or

                           (ii) 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

                           (iii) 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

                           (iv) 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.

                  If a Master Servicer Event of Default 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 entitled

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to at least 51% of Voting Rights, 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 Depositor) with a copy to each Rating Agency, terminate all of
the rights and obligations of the Master Servicer in its capacity as Master
Servicer under this Agreement, to the extent permitted by law, and in and to the
Mortgage 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
under this Agreement, whether with respect to the Certificates (other than as a
Holder of any Certificate) or the Mortgage Loans or otherwise including, without
limitation, the compensation payable to the Master Servicer under this
Agreement, 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, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer 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 functions under this Agreement, and to cooperate with the
Trustee in effecting the termination of the Master Servicer'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 and shall
continue to be entitled to the benefits of Section 7.03, notwithstanding any
such termination, with respect to events occurring prior to such termination).
For purposes of this Section 8.01(b), 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.

                  To the extent that the costs and expenses of the Trustee
related to the termination of the Master Servicer, appointment of a successor
Master Servicer or the transfer and assumption of the master servicing by the
Trustee (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 Master Servicer as a result of a Master Servicer Event of
Default and (ii) all costs and expenses associated with the complete transfer of
the master 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 Master Servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
Master Servicer to master service the Mortgage Loans in accordance with this
Agreement) are not fully and timely reimbursed by the terminated Master
Servicer, the Trustee shall be entitled to reimbursement of such costs and
expenses from the Distribution Account.

                  SECTION 8.02. Master Servicer to Act; Appointment of
Successor.

                  (a) On and after the time the Servicer receives a notice of
termination, the Master Servicer shall be the successor in all respects to the
Servicer in its capacity as a Servicer under this Agreement and the transactions
set forth or provided for herein, and all the

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responsibilities, duties and liabilities relating thereto and arising thereafter
shall be assumed by the Master Servicer (except for any representations or
warranties of the Servicer under this Agreement, the responsibilities, duties
and liabilities contained in Section 2.03 and the obligation to deposit amounts
in respect of losses pursuant to Section 3.10(b)) by the terms and provisions
hereof including, without limitation, the Servicer's obligations to make P&I
Advances pursuant to Section 5.03 of this Agreement; provided, however, that if
the Master Servicer is prohibited by law or regulation from obligating itself to
make advances regarding delinquent mortgage loans, then the Master Servicer
shall not be obligated to make P&I Advances pursuant to Section 5.03 of this
Agreement; and provided further, that any failure to perform such duties or
responsibilities caused by the Servicer's failure to provide information
required by Section 8.01 shall not be considered a default by the Master
Servicer as successor to the Servicer hereunder; provided, however, that (1) it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 120 days) before the actual servicing functions can
be fully transferred to the Master Servicer or any successor Servicer appointed
in accordance with the following provisions and (2) any failure to perform such
duties or responsibilities caused by the Servicer's failure to provide
information required by Section 8.01 of this Agreement shall not be considered a
default by the Master Servicer as successor to the Servicer. As compensation
therefor, the Master Servicer shall be entitled to the Servicing Fee and all
funds relating to the Litton Mortgage Loans to which the Servicer would have
been entitled if it had continued to act hereunder. Notwithstanding the above
and subject to the immediately following paragraph, the Master Servicer may, if
it shall be unwilling to so act, or shall, if it is unable to so act promptly
appoint or petition a court of competent jurisdiction to appoint, a Person that
satisfies the eligibility criteria set forth below as the successor to the
Servicer under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer under this Agreement.

                  Notwithstanding anything herein to the contrary, in no event
shall the Trustee or the Master Servicer be liable for any Servicing Fee or for
any differential in the amount of the Servicing Fee paid hereunder and the
amount necessary to induce any successor Servicer to act as successor Servicer
under this Agreement and the transactions set forth or provided for herein.

                  Any successor Servicer appointed under this Agreement must (i)
be an established mortgage loan servicing institution that is a Fannie Mae and
Freddie Mac approved seller/servicer, (ii) be approved by each Rating Agency by
a written confirmation from each Rating Agency that the appointment of such
successor Servicer would not result in the reduction or withdrawal of the then
current ratings of any outstanding Class of Certificates, (iii) have a net worth
of not less than $15,000,000, and (iv) assume all the responsibilities, duties
or liabilities of the Servicer (other than liabilities of the Servicer hereunder
incurred prior to termination of Servicer under Section 8.01 herein) under this
Agreement as if originally named as a party to this Agreement.

                  (b) (1) All servicing transfer costs (including, without
limitation, servicing transfer costs of the type described in Section 8.02(a)
and incurred by the Trustee, the Master Servicer and any successor Servicer
under paragraph (b)(2) below) shall be paid by the terminated Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
or initial Servicer, as applicable, defaults in its obligation to pay such
costs, the successor Servicer, the Master Servicer and the Trustee shall be
entitled to reimbursement therefor from the assets of the Trust Fund.

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                  (2) No appointment of a successor to a Servicer under this
Agreement shall be effective until the assumption by the successor of all of
such Servicer'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 Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Servicer 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
Servicer under this Agreement, the Master Servicer shall act in such capacity as
hereinabove provided.

                  (c) (1) In the event of a Servicer Event of Default,
notwithstanding anything to the contrary above, the Trustee and the Depositor
hereby agree that upon delivery to the Trustee by the Servicing Rights Pledgee
of a letter signed by the Servicer within ten Business Days of when notification
of such event shall have been provided to the Trustee, whereunder the Servicer
shall resign as Servicer under this Agreement, the Trustee shall appoint the
Servicing Rights Pledgee or its designee as successor Servicer, provided that at
the time of such appointment, the Servicing Rights Pledgee or such designee
meets the requirements of a successor Servicer set forth in paragraph (c)(2)
below and the Servicing Rights Pledgee or such designee agrees to be subject to
the terms of this Agreement.

                  (2) In the event that the Servicing Rights Pledgee does not
deliver to the Trustee the letter described in preceding paragraph within the
time period specified therein, the Trustee shall give notice thereof in writing
to the Master Servicer and upon receipt of such notice, the Master Servicer
shall be the successor in all respects to the Servicer in its capacity as
Servicer 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 Master Servicer (except for any
representations or warranties of the Servicer under this Agreement, the
responsibilities, duties and liabilities contained in Section 2.03 and the
obligation to deposit amounts in respect of losses pursuant to Section 3.23(c))
by the terms and provisions hereof including, without limitation, the Servicer's
obligations to make P&I Advances pursuant to Section 5.03; provided, however,
that (1) 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 the Master Servicer or any successor
Servicer appointed in accordance with the following provisions and (2) any
failure to perform such duties or responsibilities caused by the Servicer's
failure to provide information required by Section 8.01 shall not be considered
a default by the Master Servicer as successor to the Servicer hereunder. As
compensation therefor, the Master Servicer shall be entitled to the Servicing
Fee and all funds relating to the Mortgage Loans to which the Servicer would
have been entitled if it had continued to act hereunder. Notwithstanding the
above and subject to the immediately following paragraph, the Master Servicer
may, if it shall be unwilling to so act, or shall, if it is unable to so act
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
Servicer under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer under this Agreement.

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                  SECTION 8.03. Notification to Certificateholders.

                  (a) Upon any termination of RMC, RMAE, the Servicer or the
Master Servicer pursuant to the Servicing Agreement or Section 8.01(a), as
applicable, or (b) or any appointment of a successor to RMC, RMAE, the Servicer
or the Master Servicer pursuant to the Servicing Agreement or Section 8.02, as
applicable, 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 Servicer Event of Default or 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
Servicer Event of Default or Master Servicer Event of Default shall have been
cured or waived.

                  SECTION 8.04. Waiver of Servicer Events of Default.

                  The Holders representing at least 66% of the Voting Rights
evidenced by all Classes of Certificates affected by any default, Servicer Event
of Default or Master Servicer Event of Default hereunder may waive such default,
Servicer Event of Default or Master Servicer Event of Default; provided,
however, that a Servicer Event of Default under clause (i) or (vii) of Section
8.01(a) may be waived only by all of the Holders of the Regular Certificates.
Upon any such waiver of a default, Servicer Event of Default or Master Servicer
Event of Default, such default, Servicer Event of 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, Servicer Event of Default or Master Servicer Event of Default or
impair any right consequent thereon except to the extent expressly so waived.

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                                   ARTICLE IX

             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

                  SECTION 9.01. 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 to the requirements of this
Agreement. If any such instrument is found not to conform to the requirements of
this Agreement in a material manner, 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 will provide notice
to the Trustee thereof and the Trustee will provide notice to the
Certificateholders.

                  The Trustee shall promptly remit to the Servicer any
complaint, claim, demand, notice or other document (collectively, the "Notices")
delivered to the Trustee as a consequence of the assignment of any Mortgage Loan
hereunder and relating to the servicing of the Mortgage Loans; provided than any
such notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.

                  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 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

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         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, 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 entitled to at least 25%
         of the Voting Rights 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 9.02. Certain Matters Affecting Trustee and Securities
Administrator.

                  (a) Except as otherwise provided in Section 9.01:

                           (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

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         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;

                           (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 entitled to at least 25% of the Voting Rights; 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 Trustee shall not be liable for any loss
         resulting from the investment of funds held in the Collection Account,
         for any loss resulting from the investment of funds held in the Reserve
         Fund or for any loss resulting from the redemption or sale of any such
         investment as therein authorized;

                           (viii) The Trustee shall not be deemed to have notice
         of any default, Master Servicer Event of Default or 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 a Responsible Officer of the Trustee
         at the Corporate Trust Office of the Trustee, and such notice
         references the Certificates and this Agreement; and

                           (ix) 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) 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

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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.

                  (c) The Trustee is hereby directed by the Depositor to execute
the Cap Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap Contract,
including, without limitation, the representations and warranties contained
therein. Any funds payable by the Trustee under the Cap Contract at closing
shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contract, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contract.

                  (d) None of the Securities Administrator, the Master Servicer,
the Servicer, the Seller, the Depositor, the Custodian or the Trustee shall be
responsible for the acts or omissions of the others, it being understood that
this Agreement shall not be construed to render those partners joint venturers
or agents of one another.

                  SECTION 9.03. Trustee and Securities Administrator not Liable
for Certificates or Mortgage 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 9.12) 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 9.12) or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Mortgage Loan or related document. The Trustee and the Securities Administrator
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 Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Servicer, other than with respect to the Securities Administrator any
funds held by it or on behalf of the Trustee in accordance with Section 3.23 and
3.24.

                  SECTION 9.04. Trustee and Securities Administrator May Own
Certificates.

                  Each of the Trustee 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 Trustee or the
Securities Administrator.

                  SECTION 9.05. 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

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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, the Custodian
or the Securities Administrator in connection with 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, including the Cap Contract and any and all other
agreements related hereto, other than any loss, liability or expense (i) for
which the Trustee is indemnified by the Master Servicer or any Servicer, (ii)
that constitutes a specific liability of the Trustee or the Securities
Administrator pursuant to Section 11.01(g) or (iii) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder by the Trustee or the Securities
Administrator or by reason of reckless disregard of obligations and duties
hereunder. In no event shall the Trustee or the Securities Administrator be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form of
action. 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. In
addition, the Seller agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the last paragraph of Section 2.01,
including, without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigating and defending itself
against any claim, action or proceeding, pending or threatened, relating to the
provisions of such paragraph. The indemnities in this Section 9.05 shall survive
the termination or discharge of this Agreement and the resignation or removal of
the Master Servicer, the Trustee, the Securities Administrator or the Custodian.
Any payment hereunder made by the Master Servicer to the Trustee shall be from
the Master Servicer's own funds, without reimbursement from REMIC I therefor.

                  SECTION 9.06. 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 9.07.

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                  SECTION 9.07. Resignation and Removal of Trustee and
Securities Administrator.

                  The Trustee and the Securities Administrator may at any time
resign 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 9.06 and
shall fail to resign after written request therefor by the Depositor, or if at
any time the Trustee or the Securities Administrator shall 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. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights 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.

                  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 8.08.

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                  Notwithstanding anything to the contrary contained herein, the
Master Servicer and the Securities Administrator shall at all times be the same
Person.

                  SECTION 9.08. Successor Trustee or Securities Administrator.

                  Any successor trustee or successor securities administrator
appointed as provided in Section 9.07 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 Mortgage 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.

                  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 8.06 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 9.09. 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 8.06, 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.

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                  SECTION 9.10. 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 the REMIC I 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 REMIC I, and to vest in such Person or Persons, in such
capacity, and for the benefit of the Holders of the Certificates, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 9.10, 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 9.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.10 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 obligations (including the holding
of title to REMIC I 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 IX. 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 9.11. Appointment of Office or Agency.

                  The Certificates may be surrendered for registration of
transfer or exchange at the Securities Administrator's office located at Sixth
and Marquette, Minneapolis, Minnesota 55479, and presented for final
distribution at the Corporate Trust Office of the Securities Administrator

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where notices and demands to or upon the Securities Administrator in respect of
the Certificates and this Agreement may be served.

                  SECTION 9.12. Representations and Warranties.

                  The Trustee hereby represents and warrants to the Master
Servicer, the Securities Administrator, the Servicer 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 association 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.

                           (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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                                    ARTICLE X

                                   TERMINATION

                  SECTION 10.01. Termination Upon Repurchase or Liquidation of
All Mortgage Loans.

                  (a) Subject to Section 10.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator, the Servicer and the Trustee (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05 and
of the Servicer to make remittances to the Securities Administrator and the
Securities Administrator to make payments in respect of the REMIC I Regular
Interests, REMIC I 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) the purchase by the Servicer of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of the
earlier of (i) 21 years from the death of the last survivor of the descendants
of Joseph P. Kennedy, the late ambassador of the United States to the Court of
St. James, living on the date hereof and (ii) the Final Maturity Date. The
purchase by the Servicer of all Mortgage Loans and each REO Property remaining
in REMIC I shall be at a price (the "Termination Price") equal to the sum of (i)
the greater of (A) the aggregate Purchase Price of all the Mortgage Loans
included in REMIC I, plus the appraised value of each REO Property, if any,
included in REMIC I, such appraisal to be conducted by an appraiser mutually
agreed upon by the Servicer and the Trustee in their reasonable discretion and
(B) the aggregate fair market value of all of the assets of REMIC I (as
determined by the Servicer and the Trustee, as of the close of business on the
third Business Day next preceding the date upon which notice of any such
termination is furnished to Certificateholders pursuant to the third paragraph
of this Section 10.01) plus (ii) any amounts due the Servicer and the Master
Servicer in respect of unpaid Servicing Fees, Master Servicing Fees and
outstanding P&I Advances and Servicing Advances.

                  (b) The Servicer shall have the right to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
of the preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Master Servicer may elect to purchase all
of the Mortgage Loans and each REO Property remaining in REMIC I pursuant to
clause (i) above only if the aggregate Stated Principal Balance of the Mortgage
Loans and each REO Property remaining in the Trust Fund at the time of such
election is reduced to less than 10% of the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date. By acceptance of the Residual
Certificates, the Holder of the Residual Certificates agrees, in connection with
any termination hereunder, to assign and transfer any portion of the Termination
Price in excess of par, and to the extent received in respect of such
termination, to pay any such amounts to the Holders of the Class CE
Certificates.

                  (c) Notice of the liquidation of the Certificates shall be
given promptly by the Securities Administrator by letter to the
Certificateholders mailed (a) in the event such notice is

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given in connection with the purchase of the Mortgage Loans and each REO
Property by the Master Servicer, 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 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
and the final payment in respect of the REMIC I Regular Interests, REMIC I
Regular Interests or the 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 REMIC I Regular Interests,
REMIC I Regular Interests or Certificates from and after the 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, payments
being made only upon presentation and surrender of the Certificates at the
office of the Securities Administrator. In the event such notice is given in
connection with the purchase of all of the Mortgage Loans and each REO Property
remaining in REMIC I by the Master Servicer, the Master Servicer shall deliver
to the Securities Administrator for deposit in the Distribution Account not
later than the Business Day prior to the Distribution Date on which the final
distribution on the Certificates an amount in immediately available funds equal
to the above-described Termination Price. The Securities Administrator shall
remit to the Servicer, the Master Servicer, the Trustee and the Custodian from
such funds deposited in the Distribution Account (i) any amounts which the
Servicer would be permitted to withdraw and retain from the Collection Account
pursuant to Section 3.09 as if such funds had been deposited therein (including
all unpaid Servicing Fees and all outstanding P&I Advances and Servicing
Advances) and (ii) any other amounts otherwise payable by the Securities
Administrator to the Master Servicer, the Trustee, the Custodian and the
Servicer from amounts on deposit in the Distribution Account pursuant to the
terms of this Agreement prior to making any final distributions pursuant to
Section 10.01(d) below. Upon certification to the Trustee by the Securities
Administrator of the making of such final deposit, the Trustee shall promptly
release or cause to be released to the Master Servicer the Mortgage Files for
the remaining Mortgage Loans, and Trustee shall execute all assignments,
endorsements and other instruments delivered to it and necessary to effectuate
such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, 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 5.01 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 10.01 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 remaining in
the trust funds. If within one year after the final notice any such

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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) on the final Distribution Date for final
payment thereof in accordance with this Section 10.01. Any such amounts held in
trust by the Securities Administrator shall be held uninvested in an Eligible
Account.

                  SECTION 10.02. Additional Termination Requirements.

                  (a) In the event that the Master Servicer purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 10.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:

                           (i) The Trustee shall specify the first day in the
         90-day liquidation period in a statement attached to each Trust 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 Master
         Servicer;

                           (ii) During such 90-day liquidation period and, at or
         prior to the time of making of the final payment on the Certificates,
         the Trustee shall sell all of the assets of REMIC I to the Master
         Servicer for cash; and

                           (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.

                  (b) At the expense of the Master Servicer (or, if the Trust
Fund is being terminated as a result of the occurrence of the event described in
clause (ii) of the first paragraph of Section 10.01, at the expense of the Trust
Fund), the Master Servicer shall prepare or cause to be prepared the
documentation required in connection with the adoption of a plan of liquidation
of each Trust REMIC pursuant to this Section 10.02.

                  (c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each Trust REMIC, which authorization shall be binding upon all successor
Certificateholders.

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                                   ARTICLE XI

                                REMIC PROVISIONS

                  SECTION 11.01. REMIC Administration.

                  (a) The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Each such
election will 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 the Class R-I Interest shall be designated as the
Residual Interests in REMIC I. The Class A Certificates, the Mezzanine
Certificates, the Class B Certificates, the Class P Certificates and the Class
CE Certificates (exclusive of any right to receive payments from the Reserve
Fund) shall be designated as the Regular Interests in REMIC II and the Class
R-II Interest shall be designated as the Residual Interests in REMIC II. 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 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 Trust 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 Trust REMIC's tax matters person shall (i) act on behalf of the
Trust Fund in relation to any tax matter or controversy involving any Trust
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.

                  (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 Trust 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

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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 will serve as the representative of each Trust 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 Trust 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 the 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 Trust 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 Trust REMIC or the respective assets of each, or causing any
Trust REMIC to take any action, which is not contemplated under the terms of
this Agreement, the Securities Administrator will 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 Trust REMIC, and the Securities
Administrator shall not take any such action or cause any Trust REMIC to take
any such action as to which the Trustee has advised it in writing that an
Adverse REMIC Event could occur. The Trustee may consult with counsel to make
such written advice, and the cost of same shall be home 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

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tax laws, such tax shall be charged (i) to the Trustee pursuant to Section
11.03, if such tax arises out of or results from a breach by the Trustee of any
of its obligations under this Article XI, (ii) to the Securities Administrator
pursuant to Section 11.03, if such tax arises out of or results from a breach by
the Securities Administrator of any of its obligations under this Article XI,
(iii) to the Master Servicer pursuant to Section 11.03, if such tax arises out
of or results from a breach by the Master Servicer of any of its obligations
under Article IV or under this Article XI, (iv) to the Servicer pursuant to
Section 11.03, if such tax arises out of or results from a breach by the
Servicer of any of its obligations under Article III or under this Article XI,
or (v) in all other cases, against amounts on deposit in the Distribution
Account and shall be paid by withdrawal therefrom.

                  (h) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each Trust REMIC on a
calendar year and on an accrual basis.

                  (i) Following the Startup Day, neither the Securities
Administrator nor the Trustee shall accept any contributions of assets to any
Trust REMIC other than in connection with any Qualified Substitute Mortgage Loan
delivered in accordance with Section 2.03 unless it shall have received an
Opinion of Counsel 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 11.02. Prohibited Transactions and Activities.

                  None of the Depositor, the Servicer, the Securities
Administrator, the Master Servicer or the Trustee shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
foreclosure of a Mortgage 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 REMIC I, (iii) the termination of REMIC I pursuant to Article X of
this Agreement, (iv) a substitution pursuant to Article II of this Agreement or
(v) a purchase of Mortgage Loans pursuant to Article II of this Agreement), nor
acquire any assets for any Trust REMIC (other than REO Property acquired in
respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in
the Collection Account or the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee and the Securities
Administrator (at the expense of

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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 Trust REMIC as a REMIC or (b) cause any Trust REMIC
to be subject to a tax on "prohibited transactions" or "contributions" pursuant
to the REMIC Provisions.

                  SECTION 11.03. Indemnification.

                  (a) The Trustee agrees to be liable for any taxes and costs
incurred by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Servicer including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator or the Servicer as a result of the
Trustee's failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Trustee set forth in this Agreement.

                  (b) The Servicer agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee for
any taxes and costs including any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Trustee, as a result of the Servicer's failure to perform
its covenants set forth in Article III in accordance with the standard of care
of the Servicer set forth in this Agreement.

                  (c) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor, the Servicer and the Trustee for any taxes and costs including
any reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor, the Servicer or the Trustee, as a result of the Master Servicer's
failure to perform its covenants set forth in Article IV in accordance with the
standard of care of the Master Servicer set forth in this Agreement.

                  (d) The Securities Administrator agrees to be liable for any
taxes and costs incurred by the Trust Fund, the Depositor, the Servicer or the
Trustee including any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor, the Servicer or the Trustee as a result of the
Securities Administrator's failure to perform its covenants set forth in this
Article XI in accordance with the standard of care of the Securities
Administrator set forth in this Agreement.

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                                  ARTICLE XII

                            MISCELLANEOUS PROVISIONS

                  SECTION 12.01. Amendment.

                  This Agreement may be amended from time to time by the
Depositor, the Servicer, the Master Servicer, the Securities Administrator and
the Trustee, but without the consent of any of the Certificateholders, (i) to
cure any ambiguity or defect, (ii) to correct, modify or supplement any
provisions herein (including to give effect to the expectations of
Certificateholders), or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, provided that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder;
provided that any such amendment shall be deemed not to adversely affect in any
material respect the interests of the Certificateholders and no such Opinion of
Counsel shall be required if the Person requesting such amendment obtains a
letter from each Rating Agency stating that such amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates. 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 Servicer, the Master Servicer, the Securities Administrator and
the Trustee with the consent of the Holders of Certificates entitled to at least
66% of the Voting Rights 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 Mortgage 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% of the Voting Rights allocated to 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 12.01, Certificates registered in the name of
the Depositor or a 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 5.06 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 to the effect that such amendment is
permitted hereunder and will not result in the imposition of any tax on any
Trust

                                      164
<PAGE>

REMIC pursuant to the REMIC Provisions or cause any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding and that
such amendment is authorized or permitted by this Agreement.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 12.01 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.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 12.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee .

                  The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.

                  SECTION 12.02. Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all 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
upon direction of the Trustee accompanied by 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 12.03. 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 to
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.

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any 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.

                                      165
<PAGE>

                  No Certificateholder shall have any right by virtue 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 also the
Holders of Certificates entitled to at least 25% of the Voting Rights 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 costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 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 is
understood and intended, and 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 whatsoever by virtue 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 equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

                  SECTION 12.04. Governing Law.

                  This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without regard to
conflicts of laws principles thereof.

                  SECTION 12.05. Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if sent by
facsimile, receipt confirmed, if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service or delivered in any
other manner specified herein, to (a) in the case of the Depositor, ACE
Securities Corp., AMACAR GROUP, 6525 Morrison Boulevard, Suite 318, Charlotte,
North Carolina 28211, Attention: Juliana Johnson (telecopy number:(704)
365-1362), or such other address or telecopy number as may hereafter be
furnished to the Servicer, the Master Servicer, the Securities Administrator and
the Trustee in writing by the Depositor, (b) in the case of the Servicer, Litton
Loan Servicing LP, 4828 Loop Central Drive, Houston, Texas 77081, Attention:
Janice McClure (telecopy number: (713) 960-0539)), or such other address or
telecopy number as may hereafter be furnished to the Trustee, the Master
Servicer, the Securities Administrator and the Depositor in writing by the
Servicer, (c) 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: Ace Securities
Corp., 2004-RM2 (telecopy number: (410) 715-2380), or such other address or
telecopy number as may hereafter be furnished to the Trustee, the Depositor and
the Servicer in writing by the Master Servicer or the Securities Administrator
and (d) 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
Servicer, the Master Servicer, the Securities Administrator and the Depositor in
writing by the Trustee. Any notice required or permitted to be given to a
Certificateholder shall

                                      166
<PAGE>

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 12.06. Severability of Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

                  SECTION 12.07. 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 a
Responsible Officer has actual knowledge:

                  1. Any material change or amendment to this Agreement;

                  2. The occurrence of any Servicer Event of Default or Master
         Servicer Event of Default that has not been cured or waived;

                  3. The resignation or termination of the Servicer, the Master
         Servicer or the Trustee;

                  4. The repurchase or substitution of Mortgage Loans pursuant
         to or as contemplated by Section 2.03;

                  5. The final payment to the Holders of any Class of
         Certificates;

                  6. Any change in the location of the Distribution Account; and

                  7. Any event that would result in the inability of the Trustee
         as successor Servicer to make advances regarding delinquent Mortgage
         Loans.

                  In addition, the Securities Administrator shall promptly make
available to each Rating Agency copies of each report to Certificateholders
described in Section 5.02.

                  The Servicer shall make available to each Rating Agency copies
of the following:

                  8. Each annual statement as to compliance described in Section
         3.17; and

                  9. Each annual independent public accountants' servicing
         report described in Section 3.18.

                  Any such notice pursuant to this Section 12.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage

                                      167
<PAGE>

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 12.08. 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 12.09. Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee, on behalf of
the Trust and for the benefit of the Certificateholders, be, and be construed
as, a sale of the Mortgage Loans by the Depositor and not a pledge of the
Mortgage Loans to secure a debt or other obligation of the Depositor. However,
in the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage 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
Mortgage Loans by the Depositor to the Trustee, on behalf of the Trust 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 2.01 shall be deemed to be a grant by the Depositor to
the Trustee, on behalf of the Trust 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 Mortgage Loans and all amounts payable to the
holders of the Mortgage 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 Collection Account and the Distribution Account, 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 Mortgage 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
and for the benefit of the Certificateholders, a security interest in the
Mortgage 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 2.01 to be a true, absolute and unconditional sale of the Mortgage
Loans and assets constituting the Trust Fund by the Depositor to the Trustee, on
behalf of the Trust and for the benefit of the Certificateholders.

                                      168
<PAGE>

                  SECTION 12.10. Survival of Indemnification.

                  Any and all indemnities to be provided by any party to this
Agreement shall survive the termination and resignation of any party hereto and
the termination of this Agreement.

SECTION 12.11.    Servicing Agreements.

                  With respect to the RMC Mortgage Loans and RMAE Mortgage
Loans, in the event of any conflict between the provisions of this Agreement and
the provisions of the Servicing Agreement, the provisions of the Servicing
Agreement shall control.

                                      169
<PAGE>

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

                            ACE SECURITIES CORP.,
                            as Depositor

                            By: /s/ Evelyn Echevarria
                                ------------------------------------------------
                            Name:   Evelyn Echevarria
                            Title:  Vice President

                            By: /s/ Juliana C. Johnson
                                ------------------------------------------------
                            Name:   Juliana C. Johnson
                            Title:  Vice President

                            LITTON LOAN SERVICING LP
                            as Servicer

                            By: /s/ Janice McClure
                                ------------------------------------------------
                            Name:   Janice McClure
                            Title:  Sr. Vice President

                            HSBC BANK USA, NATIONAL ASSOCIATION
                            not in its individual capacity but solely as Trustee

                            By: /s/ Susie Moy
                                ------------------------------------------------
                            Name:   Susie Moy
                            Title:  Vice President

                            WELLS FARGO BANK, N.A.
                            as Master Servicer and Securities Administrator

                            By: /s/ Stacey Taylor
                                ------------------------------------------------
                            Name:   Stacey Taylor
                            Title:  Assistant Vice President

<PAGE>

                            ACKNOWLEDGED AND AGREED FOR PURPOSES OF
                            SECTION 9.05:

                            DB STRUCTURED PRODUCTS, INC

                            By: /s/ Paul Mangione
                                ------------------------------------------------
                            Name:   Paul Mangione
                            Title:  Authorized Signatory

                            By: /s/ Susan Valenti
                                ------------------------------------------------
                            Name:   Susan Valenti
                            Title:  Vice President

<PAGE>

STATE OF           )
                   ) ss.:
COUNTY OF          )

                  On the ___ day of December 2004, before me, a notary public in
and for said State, personally appeared _____________________ known to me to be
a _____________________ of ACE Securities Corp., 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]___                          My commission expires

<PAGE>

STATE OF           )
                   ) ss.:
COUNTY OF          )

                  On the ___ day of December 2004, before me, a notary public in
and for said State, personally appeared _____________________ known to me to be
a _____________________ of ACE Securities Corp., 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]___                          My commission expires

<PAGE>

STATE OF           )
                   ) ss.:
COUNTY OF          )

                  On the ___ day of December 2004, before me, a notary public in
and for said State, personally appeared _____________________ known to me to be
a _____________________ of Litton Loan Servicing LP, one of the federal
chartered savings banks that executed the within instrument, and also known to
me to be the person who executed it on behalf of said federally chartered
savings bank, and acknowledged to me that such federally chartered savings bank
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]___                          My commission expires

<PAGE>

STATE OF           )
                   ) ss.:
COUNTY OF          )

                  On the ___ day of December 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]___                          My commission expires

<PAGE>

STATE OF           )
                   ) ss.:
COUNTY OF          )

                  On the ___ day of December 2004, before me, a notary public in
and for said State, personally appeared _____________________ known to me to be
a _____________________ of HSBC Bank USA, National Association, 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]___                          My commission expires

<PAGE>

                                   EXHIBIT A-1

                           FORM OF CLASS A 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>

Series 2004-RM2, Class A               Aggregate Certificate Principal
                                       Balance of the Class A Certificates
                                       as of Issue Date: $____________

Pass-Through Rate: Variable            Denomination:  $____________

Date of Pooling and Servicing          Master Servicer: Wells Fargo Bank, N.A.
Agreement and Cut-off Date:
December 1, 2004

First Distribution Date:               Trustee: HSBC Bank USA, National
January 25, 2005                       Association

No.__                                  Issue Date: December 29, 2004

                                       CUSIP:________________

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF 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 ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-1-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                                               ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class A
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class A Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A. as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), Litton Loan Servicing, LP, as servicer (the
"Servicer") and HSBC Bank USA, National Association as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned 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 the 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 Business Day immediately
preceding such Distribution Date (the "Record Date"), 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 Class A Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
A Certificates the aggregate initial Certificate Principal Balance of which is
in excess of the lesser of (i)

                                     A-1-4

<PAGE>

$5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal
Balance of the Class A Certificates, or otherwise by check mailed by first class
mail to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register. 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 as provided in the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date 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 Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is less than or equal
to 10% of the aggregate principal balance of the Mortgage 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.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contract, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Account and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. 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 exchange herefor 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
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an

                                     A-1-4

<PAGE>

assignment in the form below or other 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 of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

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

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assumes
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by 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-1-5

<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 A Certificates referred to in the
within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                      Authorized Officer

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -       Custodian
                                                                --------------
                                                                (Cust) (Minor)
                                                             under Uniform Gifts
                                                                 to Minors Act
TEN ENT - as tenants by the entireties                         ________________
                                                                    (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
                       Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest 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

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by________________________________________________,
the assignee named above, or _________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-2

                FORM OF CLASS M-[1][2][3][4][5][6][7] 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.

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES [[,/AND]
         CLASS M-1 CERTIFICATES [,/AND] CLASS M-2 CERTIFICATES[,/AND] CLASS M-3
         CERTIFICATES [,/AND] CLASS M-4 CERTIFICATES [,/AND] CLASS M-5
         CERTIFICATES] [,/AND] CLASS M-6 CERTIFICATES] TO THE EXTENT DESCRIBED
         IN THE AGREEMENT REFERRED TO HEREIN.

         ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
         REPRESENTATIONS SET FORTH IN SECTION 6.02(C) OF THE AGREEMENT REFERRED
         TO HEREIN.

         THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
         BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED 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 WILL 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.

<PAGE>

Series 2004-RM2, Class M-[1][2][3]     Aggregate Certificate Principal
[4][5][6][7]                           Balance of the Class M-[1][2][3]
                                       [4][5][6][7] Certificates
                                       as of the Issue Date: $______________

Pass-Through Rate: Variable            Denomination:  $_____________

Date of Pooling and Servicing          Master Servicer: Wells Fargo Bank, N.A.
Agreement and Cut-off Date:
December 1, 2004

First Distribution Date:               Trustee: HSBC Bank USA, National
January 25, 2005                       Association

No.__                                  Issue Date: December 29, 2004

                                       CUSIP:________________

                                      A-2-2

<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class
M-[1][2][3][4][5][6][7] Certificates as of the Issue Date) in that certain
beneficial ownership interest evidenced by all the Class M-[1][2][3][4][5][6][7]
Certificates in REMIC II created pursuant to a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among ACE Securities Corp., as
depositor (hereinafter called the "Depositor", which term includes any successor
entity under the Agreement), Wells Fargo Bank, N.A. as master servicer (the
"Master Servicer") and securities administrator (the "Securities
Administrator"), Litton Loan Servicing, LP as servicer (the "Servicer") and HSBC
Bank USA, National Association, as trustee (the "Trustee"), a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned 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 the 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 Business Day immediately
preceding such Distribution Date (the "Record Date"), 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 Class M-[1][2][3][4][5][6][7]
Certificates on such Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date

                                      A-2-3

<PAGE>

immediately prior to such Distribution Date and is the registered owner of Class
M-[1][2][3][4][5][6][7] Certificates the aggregate initial Certificate Principal
Balance of which is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds
of the aggregate initial Certificate Principal Balance of the Class
M-[1][2][3][4][5][6][7] Certificates, or otherwise by check mailed by first
class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. 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 as provided in the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal 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 Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is less than
or equal to 10% of the aggregate principal balance of the Mortgage 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.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contract, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Account and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. 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 exchange herefor 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.

                                      A-2-4
<PAGE>

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other 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 of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 6.02(c) of the Agreement.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

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

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

                                      A-2-5

<PAGE>

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by 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-2-6

<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-[1][2][3][4][5][6][7] Certificates
referred to in the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                     Authorized Officer

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -       Custodian
                                                                --------------
                                                                (Cust) (Minor)
                                                             under Uniform Gifts
                                                                 to Minors Act
TEN ENT - as tenants by the entireties                         ________________
                                                                    (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
                       Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest 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

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by________________________________________________,
the assignee named above, or _________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-3

                  FORM OF CLASS B-[1][2][3][4][5] CERTIFICATES

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
         CERTIFICATES [[,/AND] THE MEZZANINE CERTIFICATES [[,/AND] THE CLASS B-1
         CERTIFICATES [,/AND] CLASS B-2 CERTIFICATES [,/AND] CLASS B-3
         CERTIFICATES [,/AND] CLASS B-4 CERTIFICATES ], TO THE EXTENT DESCRIBED
         IN THE AGREEMENT REFERRED TO HEREIN.

         THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
         BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED 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 WILL 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.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
         SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
         AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
         OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
         OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
         MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
         ("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
         INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
         144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
         ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
         (3) OR (7) OF "REGULATION D" UNDER THE ACT.

         [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

<PAGE>

         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.]

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
         TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(C) OF THE
         AGREEMENT.

                                      A-3-2

<PAGE>

Series ACE 2004-RM2,                   Aggregate Certificate Principal Balance
Class B-[1][2][3][4][5]                of the Class B-[1][2][3][4][5]
                                       Certificates as of the Issue Date: $_____

Pass-Through Rate: Variable            Denomination:  $___________

Date of Pooling and Servicing          Master Servicer: Wells Fargo Bank, N.A.
Agreement and Cut-off Date:
December 1, 2004

First Distribution Date:               Trustee: HSBC Bank USA, National
January 25, 2005                       Association

No.__                                  Issue Date: December 29, 2004

                                       CUSIP:________________

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

         This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-[1][2][3][4][5]
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B-[1][2][3][4][5] Certificates in REMIC II created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among ACE Securities Corp., as depositor (hereinafter called the
"Depositor", which term includes any successor entity under the Agreement),
Wells Fargo Bank, N.A., as master servicer (the "Master Servicer"), and
securities administrator (the "Securities Administrator"), Litton Loan
Servicing, LP, as servicer (the "Servicer") and HSBC Bank USA, National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned 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 the acceptance hereof assents and by which such Holder is bound.

                                     A-3-3

<PAGE>

         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 at the close of business on the
Business Day immediately preceding such Distribution Date (the "Record Date"),
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 Class
B-[1][2][3][4][5] Certificates on such Distribution Date pursuant to the
Agreement.

         All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Securities Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B-[1][2][3][4][5]
Certificates the aggregate initial Certificate Principal Balance of which is in
excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class B-[1][2][3][4][5]
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. 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 as provided in the Agreement.

         The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal 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 Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust Fund is less than or equal to 10% of the
aggregate principal balance of the Mortgage 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.

         This Certificate is one of a duly authorized issue of Certificates
designated as Asset Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans and payments received pursuant to
the Cap Contract, all as more specifically set forth herein and in the
Agreement. As provided in the Agreement, withdrawals from the Collection Account
and the Distribution Account may be made from time to time for purposes other
than distributions to Certificateholders, such purposes including reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans.

                                     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, the Master Servicer, the Trustee, the Securities Administrator, the
Servicer and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicer with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. 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 exchange herefor 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 in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other 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 of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

         The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

         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) if such transfer is purportedly being made in reliance upon Rule
144A or Regulation S under the 1933 Act, written certifications from the Holder
of the Certificate desiring to effect the transfer, and from such Holder's
prospective transferee, substantially in the forms attached to the Agreement as
Exhibit B-1, (ii) if such transfer is purportedly being made in reliance upon
Rule 501(a) under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer and from such Holder's prospective
transferee, substantially in the form attached to the Agreement as Exhibit B-2
and (iii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of

                                      A-3-5

<PAGE>

the Trust Fund or of the Depositor, the Trustee, the Master Servicer or the
Securities Administrator 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 Trustee or the
Securities Administrator is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

         No transfer of this Certificate shall be made to any person unless the
Transferee provides a certification pursuant to Section 6.02(c) of the
Agreement.

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

         The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Securities Administrator and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

         The recitals contained herein shall be taken as statements of the
Depositor and neither the Trustee nor the Securities Administrator assume any
responsibility for their correctness.

Unless the certificate of authentication hereon has been executed by 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 B-[1][2][3][4][5] Certificates
referred to in the within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                     Authorized Officer

<PAGE>

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
                       Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Certificate to the following
address: _______________________________________________________________________
_______________________________________________________________________________.

Dated:

                                          --------------------------------------
                                          Signature by or on behalf of assignor

                                          --------------------------------------
                                          Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by________________________________________________,
the assignee named above, or _________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-4

                          FORM OF CLASS CE CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
         MEZZANINE CERTIFICATES AND THE CLASS B CERTIFICATES TO THE EXTENT
         DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
         SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
         AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
         OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
         OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
         MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
         ("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
         INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
         144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
         ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
         (3) OR (7) OF "REGULATION D" UNDER THE ACT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
         TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(C) OF THE
         AGREEMENT.

<PAGE>

Series 2004-RM2, Class CE              Aggregate Certificate Principal Balance
                                       of the Class CE Certificates as of the
                                       Issue Date: $_____________

Pass-Through Rate: Variable            Denomination:  $___________

Cut-off Date and Date of Pooling       Master Servicer: Wells Fargo Bank, N.A.
and Servicing Agreement:
December 1, 2004

First Distribution Date:               Trustee: HSBC Bank USA, National
January 25, 2005                       Association

No.__                                  Issue Date: December 29, 2004

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class CE
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class CE Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A., as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), Litton Loan Servicing, LP, as servicer (the
"Servicer") and HSBC Bank USA, National Association, as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and

                                      A-4-2

<PAGE>

conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the 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 (the "Record Date"), 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 Class CE Certificates on such Distribution Date
pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
CE Certificates the aggregate initial Certificate Principal Balance of which is
in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class CE Certificates, or otherwise
by check mailed by first class mail to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register.
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 as
provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. 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

                                     A-4-3

<PAGE>

Certificate issued upon the transfer hereof or in exchange herefor 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
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other 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 of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  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) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
(ii) if such transfer is purportedly being made in reliance upon Rule 501(a)
under the 1933 Act, written certifications from the Holder of the Certificate
desiring to effect the transfer and from such Holder's prospective transferee,
substantially in the form attached to the Agreement as Exhibit B-2 and (iii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee, the
Master Servicer or the Securities Administrator 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 Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator 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 to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.

                                     A-4-4

<PAGE>

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

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

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by 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-4-5

<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 CE Certificates referred to in the
within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                     Authorized Officer

<PAGE>
                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -       Custodian
                                                                --------------
                                                                (Cust) (Minor)
                                                             under Uniform Gifts
                                                                 to Minors Act
TEN ENT - as tenants by the entireties                         ________________
                                                                    (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
                       Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest 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

<PAGE>

                            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

                               CLASS P CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
         SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
         AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
         OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
         OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
         MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
         ("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
         INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
         144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
         ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
         (3) OR (7) OF "REGULATION D" UNDER THE ACT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
         TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(C) OF THE
         AGREEMENT.

<PAGE>

Series 2004-RM2, Class P                 Aggregate Certificate Principal Balance
                                         of the Class P Certificates as of the
                                         Issue Date: $100.00

Cut-off Date and date of Pooling and
Servicing Agreement: December 1, 2004    Denomination: $100.00

First Distribution Date:                 Trustee: HSBC Bank USA, National
January 25, 2005                         Association

No.__                                    Issue Date: December 29, 2004

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF 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 ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-5-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class P
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class P Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A., as master servicer (the "Master Servicer"), and securities administrator
(the "Securities Administrator"), Litton Loan Servicing, LP, as servicer (the
"Servicer") and HSBC Bank USA, National Association, as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned 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 the 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 (the "Record Date"), 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 Class P Certificates on such Distribution Date
pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
P Certificates
                                      A-5-3

<PAGE>

the aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class P Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. 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 as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. 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 exchange herefor 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
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other 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 of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  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

                                     A-5-4

<PAGE>

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) if such transfer is purportedly being
made in reliance upon Rule 144A under the 1933 Act, written certifications from
the Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit B-1, (ii) if such transfer is purportedly being made in
reliance upon Rule 501(a) under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer and from such Holder's
prospective transferee, substantially in the form attached to the Agreement as
Exhibit B-2 and (iii) in all other cases, an Opinion of Counsel satisfactory to
it that such transfer may be made without such registration or qualification
(which Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee, the Master Servicer or the Securities Administrator 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 Trustee or the Securities
Administrator is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Depositor, the Master Servicer and the Securities Administrator
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 to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

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

                                      A-5-5

<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by 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-5-6

<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 P Certificates referred to in the
within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                      Authorized Officer

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -       Custodian
                                                                --------------
                                                                (Cust) (Minor)
                                                             under Uniform Gifts
                                                                 to Minors Act
TEN ENT - as tenants by the entireties                         ________________
                                                                    (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
                       Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest 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

<PAGE>

                            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 R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
         REPRESENTS THE SOLE "RESIDUAL INTEREST" IN EACH "REAL ESTATE MORTGAGE
         INVESTMENT CONDUIT" ("REMIC"), 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 6.02 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 6.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         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

<PAGE>

         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 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 6.02(D) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS
         A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
         OWNERSHIP OF THIS CERTIFICATE.

Series 2004-RM2, Class R               Aggregate Percentage Interest of the
                                       Class R Certificates as of the Issue
                                       Date: 100.00%

Date of Pooling and Servicing          Master Servicer: Wells Fargo Bank, N.A.
Agreement and Cut-off Date:
December 1, 2004

First Distribution Date:               Trustee: HSBC Bank USA, National
January 25, 2005                       Association

No.__                                  Issue Date: December 29, 2004

                                      A-6-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-RM2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
         SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR,
         THE SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                                      A-6-3

<PAGE>

                  This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ACE Securities
Corp., as depositor (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), Wells Fargo Bank, N.A., as master
servicer (the "Master Servicer") and securities administrator (the "Securities
Administrator"), Litton Loan Servicing, LP, as the servicer (the "Servicer") and
HSBC Bank USA, National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned 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 the 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, 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 Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
R Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. 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 as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to

                                      A-6-4

<PAGE>

Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. 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 exchange herefor 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
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other 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 of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  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) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Master Servicer or the Securities Administrator 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 Trustee or the Securities

                                      A-6-5
<PAGE>

Administrator is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Depositor, the Master Servicer and the Securities Administrator
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 to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02 of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Securities Administrator (i) an affidavit to the effect that such transferee is
any Person other than a Disqualified Organization or the agent (including a
broker, nominee or middleman) of a Disqualified Organization, and (ii) a
certificate that acknowledges that (A) the Class R Certificates have been
designated as representing the beneficial ownership of the residual interests in
each of REMIC I and REMIC II, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) 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, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 6.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any portion
of the Trust Fund to cease to qualify as a REMIC or cause the imposition of a
tax upon any REMIC.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer 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,

                                      A-6-6

<PAGE>

the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
or equal to 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by 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-6-7

<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 R Certificates referred to in the
within-mentioned Agreement.

                                          WELLS FARGO BANK, N.A.
                                          as Securities Administrator

                                          By:___________________________________
                                                      Authorized Officer

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -       Custodian
                                                                --------------
                                                                (Cust) (Minor)
                                                             under Uniform Gifts
                                                                 to Minors Act
TEN ENT - as tenants by the entireties                         ________________
                                                                    (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
                       Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest 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

<PAGE>

                            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-1
                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                     [Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM2

         Re:      ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM2
                  Asset Backed Pass-Through Certificates
                  Class B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class
                  CE, Class P and Class R Certificates
                  ------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ______________________ (the
"Transferor") to ___________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:

                  Neither the Transferor 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, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
December 1, 2004, among ACE Securities Corp. as Depositor, Litton Loan
Servicing, LP as Servicer, Wells Fargo Bank, N.A. as Master Servicer and
Securities Administrator and HSBC Bank USA, National Association as trustee (the
"Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.

                                     B-1-1

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                 Very truly yours,

                                 [Transferor]

                                 By:
                                     ------------------------------------
                                 Name:
                                 Title:

                                     B-1-2

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                           [Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM2

         Re:      ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM2
                  Asset Backed Pass-Through Certificates Class B-1, Class B-2,
                  Class B-3, Class B-4, Class B-5, Class CE, Class P and Class R
                  Certificates
                  --------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the purchase from
______________________________ (the "Transferor") on the date hereof of the
captioned trust certificates (the "Certificates"), (the "Transferee") hereby
certifies as follows:

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

                           2. The Transferee has been furnished with all
                  information regarding (a) the Certificates and distributions
                  thereon, (b) the nature, performance and servicing of the
                  Mortgage Loans, (c) the Pooling and Servicing Agreement
                  referred to below, and (d) any credit enhancement mechanism
                  associated with the Certificates, that it has requested.

3. The Transferee: (a) is not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") (each, 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 within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R. ss.12510.3-101 or (b) [for Class CE, Class P and Class
R] has provided the Securities Administrator with an opinion of counsel on which
the Trustee, the Depositor, the Master

                                     B-1-3

<PAGE>

Servicer, the Securities Administrator and the Servicer may rely, acceptable to
and in form and substance satisfactory to the Trustee to the effect that the
purchase of Certificates is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Trust Fund, the Trustee, the
Depositor, the Master Servicer, the Securities Administrator or the Servicer to
any obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the Pooling and
Servicing Agreement.] [[for Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5] represents and warrants that it has acquired and is holding such
certificate in reliance on Prohibited Transaction Exemption ("PTE") 2002-41, and
that it understands that there are certain conditions to the availability of PTE
2002-41, including that such certificate must be rated, at the time of purchase,
not lower than "BBB-" (or its equivalent) by S&P, Fitch or Moody's Investors
Service, Inc., and such certificate is so rated, and that it is an "accredited
investor" as defined in Rule 501(a)(1) of Regulation D issued under the
Securities Act and will obtain a representation from any transferee that such
transferee is an accredited investor so long as it is required to obtain a
representation regarding compliance with the Securities Act or (c)(i) it is an
insurance company, (ii) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account," as
such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (iii) the conditions in Sections I and III of PTCE 95-60 have been
satisfied.

                  In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 3 above.

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of December 1, 2004, among ACE Securities Corp. as
Depositor, Wells Fargo Bank, N.A. as Master Servicer and Securities
Administrator, Litton Loan Servicing, LP as Servicer and HSBC Bank USA, National
Association as Trustee, pursuant to which the Certificates were issued.

                                  [TRANSFEREE]

                                  By:
                                      ------------------------------------------
                                  Name:
                                  Title:

                                     B-1-4

<PAGE>

                                                          ANNEX 1 TO EXHIBIT B-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $________________1 in securities
(except for the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Transferee satisfies the criteria in the category
marked below.

         ___      Corporation, etc. The Transferee is a corporation (other than
                  a bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or any
                  organization described in Section 501(c)(3) of the Internal
                  Revenue Code of 1986.

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

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

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

                                     B-1-5

<PAGE>

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

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

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

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

         ___      Investment Advisor The Transferee is an investment advisor
                  registered under the Investment Advisers Act of 1940.

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

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

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

         ___      ___     Will the Transferee be purchasing the Certificates
         Yes      No      only for the Transferee's own account?

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third

                                     B-1-6
<PAGE>

party (including any separate account) in reliance on Rule 144A, the Transferee
will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Transferee agrees that the Transferee will not purchase securities for a
third party unless the Transferee has obtained a current representation letter
from such third party or taken other appropriate steps contemplated by Rule 144A
to conclude that such third party independently meets the definition of
"qualified institutional buyer" set forth in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:
                                         _______________________________________
                                         Print Name of Transferee

                                         By:
                                             -----------------------------------
                                         Name:
                                         Title:

                                     B-1-7
<PAGE>

                                                          ANNEX 2 TO EXHIBIT B-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

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

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

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

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

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

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

                                      B-1-8

<PAGE>

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

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:

                                   Print Name of Transferee or Advisor

                                   By:
                                       ----------------------------------------
                                   Name:
                                   Title:

                                   IF AN ADVISER:

                                   _____________________________________________
                                            Print Name of Transferee

                                      B-1-9

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1. I am an executive officer of the Purchaser.

                  2. The Purchaser is a "qualified institutional buyer", as
         defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
         as amended.

                  3. As of the date specified below (which is not earlier than
         the last day of the Purchaser's most recent fiscal year), the amount of
         "securities", computed for purposes of Rule 144A, owned and invested on
         a discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser
                   -------------------------------------------------------------

By: (Signature)
                 ---------------------------------------------------------------

Name of Signatory
                   -------------------------------------------------------------

Title
       -------------------------------------------------------------------------

Date of this certificate
                          ------------------------------------------------------

Date of information provided in paragraph 3
                                             -----------------------------------

                                     B-1-10

<PAGE>

                             ANNEX 3 TO EXHIBIT B-1

                    FORM OF REGULATION S TRANSFER CERTIFICATE

[Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM2

         Re:      ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM2
                  Asset Backed Pass-Through Certificates, Class
                  B-[1][2][3][4][5] Certificates
                  ------------------------------------------------------------

Ladies and Gentlemen:

                  Reference is hereby made to the Pooling and Servicing
Agreement (the "Agreement"), dated as of December 1, 2004, among ACE Securities
Corp. (the "Depositor"), Wells Fargo Bank, N.A., as master servicer and
securities administrator (the "Master Servicer"), Litton Loan Servicing, LP, as
servicer (the "Servicer") and HSBC Bank USA, National Association, 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-[1][2][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 placement memorandum
dated December 21, 2004 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;

                                     B-1-11

<PAGE>

                  (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.

                                     B-1-12

<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:

                                     B-1-13

<PAGE>

                                   EXHIBIT B-2

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                  ____________, 20__

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM2

         Re:      ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM2
                  Asset Backed Pass-Through Certificates, Class B-1, Class B-2,
                  Class B-3, Class B-4, Class B-5, Class CE, Class P and Class R
                  Certificates
                  --------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:

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

                                      Very truly yours,

                                      (Transferor)

                                      By:
                                          --------------------------------------
                                      Name:
                                      Title:

<PAGE>

                            FORM OF TRANSFEREE LETTER

                                                  _______________, 20__

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-RM2

         Re:      ACE Securities Corp. Home Equity Loan Trust, Series 2004-RM2
                  Asset Backed Pass-Through Certificates, Class B-1, Class B-2,
                  Class B-3, Class B-4, Class B-5, Class CE, Class P and Class R
                  Certificates
                  --------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ______________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferee hereby
certifies as follows:

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

                  2. The Transferee 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 Transferee 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 Transferee has been furnished with, and has had an
         opportunity to review (a) a copy of the Pooling and Servicing Agreement
         and (b) such other information concerning the Certificates, the
         Mortgage Loans and the Depositor as has been requested by the
         Transferee from the Depositor or the Transferor and is relevant to the
         Transferee's decision to purchase the Certificates. The Transferee has
         had any questions arising from

                                     B-2-2

<PAGE>

         such review answered by the Depositor or the Transferor to the
         satisfaction of the Transferee.

                  5. The Transferee 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 1933 Act or any state
         securities law, or that would require registration or qualification
         pursuant thereto. The Transferee will not sell or otherwise transfer
         any of the Certificates, except in compliance with the provisions of
         the Pooling and Servicing Agreement.

                  6. The Transferee: (a) is not an employee benefit or other
         plan subject to the prohibited transaction provisions of the Employee
         Retirement Income Security Act of 1974, as amended ("ERISA"), or
         Section 4975 of the Internal Revenue Code of 1986, as amended (the
         "Code") (each, 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 within the meaning of the Department of Labor
         ("DOL") regulation at 29 C.F.R. ss.12510.3-101 or (b) [[for Class CE,
         Class P and Class R] has provided the Trustee with an opinion of
         counsel on which the Depositor, the Master Servicer, the Securities
         Administrator, the Trustee and the Servicer may rely, acceptable to and
         in form and substance satisfactory to the Trustee to the effect that
         the purchase of Certificates is permissible under applicable law, will
         not constitute or result in any non-exempt prohibited transaction under
         ERISA or Section 4975 of the Code and will not subject the Trust Fund,
         the Trustee, the Master Servicer, the Securities Administrator, the
         Depositor or the Servicer to any obligation or liability (including
         obligations or liabilities under ERISA or Section 4975 of the Code) in
         addition to those undertaken in the Pooling and Servicing Agreement.]
         [[for Class B-1, Class B-2, Class B-3, Class B-4, Class B-5] represents
         and warrants that it has acquired and is holding such certificate in
         reliance on Prohibited Transaction Exemption ("PTE") 2002-41, and that
         it understands that there are certain conditions to the availability of
         PTE 2002-41, including that such certificate must be rated, at the time
         of purchase, not lower than "BBB-" (or its equivalent) by S&P, Fitch or
         Moody's Investors Service, Inc., and such certificate is so rated, and
         that it is an "accredited investor" as defined in Rule 501(a)(1) of
         Regulation D issued under the Securities Act and will obtain a
         representation from any transferee that such transferee is an
         accredited investor so long as it is required to obtain a
         representation regarding compliance with the Securities Act or (c)(i)
         it is an insurance company, (ii) the source of funds used to acquire or
         hold the certificate or interest therein is an "insurance company
         general account," as such term is

                                     B-2-3

<PAGE>

         defined in Prohibited Transaction Class Exemption ("PTCE") 95-60, and
         (iii) the conditions in Sections I and III of PTCE 95-60 have been
         satisfied.]

                  In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 6 above.

                                 Very truly yours,

                                 By:
                                    --------------------------------------------
                                 Name:
                                 Title:

                                     B-2-4

<PAGE>

                                   EXHIBIT B-3

                        TRANSFER AFFIDAVIT AND AGREEMENT

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

                  ___________________________ being duly sworn, deposes,
represents and warrants as follows:

         1.       I am a _____________________ of
                  _______________________________ (the "Owner") a corporation
                  duly organized and existing under the laws of
                  _________________________, the record owner of ACE Securities
                  Corp. Home Equity Loan Trust, Series 2004-RM2 Asset Backed
                  Pass-Through Certificates, Class R Certificates (the "Class R
                  Certificates"), on behalf of whom I make this affidavit and
                  agreement. Capitalized terms used but not defined herein have
                  the respective meanings assigned thereto in the Pooling and
                  Servicing Agreement pursuant to which the Class R Certificates
                  were issued.

         2.       The Owner (i) is and will be a "Permitted Transferee" as of
                  ____________________. ____ and (ii) is acquiring the Class R
                  Certificates for its own account or for the account of another
                  Owner from which it has received an affidavit in substantially
                  the same form as this affidavit. A "Permitted Transferee" is
                  any person other than a "disqualified organization" or a
                  possession of the United States. For this purpose, a
                  "disqualified organization" means the United States, any state
                  or political subdivision thereof, any agency or
                  instrumentality of any of the foregoing (other than an
                  instrumentality all of the activities of which are subject to
                  tax and, except for the Federal Home Loan Mortgage
                  Corporation, a majority of whose board of directors is not
                  selected by any such governmental entity) or any foreign
                  government, international organization or any agency or
                  instrumentality of such foreign government or organization,
                  any real electric or telephone cooperative, or any
                  organization (other than certain farmers' cooperatives) that
                  is generally exempt from federal income tax unless such
                  organization is subject to the tax on unrelated business
                  taxable income.

         3.       The Owner is aware (i) of the tax that would be imposed on
                  transfers of the Class R Certificates to disqualified
                  organizations under the Internal Revenue Code of 1986 that
                  applies to all transfers of the Class R Certificates after
                  April 31, 1988; (ii) that such tax would be on the transferor
                  or, if such transfer is through an agent (which person
                  includes a broker, nominee or middleman) for a non-Permitted
                  Transferee, on the agent; (iii) that the person otherwise
                  liable for the tax shall be relieved of liability for the tax
                  if the transferee furnishes to such person an affidavit that
                  the transferee is a Permitted Transferee and, at the time of
                  transfer, such person does not have actual knowledge that the
                  affidavit is false; and (iv) that each of the Class R
                  Certificates may be a "noneconomic residual interest" within
                  the meaning of proposed Treasury regulations promulgated under
                  the Code

                                     B-3-1

<PAGE>

                  and that the transferor of a "noneconomic residual interest"
                  will remain liable for any taxes due with respect to the
                  income on such residual interest, unless no significant
                  purpose of the transfer is to impede the assessment or
                  collection of tax.

         4.       The Owner is aware of the tax imposed on a "pass-through
                  entity" holding the Class R Certificates if, at any time
                  during the taxable year of the pass-through entity, a
                  non-Permitted Transferee is the record holder of an interest
                  in such entity. (For this purpose, a "pass-through entity"
                  includes a regulated investment company, a real estate
                  investment trust or common trust fund, a partnership, trust or
                  estate, and certain cooperatives.)

         5.       The Owner is aware that the Securities Administrator will not
                  register the transfer of any Class R Certificate unless the
                  transferee, or the transferee's agent, delivers to the
                  Securities Administrator, among other things, an affidavit in
                  substantially the same form as this affidavit. The Owner
                  expressly agrees that it will not consummate any such transfer
                  if it knows or believes that any of the representations
                  contained in such affidavit and agreement are false.

         6.       The Owner consents to any additional restrictions or
                  arrangements that shall be deemed necessary upon advice of
                  counsel to constitute a reasonable arrangement to ensure that
                  the Class R Certificates will only be owned, directly or
                  indirectly, by an Owner that is a Permitted Transferee.

         7.       The Owner's taxpayer identification number is
                  ________________.

         8.       The Owner has reviewed the restrictions set forth on the face
                  of the Class R Certificates and the provisions of Section
                  6.02(d) of the Pooling and Servicing Agreement under which the
                  Class R Certificates were issued (in particular, clauses
                  (iii)(A) and (iii)(B) of Section 6.02(d) which authorize the
                  Securities Administrator to deliver payments to a person other
                  than the Owner and negotiate a mandatory sale by the
                  Securities Administrator in the event that the Owner holds
                  such Certificate in violation of Section 6.02(d)); and that
                  the Owner expressly agrees to be bound by and to comply with
                  such restrictions and provisions.

         9.       The Owner is not acquiring and will not transfer the Class R
                  Certificates in order to impede the assessment or collection
                  of any tax.

         10.      The Owner anticipates that it will, so long as it holds the
                  Class R Certificates, have sufficient assets to pay any taxes
                  owed by the holder of such Class R Certificates, and hereby
                  represents to and for the benefit of the person from whom it
                  acquired the Class R Certificates that the Owner intends to
                  pay taxes associated with holding such Class R Certificates as
                  they become due, fully understanding that it may incur tax
                  liabilities in excess of any cash flows generated by the Class
                  R Certificates.

                                     B-3-2

<PAGE>

         11.      The Owner has no present knowledge that it may become
                  insolvent or subject to a bankruptcy proceeding for so long as
                  it holds the Class R Certificates.

         12.      The Owner has no present knowledge or expectation that it will
                  be unable to pay any United States taxes owed by it so long as
                  any of the Certificates remain outstanding.

         13.      The Owner is not acquiring the Class R Certificates with the
                  intent to transfer the Class R Certificates to any person or
                  entity that will not have sufficient assets to pay any taxes
                  owed by the holder of such Class R Certificates, or that may
                  become insolvent or subject to a bankruptcy proceeding, for so
                  long as the Class R Certificates remain outstanding.

         14.      The Owner will, in connection with any transfer that it makes
                  of the Class R Certificates, obtain from its transferee the
                  representations required by Section 6.02(d) of the Pooling and
                  Servicing Agreement under which the Class R Certificate were
                  issued and will not consummate any such transfer if it knows,
                  or knows facts that should lead it to believe, that any such
                  representations are false.

         15.      The Owner will, in connection with any transfer that it makes
                  of the Class R Certificates, deliver to the Securities
                  Administrator an affidavit, which represents and warrants that
                  it is not transferring the Class R Certificates to impede the
                  assessment or collection of any tax and that it has no actual
                  knowledge that the proposed transferee: (i) has insufficient
                  assets to pay any taxes owed by such transferee as holder of
                  the Class R Certificates; (ii) may become insolvent or subject
                  to a bankruptcy proceeding for so long as the Class R
                  Certificates remains outstanding; and (iii) is not a
                  "Permitted Transferee".

         16.      The Owner is a citizen or resident of the United States, a
                  corporation, partnership or other entity created or organized
                  in, or under the laws of, the United States or any political
                  subdivision thereof, or an estate or trust whose income from
                  sources without the United States may be included in gross
                  income for United States federal income tax purposes
                  regardless of its connection with the conduct of a trade or
                  business within the United States.

         17.      The Owner of the Class R Certificate, hereby agrees that in
                  the event that the Trust Fund created by the Pooling and
                  Servicing Agreement is terminated pursuant to Section 10.01
                  thereof, the undersigned shall assign and transfer to the
                  Holders of the Class CE and the Class P Certificates any
                  amounts in excess of par received in connection with such
                  termination. Accordingly, in the event of such termination,
                  the Securities Administrator is hereby authorized to withhold
                  any such amounts in excess of par and to pay such amounts
                  directly to the Holders of the Class CE and the Class P
                  Certificates. This agreement shall bind and be enforceable
                  against any successor, transferee or assigned of the
                  undersigned in the Class R Certificate. In connection with any
                  transfer of the Class R Certificate, the Owner shall obtain an
                  agreement substantially similar to this clause from any
                  subsequent owner.

                                     B-3-3
<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
_________________, ____.

                                       [OWNER]

                                       By:
                                          --------------------------------------
                                       Name:
                                       Title:            [Vice] President
ATTEST:

By:
    ----------------------------------------
Name:
Title:            [Assistant] Secretary

                  Personally appeared before me the above-named
__________________, known or proved to me to be the same person who executed the
foregoing instrument and to be a [Vice] President of the Owner, 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 Owner.

                  Subscribed and sworn before me this ______________ day of
__________, ____.

                                     ___________________________________________
                                                     Notary Public

                                     County of _________________________________
                                     State of __________________________________

                                     My Commission expires:

                                     B-3-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

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

                  _________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ____________________ of _________________________
(the "Owner"), a corporation duly organized and existing under the laws of
_____________, on behalf of whom I make this affidavit.

                  2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee or a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit B-2. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

                                     B-3-5

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
________________, ____.

                                   [OWNER]

                                   By:
                                       -----------------------------------------
                                   Name:
                                   Title:            [Vice] President
ATTEST:

By:
    ----------------------------------------
Name:
Title.   [Assistant] Secretary

                  Personally appeared before me the above-named
_________________, known or proved to me to be the same person who executed the
foregoing instrument and to be a [Vice] President of the Owner, 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 Owner.

                  Subscribed and sworn before me this ______ day of
_____________, ____.

                                     ___________________________________________
                                                     Notary Public

                                     County of _________________________________
                                     State of __________________________________

                                     My Commission expires:

<PAGE>

                                    EXHIBIT C

                         FORM OF SERVICER CERTIFICATION

Re:      __________ (the "Trust")

         Mortgage Pass-Through Certificates, Series 2004-RM2
         ---------------------------------------------------

I, [identify the certifying individual], certify to ACE Securities Corp. (the
"Depositor"), HSBC Bank USA, National Association (the "Trustee") and Wells
Fargo Bank, National Association (the "Master Servicer"), and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:

         1.       Based on my knowledge, the information in the Annual Statement
                  of Compliance, the Annual Independent Public Accountant's
                  Servicing Report and all servicing reports, officer's
                  certificates and other information relating to the servicing
                  of the Mortgage Loans submitted to the Master Servicer taken
                  as a whole, does not contain any untrue statement of a
                  material fact or omit to state a material fact (constituting
                  information required to be provided by Litton Loan Servicing,
                  LP (the "Servicer") under the Agreement) necessary to make the
                  statements made, in light of the circumstances under which
                  such statements were made, not misleading as of the date of
                  this certification.

         2.       Based on my knowledge, the servicing information required to
                  be provided to Master Servicer by the Servicer under the
                  Agreement has been provided to the Master Servicer.

         3.       I am responsible for reviewing the activities performed by the
                  Servicer under the Agreement and based upon my knowledge and
                  the review required by the Agreement, and except as disclosed
                  in the Annual Statement of Compliance or the Annual
                  Independent Public Accountant's Servicing Report submitted to
                  the Master Servicer, the Servicer has fulfilled its
                  obligations under the Agreement; and

         4.       I have disclosed to the Master Servicer all significant
                  deficiencies relating to the servicer's compliance with the
                  minimum servicing standards in accordance with a review
                  conducted in compliance with the Uniform Single Attestation
                  Program for Mortgage Bankers or similar standard as set forth
                  in the pooling and servicing agreement.

Capitalized terms used and not otherwise defined herein have the meanings
assigned thereto in the Pooling and Servicing Agreement, dated as of December 1,
2004, among ACE Securities Corp., Litton Loan Servicing, LP, Wells Fargo Bank,
N.A. and HSBC Bank USA, National Association

                                      C-1

<PAGE>

Date:  ______________________________________________

_____________________________________________________
[Signature]

_____________________________________________________
[Title]

                                      C-2

<PAGE>

                                    EXHIBIT D

                            FORM OF POWER OF ATTORNEY

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
Litton Loan Servicing, LP 4828
Loop Central Drive,
Houston, Texas 77081
Attn: _________________________________

                            LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that , having its principal place of business at
, as Trustee (the "Trustee") pursuant to that Pooling and Servicing Agreement
among (the "Depositor"), Litton Loan Servicing, LP (the "Servicer"), and the
Trustee, dated as of December 1, 2004 (the "Pooling and Servicing Agreement"),
hereby constitutes and appoints the Servicer, by and through the Servicer's
officers, the Trustee's true and lawful Attorney-in-Fact, in the Trustee's name,
place and stead and for the Trustee's benefit, in connection with all mortgage
loans serviced by the Servicer pursuant to the Pooling and Servicing Agreement
for the purpose of performing all acts and executing all documents in the name
of the Trustee as may be customarily and reasonably necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust",
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing Agreement.

This appointment shall apply to the following enumerated transactions only:

1.       The modification or re-recording of a Mortgage or Deed of Trust, where
         said modification or re-recordings is for the purpose of correcting the
         Mortgage or Deed of Trust to conform same to the original intent of the
         parties thereto or to correct title errors discovered after such title
         insurance was issued and said modification or re-recording, in either
         instance, does not adversely affect the lien of the Mortgage or Deed of
         Trust as insured.

2.       The subordination of the lien of a Mortgage or Deed of Trust to an
         easement in favor of a public utility company of a government agency or
         unit with powers of eminent domain; this section shall include, without
         limitation, the execution of partial

                                       D-1

<PAGE>

         satisfactions/releases, partial reconveyances or the execution or
         requests to trustees to accomplish same.

3.       The conveyance of the properties to the mortgage insurer, or the
         closing of the title to the property to be acquired as real estate
         owned, or conveyance of title to real estate owned.

4.       The completion of loan assumption agreements.

5.       The full satisfaction/release of a Mortgage or Deed of Trust or full
         conveyance upon payment and discharge of all sums secured thereby,
         including, without limitation, cancellation of the related Mortgage
         Note.

6.       The assignment of any Mortgage or Deed of Trust and the related
         Mortgage Note, in connection with the repurchase of the mortgage loan
         secured and evidenced thereby.

7.       The full assignment of a Mortgage or Deed of Trust upon payment and
         discharge of all sums secured thereby in conjunction with the
         refinancing thereof, including, without limitation, the assignment of
         the related Mortgage Note.

8.       With respect to a Mortgage or Deed of Trust, the foreclosure, the
         taking of a deed in lieu of foreclosure, or the completion of judicial
         or non-judicial foreclosure or termination, cancellation or rescission
         of any such foreclosure, including, without limitation, any and all of
         the following acts:

         a.       the substitution of trustee(s) serving under a Deed of Trust,
                  in accordance with state law and the Deed of Trust;

         b.       the preparation and issuance of statements of breach or
                  non-performance;

         c.       the preparation and filing of notices of default and/or
                  notices of sale;

         d.       the cancellation/rescission of notices of default and/or
                  notices of sale;

         e.       the taking of a deed in lieu of foreclosure; and

         f.       the preparation and execution of such other documents and
                  performance of such other actions as may be necessary under
                  the terms of the Mortgage, Deed of Trust or state law to
                  expeditiously complete said transactions in paragraphs 8.a.
                  through 8.e., above.

The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.

                                       D-2

<PAGE>

Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.

IN WITNESS WHEREOF, as Trustee pursuant to that Pooling and Servicing Agreement
among the Depositor, the Servicer, and the Trustee, dated as of 1, 200__ (
 Mortgage Loan Asset Backed Certificates, Series 200__-___), has caused its
corporate seal to be hereto affixed and these presents to be signed and
acknowledged in its name and behalf by its duly elected and authorized Vice
President this day of , 200__.

                                       ________________________________________
                                       as Trustee for _____ Mortgage Loan Asset
                                       Backed Certificates, Series 200__-___

                                       By __________________________________

STATE OF __________________

COUNTY OF _________________

On ______________ ______, 200__, before me, the undersigned, a Notary Public in
and for said state, personally appeared ___________________________, Vice
President of ________________________________ as Trustee for ___________
Mortgage Loan Asset Backed Certificates, Series 200__-___, personally known to
me to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed that same in his/her authorized
capacity, and that by his/her signature on the instrument the entity upon behalf
of which the person acted and executed the instrument.

WITESS my hand and official seal.
         (SEAL)
                                           _____________________________________
                                                                   Notary Public
                                       My Commission Expires ___________________

                                       D-3

<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                       D-4
<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                                       D-5

<PAGE>

                                   SCHEDULE 3

                                   [RESERVED]

                                       D-6

<PAGE>

                                   SCHEDULE 4

                   STANDARD FILE LAYOUT- DELINQUENCY REPORTING

EXHIBIT 1: STANDARD FILE LAYOUT - DELINQUENCY REPORTING

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
COLUMN/HEADER NAME                                     DESCRIPTION                             DECIMAL     FORMAT COMMENT
---------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                                                                 <C>               <C>
SERVICER_LOAN_NBR             A unique  number  assigned  to a loan by the  Servicer.  This
                              may be different than the LOAN_NBR
---------------------------------------------------------------------------------------------------------------------------
LOAN_NBR                      A unique identifier assigned to each loan by the originator.
---------------------------------------------------------------------------------------------------------------------------
CLIENT_NBR                    Servicer Client Number
---------------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR             Contains a unique number as
                              assigned by an external servicer
                              to identify a group of loans in
                              their system.
---------------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME           First Name of the Borrower.
---------------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME            Last name of the borrower.
---------------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS                  Street Name and Number of Property
---------------------------------------------------------------------------------------------------------------------------
PROP_STATE                    The state where the  property located.
---------------------------------------------------------------------------------------------------------------------------
PROP_ZIP                      Zip code where the property is located.
---------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE        The date that the borrower's next
                              payment is due to the MM/DD/YYYY
                              servicer at the end of processing
                              cycle, as reported by Servicer.
---------------------------------------------------------------------------------------------------------------------------
LOAN_TYPE                     Loan Type (i.e. FHA, VA, Conv)
---------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE         The date a particular bankruptcy claim was filed.                            MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE       The chapter under which the bankruptcy was filed.
---------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR           The case  number  assigned  by the  court  to the  bankruptcy
                              filing.
---------------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE        The payment due date once the  bankruptcy  has been  approved                MM/DD/YYYY
                              by the courts
---------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE    The Date The  Loan Is  Removed  From  Bankruptcy.  Either  by                MM/DD/YYYY
                              Dismissal,   Discharged   and/or  a  Motion  For  Relief  Was
                              Granted.
---------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE            The Date The Loss Mitigation Was Approved By The Servicer                    MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE                 The Type Of Loss Mitigation Approved For A Loan Such As;
---------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE        The Date The Loss Mitigation /Plan Is Scheduled To End/Close                 MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE        The Date The Loss Mitigation Is Actually Completed                           MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE          The date DA Admin sends a letter
                              to the servicer with MM/DD/YYYY
                              instructions to begin foreclosure
                              proceedings.
---------------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE        Date File Was Referred To Attorney to Pursue Foreclosure                     MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE              Notice of 1st legal  filed by an  Attorney  in a  Foreclosure                MM/DD/YYYY
                              Action
---------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE     The date by which a foreclosure sale is expected to occur.                   MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE              The actual date of the foreclosure sale.                                     MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT               The amount a property sold for at the foreclosure sale.             2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE           The date the servicer initiates eviction of the borrower.                    MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE       The date the court revokes legal
                              possession of the property
                              MM/DD/YYYY from the borrower.
---------------------------------------------------------------------------------------------------------------------------
LIST_PRICE                    The price at which an REO property is marketed.                     2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
LIST_DATE                     The date an REO property is listed at a particular price.                    MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      D-7

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                                                                 <C>               <C>
OFFER_AMT                     The dollar value of an offer for an REO property.                   2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME               The date an offer is received by DA Admin or by the Servicer.                MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE              The date the REO sale of the property is scheduled to close.                 MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE       Actual Date Of REO Sale                                                      MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE                 Classification of how the property is occupied.
---------------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE           A code that indicates the  condition of the property.
---------------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE          The date A property inspection is performed.                                 MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
APPRAISAL_DATE                The date the appraisal was done.                                             MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL                 The current "as is" value of the  property  based on brokers       2
                              price opinion or appraisal.
---------------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL             The amount the property would be
                              worth if repairs are 2 completed
                              pursuant to a broker's price
                              opinion or appraisal.
---------------------------------------------------------------------------------------------------------------------------
IF APPLICABLE:
---------------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE            FNMA Code Describing Status of Loan
---------------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE            The circumstances which caused a
                              borrower to stop paying on a loan.
                              Code indicates the reason why the
                              loan is in default for this cycle.
---------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE           Date  Mortgage   Insurance  Claim  Was  Filed  With  Mortgage                MM/DD/YYYY
                              Insurance Company.
---------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT                  Amount of Mortgage Insurance Claim Filed                                     No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE            Date Mortgage Insurance Company Disbursed Claim Payment                      MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID             Amount Mortgage Insurance Company Paid On Claim                     2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE         Date Claim Was Filed With Pool Insurance Company                             MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT                Amount of Claim Filed With Pool Insurance Company                   2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE          Date Claim Was  Settled  and The Check Was Issued By The Pool                MM/DD/YYYY
                              Insurer
---------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID           Amount Paid On Claim By Pool Insurance Company                      2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE   Date FHA Part A Claim Was Filed With HUD                                     MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT          Amount of FHA Part A Claim Filed                                    2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE    Date HUD Disbursed Part A Claim Payment                                      MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT     Amount HUD Paid on Part A Claim                                     2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE   Date FHA Part B Claim Was Filed With HUD                                     MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT          Amount of FHA Part B Claim Filed                                    2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE    Date HUD Disbursed Part B Claim Payment                                      MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT     Amount HUD Paid on Part B Claim                                     2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE           Date VA Claim Was Filed With the Veterans Admin                              MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE            Date Veterans Admin. Disbursed VA Claim Payment                              MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT             Amount Veterans Admin. Paid on VA Claim                             2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      D-8

<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING

The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:

         o        ASUM- Approved Assumption
         o        BAP- Borrower Assistance Program
         o        CO- Charge Off
         o        DIL- Deed-in-Lieu
         o        FFA- Formal Forbearance Agreement
         o        MOD- Loan Modification
         o        PRE- Pre-Sale
         o        SS- Short Sale
         o        MISC- Anything else approved by the PMI or Pool Insurer

NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Wells
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.

The OCCUPANT CODE field should show the current status of the property code as
follows:

         o        Mortgagor
         o        Tenant
         o        Unknown
         o        Vacant

The PROPERTY CONDITION field should show the last reported condition of the
property as follows:

         o        Damaged
         o        Excellent
         o        Fair
         o        Gone
         o        Good
         o        Poor
         o        Special Hazard
         o        Unknown

                                      D-9
<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:

      ------------------------------------------------------------------
      DELINQUENCY CODE        DELINQUENCY DESCRIPTION
      ------------------------------------------------------------------
      001                     FNMA-Death of principal mortgagor
      ------------------------------------------------------------------
      002                     FNMA-Illness of principal mortgagor
      ------------------------------------------------------------------
      003                     FNMA-Illness of mortgagor's family member
      ------------------------------------------------------------------
      004                     FNMA-Death of mortgagor's family member
      ------------------------------------------------------------------
      005                     FNMA-Marital difficulties
      ------------------------------------------------------------------
      006                     FNMA-Curtailment of income
      ------------------------------------------------------------------
      007                     FNMA-Excessive Obligation
      ------------------------------------------------------------------
      008                     FNMA-Abandonment of property
      ------------------------------------------------------------------
      009                     FNMA-Distant employee transfer
      ------------------------------------------------------------------
      011                     FNMA-Property problem
      ------------------------------------------------------------------
      012                     FNMA-Inability to sell property
      ------------------------------------------------------------------
      013                     FNMA-Inability to rent property
      ------------------------------------------------------------------
      014                     FNMA-Military Service
      ------------------------------------------------------------------
      015                     FNMA-Other
      ------------------------------------------------------------------
      016                     FNMA-Unemployment
      ------------------------------------------------------------------
      017                     FNMA-Business failure
      ------------------------------------------------------------------
      019                     FNMA-Casualty loss
      ------------------------------------------------------------------
      022                     FNMA-Energy environment costs
      ------------------------------------------------------------------
      023                     FNMA-Servicing problems
      ------------------------------------------------------------------
      026                     FNMA-Payment adjustment
      ------------------------------------------------------------------
      027                     FNMA-Payment dispute
      ------------------------------------------------------------------
      029                     FNMA-Transfer of ownership pending
      ------------------------------------------------------------------
      030                     FNMA-Fraud
      ------------------------------------------------------------------
      031                     FNMA-Unable to contact borrower
      ------------------------------------------------------------------
      INC                     FNMA-Incarceration
      ------------------------------------------------------------------

                                      D-10

<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:

      ------------------------------------------------------------------
            STATUS CODE       STATUS DESCRIPTION
      ------------------------------------------------------------------
                09            Forbearance
      ------------------------------------------------------------------
                17            Pre-foreclosure Sale Closing Plan Accepted
      ------------------------------------------------------------------
                24            Government Seizure
      ------------------------------------------------------------------
                26            Refinance
      ------------------------------------------------------------------
                27            Assumption
      ------------------------------------------------------------------
                28            Modification
      ------------------------------------------------------------------
                29            Charge-Off
      ------------------------------------------------------------------
                30            Third Party Sale
      ------------------------------------------------------------------
                31            Probate
      ------------------------------------------------------------------
                32            Military Indulgence
      ------------------------------------------------------------------
                43            Foreclosure Started
      ------------------------------------------------------------------
                44            Deed-in-Lieu Started
      ------------------------------------------------------------------
                49            Assignment Completed
      ------------------------------------------------------------------
                61            Second Lien Considerations
      ------------------------------------------------------------------
                62            Veteran's Affairs-No Bid
      ------------------------------------------------------------------
                63            Veteran's Affairs-Refund
      ------------------------------------------------------------------
                64            Veteran's Affairs-Buydown
      ------------------------------------------------------------------
                65            Chapter 7 Bankruptcy
      ------------------------------------------------------------------
                66            Chapter 11 Bankruptcy
      ------------------------------------------------------------------
                67            Chapter 13 Bankruptcy
      ------------------------------------------------------------------

                                      D-11

<PAGE>

EXHIBIT 3: CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET

         (a)      The numbers on the form correspond with the numbers listed
                  below.

         Liquidation and Acquisition Expenses:
         1.       The Actual Unpaid Principal Balance of the Mortgage Loan. For
                  documentation, an Amortization Schedule from date of default
                  through liquidation breaking out the net interest and
                  servicing fees advanced is required.

         2.       The Total Interest Due less the aggregate amount of servicing
                  fee that would have been earned if all delinquent payments had
                  been made as agreed. For documentation, an Amortization
                  Schedule from date of default through liquidation breaking out
                  the net interest and servicing fees advanced is required.

         3.       Accrued Servicing Fees based upon the Scheduled Principal
                  Balance of the Mortgage Loan as calculated on a monthly basis.
                  For documentation, an Amortization Schedule from date of
                  default through liquidation breaking out the net interest and
                  servicing fees advanced is required.

         4-12.    Complete as applicable. All line entries must be supported by
                  copies of appropriate statements, vouchers, receipts, bills,
                  canceled checks, etc., to document the expense. Entries not
                  properly documented will not be reimbursed to the Servicer.

         13.      The total of lines 1 through 12.

         (b)      Credits:

         14-21.   Complete as applicable. All line entries must be supported by
                  copies of the appropriate claims forms, EOBs, HUD-1 and/or
                  other proceeds verification, statements, payment checks, etc.
                  to document the credit. If the Mortgage Loan is subject to a
                  Bankruptcy Deficiency, the difference between the Unpaid
                  Principal Balance of the Note prior to the Bankruptcy
                  Deficiency and the Unpaid Principal Balance as reduced by the
                  Bankruptcy Deficiency should be input on line 20.

         22.      The total of lines 14 through 21.

         Please   note: For HUD/VA loans, use line (15) for Part A/Initial
                  proceeds and line (16) for Part B/Supplemental proceeds.
         (c)      Total Realized Loss (or Amount of Any Gain)

         23.      The total derived from subtracting line 22 from 13. If the
                  amount represents a realized gain, show the amount in
                  parenthesis ( ).

                                      D-12

<PAGE>

EXHIBIT 3A: CALCULATION OF REALIZED LOSS/GAIN FORM 332

                             WELLS FARGO BANK, N.A.
                        CALCULATION OF REALIZED LOSS/GAIN

         Prepared by:  __________________            Date:  _______________
         Phone:  ______________________   Email Address:_____________________

          ------------------       -----------------       --------------------
          Servicer Loan No.        Servicer Name           Servicer Address

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

<TABLE>
<CAPTION>
         WELLS FARGO BANK, N.A. Loan No.___________________
         Borrower's Name:______________________________________________
         Property Address:______________________________________________________
         LIQUIDATION AND ACQUISITION EXPENSES:
<S>                                                                    <C>
         (1)  Actual Unpaid Principal Balance of Mortgage Loan         $ ______________ (1)
         (2)  Interest accrued at Net Rate                             ________________ (2)
         (3)  Accrued Servicing Fees                                   ________________ (3)
         (4)  Attorney's Fees                                          ________________ (4)
         (5)  Taxes                                                    ________________ (5)
         (6)  Property Maintenance                                     ________________ (6)
         (7)  MI/Hazard Insurance Premiums                             ________________ (7)
         (8)  Utility Expenses                                         ________________ (8)
         (9)  Appraisal/BPO                                            ________________ (9)
         (10) Property Inspections                                     ________________ (10)
         (11) FC Costs/Other Legal Expenses                            ________________ (11)
         (12) Other (itemize)                                          $________________(12)
                  Cash for Keys__________________________              ________________
                  HOA/Condo Fees_______________________                ________________
                  TOTAL EXPENSES                                       $_______________ (13)
         CREDITS:
         (14) Escrow Balance                                           $_______________ (14)
         (15) HIP Refund                                               ________________ (15)
         (16) Rental Receipts                                          ________________ (16)
         (17) Hazard Loss Proceeds                                     ________________ (17)
         (18) Primary Mortgage Insurance Proceeds                      ________________ (18)
         (19) Pool Insurance Proceeds                                  ________________ (19)
         (20) Proceeds from Sale of Acquired Property                  ________________ (20)
         (21) Other (itemize)                                          ________________ (21)
              ______________________________________                   ________________
              ______________________________________                   ________________
              TOTAL CREDITS                                            $_______________ (22)

         TOTAL REALIZED LOSS (OR AMOUNT OF GAIN)                       $_______________ (23)
</TABLE>

                                      D-13

<PAGE>

                                   SCHEDULE 5

                    STANDARD FILE LAYOUT- SCHEDULED/SCHEDULED

EXHIBIT 1: STANDARD FILE LAYOUT - SCHEDULED/SCHEDULED
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
COLUMN NAME                                       DESCRIPTION                       DECIMAL   FORMAT COMMENT
----------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>                                                            <C>
LOAN_NBR                       Loan Number assigned by investor                               Text up to 10 digits
----------------------------------------------------------------------------------------------------------------------------------
SERVICER LOAN_NBR              Servicer Loan Number                                           Text up to 10 digits
----------------------------------------------------------------------------------------------------------------------------------
BORROWER_NAME                  Mortgagor name assigned to Note                                Max length of 30
----------------------------------------------------------------------------------------------------------------------------------
SCHED_PMT_AMT                  P&I constant                                            2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE                  Gross Interest Rate                                     4      Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
NET_RATE                       Gross Interest Rate less the Service Fee Rate           4      Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE                  Service Fee Rate                                        4      Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT                    ARM loan's forecasted P&I constant                      2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE                  ARM loan's forecasted Gross Interest Rate               4      Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE                 ARM loan's index Rate used                              4      Max length of 6
----------------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_BAL                   Beginning Actual Balance                                2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
ACTL_END_BAL                   Ending Actual Balance                                   2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
NEXT_DUE_DATE                  Borrower's next due date                                       MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_1                     Curtailment Amount                                      2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_1                    Due date Curtailment was applied to                            MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1                Curtailment Interest if applicable                      2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_2                     Curtailment Amount 2                                    2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_2                    Due date Curtailment was applied to                            MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT2                 Curtailment Interest if applicable                      2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_3                     Curtailment Amount 3                                    2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_3                    Due date Curtailment was applied to                            MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT3                  Curtailment Interest, if applicable                     2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_BAL                  Beginning Scheduled Balance                             2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
SCHED_END_BAL                  Ending Scheduled Balance                                2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT                 Scheduled Principal portion of P&I                      2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
                               Scheduled   Net  Interest   (less   Service  Fee)
SCHED_NET_INT                  portion of P&I                                          2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
                               Liquidation  Principal  Amt to bring  balance  to
LIQ_AMT                        zero                                                    2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
PIF_DATE                       Liquidation Date                                               MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
ACTION_CODE                    Either 60 for liquidation or 65 for Repurchase                 Max length of 2
----------------------------------------------------------------------------------------------------------------------------------
PRIN_ADJ_AMT                   Principal Adjustments made to loan, if applicable       2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT                    Interest Adjustment made to loan, if applicable         2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT PENALTY AMT         Prepayment penalty amount, if applicable                2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
                               Soldier   and  Sailor   Adjustment   amount,   if
SOILDER_SAILOR ADJ AMT         applicable                                              2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
NON ADV LOAN AMT               Non Recoverable Loan Amount, if applicable              2      No commas(,) or dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      D-14================================================================================

                 CWABS ASSET-BACKED CERTIFICATES TRUST 2004-BC5

                                     Issuer

                                  CWABS, INC.,

                                    Depositor

                          COUNTRYWIDE HOME LOANS, INC.,

                                     Seller

                      COUNTRYWIDE HOME LOANS SERVICING LP,

                                 Master Servicer

                                       and

                              THE BANK OF NEW YORK,

                                     Trustee

                     ______________________________________

                         POOLING AND SERVICING AGREEMENT

                          Dated as of December 1, 2004

                     ______________________________________

                   ASSET-BACKED CERTIFICATES, SERIES 2004-BC5

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

<PAGE>

                                TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----

                                    ARTICLE I

                                   DEFINITIONS
   Section 1.01   Defined Terms................................................4

                                   ARTICLE II

          CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
   Section 2.01   Conveyance of Mortgage Loans................................51
   Section 2.02   Acceptance of the Mortgage Loans............................55
   Section 2.03   Representations, Warranties and Covenants
                  of the Master Servicer and the Seller.......................57
   Section 2.04   Representations and Warranties of the Depositor.............68
   Section 2.05   Delivery of Opinion of Counsel in Connection
                  with Substitutions and Repurchases..........................70
   Section 2.06   Authentication and Delivery of Certificates.................70
   Section 2.07   Covenants of the Master Servicer............................71

                                   ARTICLE III

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
   Section 3.01   Master Servicer to Service Mortgage Loans...................72
   Section 3.02   Subservicing; Enforcement of the
                  Obligations of Master Servicer..............................73
   Section 3.03   Rights of the Depositor, the Seller and the
                  Trustee in Respect of the Master Servicer...................73
   Section 3.04   Trustee to Act as Master Servicer...........................74
   Section 3.05   Collection of Mortgage Loan Payments; Certificate
                  Account; Distribution Account; Seller Shortfall
                  Interest Requirement........................................74
   Section 3.06   Collection of Taxes, Assessments and
                  Similar Items; Escrow Accounts..............................77
   Section 3.07   Access to Certain Documentation and
                  Information Regarding the Mortgage Loans....................77
   Section 3.08   Permitted Withdrawals from the Certificate Account,
                  Distribution Account and the Carryover Reserve Fund.........78
   Section 3.09   [Reserved.].................................................80
   Section 3.10   Maintenance of Hazard Insurance.............................80
   Section 3.11   Enforcement of Due-On-Sale Clauses;
                  Assumption Agreements.......................................81
   Section 3.12   Realization Upon Defaulted Mortgage Loans;
                  Determination of Excess Proceeds and Realized Losses;
                  Repurchase of Certain Mortgage Loans........................82
   Section 3.13   Trustee to Cooperate; Release of Mortgage Files.............85
   Section 3.14   Documents, Records and Funds in Possession of
                  Master Servicer to be Held for the Trustee..................86
   Section 3.15   Servicing Compensation......................................86
   Section 3.16   Access to Certain Documentation.............................86

                                       i
<PAGE>

   Section 3.17   Annual Statement as to Compliance...........................87
   Section 3.18   Annual Independent Public Accountants'
                  Servicing Statement; Financial Statements...................87
   Section 3.19   The Cap Contracts...........................................87
   Section 3.20   Prepayment Charges..........................................88

                                   ARTICLE IV

               DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
   Section 4.01   Advances....................................................90
   Section 4.02   Reduction of Servicing Compensation in
                  Connection with Prepayment Interest Shortfalls..............91
   Section 4.03   [Reserved]..................................................91
   Section 4.04   Distributions...............................................91
   Section 4.05   Monthly Statements to Certificateholders....................96
   Section 4.06   [Reserved]..................................................98
   Section 4.07   [Reserved]..................................................98
   Section 4.08   Carryover Reserve Fund......................................98
   Section 4.09   Distributions on the REMIC I Regular Interests..............99
   Section 4.10   [Reserved].................................................101
   Section 4.11   Allocation of Realized Losses on
                  the REMIC Regular Interests................................101
   Section 4.12   The Class P Certificates...................................101

                                    ARTICLE V

                                THE CERTIFICATES
   Section 5.01   The Certificates...........................................103
   Section 5.02   Certificate Register; Registration of
                  Transfer and Exchange of Certificates......................104
   Section 5.03   Mutilated, Destroyed, Lost or Stolen Certificates..........107
   Section 5.04   Persons Deemed Owners......................................108
   Section 5.05   Access to List of Certificateholders'
                  Names and Addresses........................................108
   Section 5.06   Book-Entry Certificates....................................108
   Section 5.07   Notices to Depository......................................109
   Section 5.08   Definitive Certificates....................................109
   Section 5.09   Maintenance of Office or Agency............................110

                                   ARTICLE VI

               THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
   Section 6.01   Respective Liabilities of the Depositor,
                  the Master Servicer and the Seller.........................111
   Section 6.02   Merger or Consolidation of the Depositor,
                  the Master Servicer or the Seller..........................111
   Section 6.03   Limitation on Liability of the Depositor,
                  the Seller, the Master Servicer and Others.................111

                                       ii
<PAGE>

   Section 6.04   Limitation on Resignation of Master Servicer...............112
   Section 6.05   Errors and Omissions Insurance; Fidelity Bonds.............112

                                   ARTICLE VII

                    DEFAULT; TERMINATION OF MASTER SERVICER
   Section 7.01   Events of Default..........................................113
   Section 7.02   Trustee to Act; Appointment of Successor...................114
   Section 7.03   Notification to Certificateholders.........................116

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE
   Section 8.01   DUTIES OF TRUSTEE..........................................117
   Section 8.02   Certain Matters Affecting the Trustee......................118
   Section 8.03   Trustee Not Liable for Mortgage Loans......................119
   Section 8.04   Trustee May Own Certificates...............................119
   Section 8.05   Master Servicer to Pay Trustee's Fees and Expenses.........119
   Section 8.06   Eligibility Requirements for Trustee.......................120
   Section 8.07   Resignation and Removal of Trustee.........................120
   Section 8.08   Successor Trustee..........................................121
   Section 8.09   Merger or Consolidation of Trustee.........................121
   Section 8.10   Appointment of Co-Trustee or Separate Trustee..............122
   Section 8.11   Tax Matters................................................123

                                   ARTICLE IX

                                  TERMINATION
   Section 9.01   Termination upon Liquidation or Repurchase
                  of all Mortgage Loans......................................126
   Section 9.02   Final Distribution on the Certificates.....................126
   Section 9.03   Additional Termination Requirements........................127

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS
   Section 10.01  Amendment..................................................129
   Section 10.02  Recordation of Agreement; Counterparts.....................130
   Section 10.03  Governing Law..............................................130
   Section 10.04  Intention of Parties.......................................131
   Section 10.05  Notices....................................................131
   Section 10.06  Severability of Provisions.................................132
   Section 10.07  Assignment.................................................132
   Section 10.08  Limitation on Rights of Certificateholders.................132
   Section 10.09  Inspection and Audit Rights................................133
   Section 10.10  Certificates Nonassessable and Fully Paid..................133

                                      iii

<PAGE>

                                    EXHIBITS

EXHIBIT A-1       Form of Class A-1 Certificate
EXHIBIT A-2       Form of Class A-2 Certificate
EXHIBIT A-3       Form of Class A-3 Certificate
EXHIBIT A-4       Form of Class M-1 Certificate
EXHIBIT A-5       Form of Class M-2 Certificate
EXHIBIT A-6       Form of Class M-3 Certificate
EXHIBIT A-7       Form of Class M-4 Certificate
EXHIBIT A-8       Form of Class M-5 Certificate
EXHIBIT A-9       Form of Class M-6 Certificate
EXHIBIT A-10      Form of Class M-7 Certificate
EXHIBIT A-11      Form of Class M-8 Certificate
EXHIBIT A-12      Form of Class B Certificate
EXHIBIT B         Form of Class C Certificate
EXHIBIT C         Form of Class P Certificate
EXHIBIT D         Form of Class A-R Certificate
EXHIBIT E         Form of Tax Matters Person Certificate
EXHIBIT F         Mortgage Loan Schedules
EXHIBIT F-1       List of Mortgage Loans
EXHIBIT           F-2 Mortgage Loans for which All or a Portion of a
                  Related Mortgage File is not Delivered to the Trustee
                  on or prior to the Closing Date
EXHIBIT G         Forms of Certification of Trustee
EXHIBIT G-1       Form of Initial Certification of Trustee
EXHIBIT G-2       Form of Interim Certification of Trustee
EXHIBIT G-3       Form of Delay Delivery Certification
EXHIBIT G-4       [Reserved]
EXHIBIT H         Form of Final Certification of Trustee
EXHIBIT I         Transfer Affidavit
EXHIBIT J-1       Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2       Form of Transferor Certificate for Private Certificates
EXHIBIT K         Form of Investment Letter (Non-Rule 144A)
EXHIBIT L         Form of Rule 144A Letter
EXHIBIT M         Request for Release (for Trustee)
EXHIBIT N         Request for Release (for Mortgage Loans Paid in
                  Full, Repurchased or Replaced)
EXHIBIT O         Copy of Depositary Agreement
EXHIBIT P         Form of Mortgage Note and Mortgage
EXHIBIT Q         Notional Balance Schedule
EXHIBIT R         Forms of Class A-1 Cap Contract and Corridor Contract
EXHIBIT S         Forms of Class A-1 Cap Contract Assignment Agreement
                  and Corridor Contract Assignment Agreement
EXHIBIT T         Officer's Certificate with Respect to Prepayments
EXHIBIT U         Standard & Poor's Glossary

                                       iv
<PAGE>

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

                             PRELIMINARY STATEMENT:

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

                                     REMIC I

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (exclusive of the Class A-1 Cap Contract, the Corridor Contract
and the Carryover Reserve Fund) subject to this Agreement as a real estate
mortgage investment conduit (a "REMIC") for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC I." The Class R-I
Interest will represent the sole class of "residual interests" in REMIC I for
purposes of the REMIC Provisions (as defined herein) under federal income tax
law. The following table irrevocably sets forth the designation, remittance rate
(the "Uncertificated REMIC I Pass-Through Rate") and initial Uncertificated
Principal Balance for each of the "regular interests" in REMIC I (the "REMIC I
Regular Interests"). The "latest possible maturity date" (determined solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each
REMIC I Regular Interest shall be the 360th Distribution Date. None of the REMIC
I Regular Interests will be certificated.

<TABLE>
<CAPTION>
                           Uncertificated REMIC I         Uncertificated                  Latest Possible
      Designation             Pass-through Rate          Principal Balance                 Maturity Date
      -----------             -----------------          -----------------                 -------------
<S>                                  <C>                <C>                               <C>
         LT-AA                       (1)                $      745,831,713.75             December 25, 2034
         LT-A1                       (1)                $        2,950,000.00             December 25, 2034
         LT-A2                       (1)                $        2,524,670.00             December 25, 2034
         LT-A3                       (1)                $          883,930.00             December 25, 2034
         LT-M1                       (1)                $          262,560.00             December 25, 2034
         LT-M2                       (1)                $          243,540.00             December 25, 2034
         LT-M3                       (1)                $          136,990.00             December 25, 2034
         LT-M4                       (1)                $          125,570.00             December 25, 2034
         LT-M5                       (1)                $          133,180.00             December 25, 2034
         LT-M6                       (1)                $          114,160.00             December 25, 2034
         LT-M7                       (1)                $           83,720.00             December 25, 2034
         LT-M8                       (1)                $           76,110.00             December 25, 2034
          LT-B                       (1)                $           76,090.00             December 25, 2034
         LT-ZZ                       (1)                $        7,610,535.38             December 25, 2034
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                           Uncertificated REMIC I         Uncertificated                  Latest Possible
      Designation             Pass-through Rate          Principal Balance                 Maturity Date
      -----------             -----------------          -----------------                 -------------
<S>                                  <C>                <C>                               <C>
          LT-P                       (1)                $              100.00             December 25, 2034
          LT-R                       (1)                $              100.00             December 25, 2034
</TABLE>
---------------
(1) Calculated as provided in the definition of Uncertificated REMIC I Pass-
Through Rate.
(2) Calculated as provided in the definition of Uncertificated
Notional Amount.

                                    REMIC II

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

<TABLE>
<CAPTION>
                                                      Aggregate Initial Certificate          Final Scheduled
      Designation            Pass-Through Rate              Principal Balance               Distribution Date
  --------------------    -----------------------     -----------------------------         -----------------
<S>                                 <C>              <C>            <C>                      <C>
       Class A-1                    (1)              $              295,000,000.00          December 25, 2034
       Class A-2                    (1)              $              252,467,000.00          December 25, 2034
       Class A-3                    (1)              $               88,393,000.00          December 25, 2034
       Class M-1                    (1)              $               26,256,000.00          December 25, 2034
       Class M-2                    (1)              $               24,354,000.00          December 25, 2034
       Class M-3                    (1)              $               13,699,000.00          December 25, 2034
       Class M-4                    (1)              $               12,557,000.00          December 25, 2034
       Class M-5                    (1)              $               13,318,000.00          December 25, 2034
       Class M-6                    (1)              $               11,416,000.00          December 25, 2034
       Class M-7                    (1)              $                8,372,000.00          December 25, 2034
       Class M-8                    (1)              $                7,611,000.00          December 25, 2034
        Class B                     (1)              $                7,609,000.00          December 25, 2034
</TABLE>
---------------

(1)      Interest will accrue at a rate equal to the Pass-Through Rate, as
         defined herein.
(2)      The Class C Certificates will accrue interest at its variable
         Pass-Through Rate on the Notional Amount of the Class C Certificates
         outstanding from time to time which shall equal the Uncertificated
         Principal Balance of the REMIC I Regular Interests (other than REMIC I
         Regular Interest LT-P and REMIC I Regular Interest LT-R). The Class C
         Certificates will not accrue interest on its Certificate Principal
         Balance.
(3)      The Class P Certificates will not be entitled to distributions of
         interest.

                                       2
<PAGE>

<TABLE>
<CAPTION>
                                                      Aggregate Initial Certificate          Final Scheduled
      Designation            Pass-Through Rate              Principal Balance               Distribution Date
  --------------------    -----------------------     -----------------------------         -----------------
<S>                                 <C>               <C>                    <C>            <C>
        Class C                     (2)               $                      100.00          December 25, 2034
        Class P                     (3)               $                      100.00          December 25, 2034
</TABLE>

                                       3
<PAGE>

                                   ARTICLE I

                                   DEFINITIONS

         Section 1.01 DEFINED TERMS.

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

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

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

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

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

         ADVANCE: The aggregate of the advances required to be made by the
Master Servicer with respect to any Distribution Date pursuant to Section 4.01,
the amount of any such advances being equal to the sum of (A) the aggregate of
payments of principal and interest (net of the Servicing Fees) on the Mortgage
Loans that were due on the related Due Date and not received by the Master
Servicer as of the close of business on the related Determination Date and (B)
with respect to each REO Property that has not been liquidated, an amount equal
to the excess, if any, of (x) one month's interest (adjusted to the Net Mortgage
Rate) on the Stated Principal Balance of the related Mortgage Loan over (y) the
net monthly rental income (if any) from such REO Property deposited in the
Certificate Account for such Distribution Date pursuant to Section 3.12, less
the aggregate amount of any such delinquent payments that the Master Servicer
has determined would constitute a Nonrecoverable Advance were an advance to be
made with respect thereto.

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

                                       4
<PAGE>

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

         APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date,
the sum of the Realized Losses with respect to the Mortgage Loans which shall
equal the amount, if any, by which, Certificate Principal Balance of all
Certificates (after all distributions of principal on such Distribution Date)
exceeds the Stated Principal Balance of the Mortgage Loans for such Distribution
Date, and which are to be applied as provided in Section 4.04 of this Agreement.

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

         BANKRUPTCY CODE:  Title 11 of the United States Code.

         BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Class A Certificates and Subordinate Certificates
constitutes a Class of Book-Entry Certificates.

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

         CALENDAR QUARTER: A Calendar Quarter shall consist of one of the
following time periods in any given year: January 1 through March 31, April 1
through June 30, July 1 through September 30, and October 1 through December 31.

         CAP CONTRACT COUNTERPARTY: Bear Stearns Financial Products Inc., and
any permitted successors and assigns pursuant to the Class A-1 Cap Contract or
Corridor Contract.

         CAP CONTRACT TERMINATION DATE: either the Class A-1 Cap Contract
Termination Date or the Corridor Contract Termination Date, as required by the
context.

         CAP CONTRACT(S): The Class A-1 Cap Contract and the Corridor Contract,
or each individually.

         CARRYOVER RESERVE FUND: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of the
Trustee for the benefit of the

                                       5
<PAGE>

Certificateholders and designated "The Bank of New York in trust for registered
holders of CWABS, Inc., Asset-Backed Certificates, Series 2004-BC5". Funds in
the Carryover Reserve Fund shall be held in trust for the Certificateholders for
the uses and purposes set forth in this Agreement and shall not be a part of any
REMIC created under this Agreement.

         CERTIFICATE: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-9, Exhibit B, Exhibit C and Exhibit D.

         CERTIFICATE ACCOUNT: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans Servicing LP in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-BC5". Funds in the Certificate Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.

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

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

         CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other than the
Class C Certificates) and as of any Distribution Date, the Initial Certificate
Principal Balance of such Certificate LESS the sum of (i) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04, and (ii) in the case of any Subordinate Certificate, any Applied Realized
Loss Amounts allocated to such Certificate on previous Distribution Dates
pursuant to Section 4.04; provided that, the Certificate Principal Balance of
the Class of Subordinate Certificates with the highest payment priority to which
Realized Losses have been allocated shall be increased by the amount of any
Subsequent Recoveries on the Mortgage Loans not previously allocated, but not by
more than the amount of Realized Losses previously allocated to reduce the
Certificate Principal Balance of that Class. As to any Class C Certificate and
as of any Distribution Date, an amount equal to the excess, if any, of (i) the
aggregate Stated Principal Balance of the Mortgage Loans over (ii) the aggregate
Certificate Principal Balance of the Offered Certificates. References herein to
the Certificate Principal Balance of a Class of Certificates shall mean the
Certificate Principal Balances of all Certificates in such Class.

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

         CERTIFICATEHOLDER or HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Class of Regular Certificates, except that
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any affiliate of the
Depositor shall be deemed not to be Outstanding and the Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests

                                       6
<PAGE>

necessary to effect such consent has been obtained; provided that if any such
Person (including the Depositor) owns 100% of the Voting Interests evidenced by
a Class of Certificates, such Certificates shall be deemed to be Outstanding for
purposes of any provision hereof (other than the second sentence of Section
10.01 hereof) that requires the consent of the Holders of Certificates of a
particular Class as a condition to the taking of any action hereunder. The
Trustee is entitled to rely conclusively on a certification of the Depositor or
any affiliate of the Depositor in determining which Certificates are registered
in the name of an affiliate of the Depositor.

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

         CLASS A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
excess of (i) the aggregate Certificate Principal Balance of the Class A-1,
Class A-2 and Class A-3 Certificates immediately prior to such Distribution Date
plus any Class A-1 Turbo Trigger Event Reduction Amount over (ii) the lesser of
(x) 61.90% of the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor.

         CLASS A-1 CAP CONTRACT: The transaction evidenced by the Class A-1 Cap
Contract Confirmation and Agreement (as assigned to the Trustee pursuant to the
Class A-1 Cap Contract Assignment Agreement), a form of which is attached hereto
as Exhibit R.

         CLASS A-1 CAP CONTRACT ASSIGNMENT AGREEMENT: The Assignment Agreement
regarding the Class A-1 Cap Contract dated as of the Closing Date among the
Seller, the Trustee and the Cap Contract Counterparty, a form of which is
attached hereto as Exhibit S.

         CLASS A-1 CAP CONTRACT CONFIRMATION AND AGREEMENT: The Confirmation and
Agreement dated December 6, 2004, reference number FXNCC6541, evidencing the
Class A-1 Cap Contract.

         CLASS A-1 CAP CONTRACT PAYMENT AMOUNT: The amount, if any, received by
the Trustee for the benefit of the Trust Fund in respect of the Class A-1 Cap
Contract.

         CLASS A-1 CAP CONTRACT TERMINATION DATE: The Distribution Date in
October 2007.

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

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

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

                                       7
<PAGE>

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

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

         CLASS A-1 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.130% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.260% per
annum.

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

         CLASS A-1 TURBO TRIGGER EVENT REDUCTION AMOUNT: The cumulative amount
of funds applied to the Class A-1 Certificates in respect of the Class A-1 Turbo
Trigger Event Payment Amount pursuant to Section 4.04(e)(vi), minus all
distributions to the Class C Certificates made pursuant to the final paragraph
of Section 4.04(d)(ii).

         CLASS A-1 TURBO TRIGGER EVENT PAYMENT AMOUNT: With respect to any
Distribution Date on which a Class A-1 Turbo Trigger Event is in effect, the
lesser of (a) the amount of Excess Cashflow remaining after making the
distributions pursuant to Section 4.04(e)(i) through (v) and (b) the Certificate
Principal Balance of the Class A-1 Certificates (after giving effect to
principal distributions from the Principal Distribution Amount on the Class A-1
Certificates with respect to such Distribution Date).

         CLASS A-1 TURBO TRIGGER EVENT: With respect to any Distribution Date on
or after the Distribution Date in July 2008, until the Certificate Principal
Balance of the Class A-1 Certificates has been reduced to zero, if the
Certificate Principal Balance of the Class A-1 Certificates (after giving effect
to principal distributions from the Principal Distribution Amount on the Class
A-1 Certificates with respect to such Distribution Date) on that Distribution
Date exceeds the Class A-1 Turbo Trigger Balance for such Distribution Date
specified in the table below.

                              CLASS A-1 TURBO
 DISTRIBUTION DATE          TRIGGER BALANCE ($)
July 25, 2008                 243,905,637.47
August 25, 2008               240,047,977.74
September 25, 2008            236,181,939.26
October 25, 2008              232,254,790.97
November 25, 2008             228,371,825.77
December 25, 2008             224,428,239.78

                                       8
<PAGE>

January 25, 2009              220,528,269.94
February 25, 2009             216,619,616.91
March 25, 2009                212,548,200.24
April 25, 2009                208,621,982.23
May 25, 2009                  204,634,544.96
June 25, 2009                 200,681,365.95
July 25, 2009                 196,668,293.66
August 25, 2009               192,676,903.59
September 25, 2009            188,648,934.53
October 25, 2009              184,562,686.75
November 25, 2009             180,517,025.97
December 25, 2009             176,413,595.01
January 25, 2010              172,350,160.13
February 25, 2010             168,277,858.02
March 25, 2010                164,052,317.67
April 25, 2010                159,961,915.38
May 25, 2010                  155,815,028.22
June 25, 2010                 151,706,643.25
July 25, 2010                 147,542,289.48
August 25, 2010               143,415,837.80
September 25, 2010            139,280,369.91
October 25, 2010              135,089,709.90
November 25, 2010             130,936,048.56
December 25, 2010             126,727,716.59
January 25, 2011              122,555,776.57
February 25, 2011             118,374,712.41
March 25, 2011                114,050,282.69
April 25, 2011                109,850,623.57
May 25, 2011                  105,597,611.33
June 25, 2011                 101,379,457.69
July 25, 2011                 97,108,480.12
August 25, 2011               92,871,744.98
September 25, 2011            88,625,731.53
October 25, 2011              84,327,690.74
November 25, 2011             80,062,964.57
December 25, 2011             75,746,745.79
January 25, 2012              71,463,218.63
February 25, 2012             67,170,301.42
March 25, 2012                62,785,421.54
April 25, 2012                58,473,483.59
May 25, 2012                  54,111,401.03
June 25, 2012                 49,780,439.02
July 25, 2012                 45,399,875.03
August 25, 2012               41,049,798.86
September 25, 2012            36,690,173.23
October 25, 2012              32,281,762.59
November 25, 2012             27,902,886.85
December 25, 2012             23,475,774.44

                                       9
<PAGE>

January 25, 2013              19,077,557.18
February 25, 2013             14,669,674.69
March 25, 2013                10,138,936.10
April 25, 2013                5,711,415.84
May 25, 2013                  1,237,043.43
June 25, 2013                 0

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

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

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

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

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

         CLASS A-2 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.270% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.540% per
annum.

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

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

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

         CLASS A-3 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-3 Pass-Through Rate on
the Class A-3 Certificate Principal

                                       10
<PAGE>

Balance immediately prior to such Distribution Date, plus any amount previously
distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.

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

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

         CLASS A-3 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.430% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.860% per
annum.

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

         CLASS A-R CERTIFICATE: Any one of the Class A-R Certificates executed
by the Trustee substantially in the form annexed hereto as Exhibit D, composed
of the Class R-I Interest and Class R-II Interest.

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

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

         CLASS B CERTIFICATE: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.

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

         CLASS B CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class B Pass-Through Rate on
the Class B Certificate Principal Balance immediately prior to such Distribution
Date.

                                       11
<PAGE>

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

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

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

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

         CLASS B PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date the excess of (i) the sum of: (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after taking into account distribution of
the Class A Principal Distribution Amount on such Distribution Date) plus any
Class A-1 Turbo Trigger Event Reduction Amount, (B) the Class M-1 Certificate
Principal Balance (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distribution
of the Class M-3 Principal Distribution Amount on such Distribution Date), (E)
the Class M-4 Certificate Principal Balance (after taking into account
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date), (F) the Class M-5 Certificate Principal Balance (after taking into
account distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date), (G) the Class M-6 Certificate Principal Balance (after
taking into account distribution of the Class M-6 Principal Distribution Amount
on such Distribution Date), (H) the Class M-7 Certificate Principal Balance
(after taking into account distribution of the Class M-7 Principal Distribution
Amount on such Distribution Date), (I) the Class M-8 Certificate Principal
Balance (after taking into account distribution of the Class M-8 Principal
Distribution Amount on such Distribution Date), and (J) the Class B Certificate
Principal Balance immediately prior to such Distribution Date over (ii) the
lesser of (x) 94.80% of the aggregate Stated Principal Balances of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date minus the OC Floor; provided, however, that
after the Certificate Principal Balance of each other Class of Offered
Certificates is reduced to zero, the Class B Principal Distribution Amount for
such Distribution Date will equal 100% of the Principal Distribution Amount for
such Distribution Date.

                                       12
<PAGE>

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

         CLASS C CURRENT INTEREST: For any Distribution Date, the interest
accrued on the Class C Notional Amount during the related Accrual Period at the
Class C Pass-Through Rate.

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

         CLASS C PASS-THROUGH RATE: A rate per annum equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (A) through (N) below, and the denominator of
which is the Uncertificated Principal Balance of the REMIC I Regular Interests
(other than REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R).
For purposes of calculating the Pass-Through Rate for the Class C Certificates,
the numerator is equal to the sum of the following components:

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

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

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

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

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

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

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

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

                                       13
<PAGE>

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

     (J) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT-M6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M6;

     (K) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT-M7 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M7;

     (L) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT-M8 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M8;

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

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

         CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.

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

         CLASS M-1 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance immediately prior to such
Distribution Date.

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

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

                                       14
<PAGE>

         CLASS M-1 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.520% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.780% per
annum.

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

         CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date) plus any Class A-1 Turbo Trigger Event Reduction Amount and (B) the Class
M-1 Certificate Principal Balance immediately prior to such Distribution Date
over (ii) the lesser of (x) 68.80% of the Stated Principal Balances of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date minus the OC Floor; provided,
however, that after the Certificate Principal Balance of each other Class of
Offered Certificates is reduced to zero, the Class M-1 Principal Distribution
Amount for such Distribution Date will equal 100% of the Principal Distribution
Amount for such Distribution Date.

         CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.

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

         CLASS M-2 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance immediately prior to such
Distribution Date.

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

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

                                       15
<PAGE>

         CLASS M-2 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.560% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.840% per
annum.

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

         CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date) plus any Class A-1 Turbo Trigger Event Reduction Amount, (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-2 Certificate Principal Balance immediately prior to such Distribution
Date over (ii) the lesser of (x) 75.20% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Certificate Principal Balance of each other
Class of Offered Certificates is reduced to zero, the Class M-2 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.

         CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.

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

         CLASS M-3 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date.

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

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

                                       16
<PAGE>

         CLASS M-3 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.600% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 0.900% per
annum.

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

         CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date) plus any Class A-1 Turbo Trigger Event Reduction Amount, (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date) and
(D) the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (x) 78.80% of the aggregate Stated
Principal Balances of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided, however, that after the Certificate Principal
Balance of each other Class of Offered Certificates is reduced to zero, the
Class M-3 Principal Distribution Amount for such Distribution Date will equal
100% of the Principal Distribution Amount for such Distribution Date.

         CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.

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

         CLASS M-4 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance immediately prior to such
Distribution Date.

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

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

                                       17
<PAGE>

         CLASS M-4 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 0.930% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.395% per
annum.

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

         CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date) plus any Class A-1 Turbo Trigger Event Reduction Amount, (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), and (E) the Class M-4 Certificate Principal Balance immediately prior to
such Distribution Date over (ii) the lesser of (x) 82.10% of the aggregate
Stated Principal Balances of the Mortgage Loans for such Distribution Date after
giving effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided, however, that after the Certificate Principal
Balance of each other Class of Offered Certificates is reduced to zero, the
Class M-4 Principal Distribution Amount for such Distribution Date will equal
100% of the Principal Distribution Amount for such Distribution Date.

         CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.

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

         CLASS M-5 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance immediately prior to such
Distribution Date.

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

         CLASS M-5 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-5 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-1 Certificates would otherwise have accrued for such Distribution
Date had the Class M-5 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-5 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-5 Certificates

                                       18
<PAGE>

at the Net Rate Cap for such Distribution Date and (B) the Class M-1 Interest
Carryover Amount for all previous Distribution Dates not previously paid
pursuant to Section 4.04, together with interest thereon at the Class M-5
Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS M-5 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.000% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.500% per
annum.

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

         CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date) plus any Class A-1 Turbo Trigger Event Reduction Amount, (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), and (F) the Class M-5 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 85.60%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-5 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

         CLASS M-6 CERTIFICATE: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.

         CLASS M-6 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-6 Certificates.

         CLASS M-6 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance immediately prior to such
Distribution Date.

         CLASS M-6 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-6 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-6 Certificates
with respect to interest on such prior Distribution Dates.

         CLASS M-6 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-6 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-6 Certificates

                                       19
<PAGE>

would otherwise have accrued for such Distribution Date had the Class M-6
Pass-Through Rate thereon been calculated as the sum of One-Month LIBOR and the
applicable Class M-6 Margin for such Distribution Date, over (ii) the amount of
interest accrued on the Class M-6 Certificates at the Net Rate Cap for such
Distribution Date and (B) the Class M-6 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class M-6 Pass-Through Rate (without
giving effect to the Net Rate Cap).

         CLASS M-6 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.100% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 1.650% per
annum.

         CLASS M-6 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-6 Margin and (ii) the related Net Rate Cap
for such Distribution Date.

         CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date) plus any Class A-1 Turbo Trigger Event Reduction Amount, (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date) and (G) the Class M-6 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 88.60%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-6 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

         CLASS M-7 CERTIFICATE: Any Certificate designated as a "Class M-7
Certificate" on the face thereof, in the form of Exhibit A-10 hereto,
representing the right to distributions as set forth herein.

         CLASS M-7 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-7 Certificates.

         CLASS M-7 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-7 Pass-Through Rate on
the Class M-7 Certificate Principal Balance immediately prior to such
Distribution Date.

         CLASS M-7 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-7 Current Interest with respect to prior Distribution
Dates over (b) the amount

                                       20
<PAGE>

actually distributed to the Class M-7 Certificates with respect to interest on
such prior Distribution Dates.

         CLASS M-7 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-7 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-7 Certificates would otherwise have accrued for such Distribution
Date had the Class M-7 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-7 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-7 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-7 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-7 Pass-Through Rate
(without giving effect to the Net Rate Cap).

         CLASS M-7 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.600% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 2.400% per
annum.

         CLASS M-7 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-7 Margin and (ii) the related Net Rate Cap
for such Distribution Date.

         CLASS M-7 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date) plus any Class A-1 Turbo Trigger Event Reduction Amount, (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date) (G) the Class M-6 Certificate Principal Balance
(after taking into account distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date) and (H) the Class M-7 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (x)
90.80% of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-7 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

         CLASS M-8 CERTIFICATE: Any Certificate designated as a "Class M-8
Certificate" on the face thereof, in the form of Exhibit A-11 hereto,
representing the right to distributions as set forth herein.

                                       21
<PAGE>

         CLASS M-8 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-8 Certificates.

         CLASS M-8 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-8 Pass-Through Rate on
the Class M-8 Certificate Principal Balance immediately prior to such
Distribution Date.

         CLASS M-8 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date, the
excess of (a) the Class M-8 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-8 Certificates
with respect to interest on such prior Distribution Dates.

         CLASS M-8 INTEREST CARRYOVER AMOUNT: For any Distribution Date and the
Class M-8 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-8 Certificates would otherwise have accrued for such Distribution
Date had the Class M-8 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-8 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-8 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-8 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-8 Pass-Through Rate
(without giving effect to the Net Rate Cap).

         CLASS M-8 MARGIN: For the Accrual Period for any Distribution Date on
or prior to the Optional Termination Date, 1.750% per annum and, for the Accrual
Period for any Distribution Date after the Optional Termination Date, 2.625% per
annum.

         CLASS M-8 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-8 Margin and (ii) the related Net Rate Cap
for such Distribution Date.

         CLASS M-8 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date) plus any Class A-1 Turbo Trigger Event Reduction Amount, (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class M-4 Certificate Principal Balance (after taking into
account distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date) (G) the Class M-6 Certificate Principal Balance
(after taking into account distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the Class M-7 Certificate Principal
Balance (after taking into account distribution of the Class M-7 Principal
Distribution Amount on such Distribution Date) and (H) the Class M-8 Certificate
Principal Balance immediately prior to such Distribution Date over (ii) the
lesser of (x) 92.80% of the aggregate Stated Principal Balances of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after

                                       22
<PAGE>

giving effect to distributions to be made on that Distribution Date minus the OC
Floor; provided, however, that after the Certificate Principal Balance of each
other Class of Offered Certificates is reduced to zero, the Class M-8 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.

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

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

         CLASS P DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Class P Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-BC5".

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

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

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

         CLOSING DATE: December 27, 2004.

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

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

         CORPORATE TRUST OFFICE: The designated office of the Trustee in the
State of New York where at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 101 Barclay Street, New York, New York
10286 (Attention: Corporate Trust MBS Administration), telephone: (212)
815-3236, facsimile: (212) 815-3986.

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

          REMIC I REGULAR INTEREST           REMIC II CERTIFICATE
                   LT-A1                    Class A-1 Certificate
                   LT-A2                    Class A-2 Certificate
                   LT-A3                    Class A-3 Certificate
                   LT-M1                    Class M-1 Certificate
                   LT-M2                    Class M-2 Certificate

                                       23
<PAGE>

          REMIC I REGULAR INTEREST           REMIC II CERTIFICATE
                   LT-M3                    Class M-3 Certificate
                   LT-M4                    Class M-4 Certificate
                   LT-M5                    Class M-5 Certificate
                   LT-M6                    Class M-6 Certificate
                   LT-M7                    Class M-7 Certificate
                   LT-M8                    Class M-8 Certificate
                    LT-B                     Class B Certificate
                    LT-P                     Class P Certificate
                    LT-R                    Class A-R Certificate

         CORRIDOR CONTRACT: The transaction evidenced by the Corridor Contract
Confirmation And Agreement (as assigned to the Trustee pursuant to the Class A-1
Cap Contract Assignment Agreement), a form of which is attached hereto as
Exhibit R.

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

         CORRIDOR CONTRACT CONFIRMATION AND AGREEMENT: The Confirmation and
Agreement dated December 6, 2004, 2004, reference number FXNEC6542, evidencing
the Corridor Contract.

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

         CORRIDOR CONTRACT TERMINATION DATE: The Distribution Date in February
2012.

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

<TABLE>
<CAPTION>
     DISTRIBUTION DATE                                                  PERCENTAGE
     -----------------                                                  ----------
<S>                                           <C>
     January 2008 -- December 2008........... 2.50% with respect to January 2008, plus an additional  1/12th of
                                              1.50% for each month thereafter until December 2008
     January 2009 -- December 2009........... 4.00% with respect to January 2009, plus an additional  1/12th of
                                              1.00% for each month thereafter until December 2009
     January 2010 -- December 2010........... 5.00% with respect to January 2010, plus an additional  1/12th of
                                              0.75% for each month thereafter until December 2010
     January 2011 -- and thereafter.......... 5.75%
</TABLE>

                                       24
<PAGE>

         CURRENT INTEREST: With respect to (i) the Class A-1 Certificates, the
Class A-1 Current Interest, (ii) the Class A-2 Certificates, the Class A-2
Current Interest, (iii) the Class A-3 Certificates, the Class A-3 Current
Interest,(iv) the Class M-1 Certificates, the Class M-1 Current Interest, (v)
the Class M-2 Certificates, the Class M-2 Current Interest, (vi) the Class M-3
Certificates, the Class M-3 Current Interest, (vii) the Class M-4 Certificates,
the Class M-4 Current Interest, (viii) the Class M-5 Certificates, the Class M-5
Current Interest, (ix) the Class M-6 Certificates, the Class M-6 Current
Interest, (x) the Class M-7 Certificates, the Class M-7 Current Interest, (xi)
the Class M-8 Certificates, the Class M-8 Current Interest (xii) the Class B
Certificates, the Class B Current Interest and (x) the Class C Certificates, the
Class C Current Interest.

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

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

         DBRS: Dominion Bond Rating Service, Inc., or any successor thereto.

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

         DEFINITIVE CERTIFICATES:  As defined in Section 5.06.

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

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

                                       25
<PAGE>

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

         DELINQUENCY TRIGGER EVENT: With respect to each Distribution Date on or
after the Stepdown Date, a Delinquency Trigger Event exists if the Rolling
Delinquency Percentage equals or exceeds 40.00% of the Senior Enhancement
Percentage.

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

         DENOMINATION: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.

         DEPOSITOR: CWABS, Inc., a Delaware corporation, or its successor in
interest.

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

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

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

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

         DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Bank of New York,
in trust for registered holders of CWABS, Inc., Asset-Backed Certificates,
Series 2004-BC5". Funds in the Distribution Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement.

                                       26
<PAGE>

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

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

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

         DUE PERIOD: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.

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

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

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

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

         EVENT OF DEFAULT:  As defined in Section 7.01 hereof.

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

                                       27
<PAGE>

         EXCESS OVERCOLLATERALIZATION AMOUNT: for any Distribution Date, the
excess, if any, of the related Overcollateralized Amount on that Distribution
Date over the related Overcollateralization Target Amount.

         EXCESS PROCEEDS: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (i) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (ii) interest at
the Mortgage Rate from the Due Date as to which interest was last paid or
advanced to Certificateholders (and not reimbursed to the Master Servicer) up to
the Due Date in the month in which such Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Loan outstanding
during each Due Period as to which such interest was not paid or advanced.

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

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

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

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

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

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

         FIVE-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a Mortgage Rate
that is fixed for 60 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.

         FIXED RATE MORTGAGE LOAN: A Mortgage Loan having a Mortgage Rate which
is fixed for the life of the related Mortgage, including any Mortgage Loans
delivered in replacement thereof.

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

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

         INDEX: As to any Adjustable Rate Mortgage Loan on any Adjustment Date
related thereto, the index for the adjustment of the Mortgage Rate set forth as
such in the related Mortgage Note, such index in general being the average of
the London interbank offered rates for six-month U.S. dollar deposits in the
London market, as set forth in THE WALL STREET JOURNAL or some other source
generally accepted in the residential mortgage loan origination business and

                                       28
<PAGE>

specified in the related Mortgage Note, as most recently announced as of either
45 days prior to, or the first business day of the month immediately preceding
the month of, such Adjustment Date or, if the Index ceases to be published in
the original source or becomes unavailable for any reason, then the Index shall
be a new index selected by the Master Servicer, based on comparable information.

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

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

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

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

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

         INTEREST CARRY FORWARD AMOUNT: With respect to (i) the Class A-1
Certificates, the Class A-1 Interest Carry Forward Amount, (ii) the Class A-2
Certificates, the Class A-2 Interest Carry Forward Amount, (iii) the Class A-3
Certificates, the Class A-3 Interest Carry Forward Amount, (iv) the Class M-1
Certificates, the Class M-1 Interest Carry Forward Amount, (v) the Class M-2
Certificates, the Class M-2 Interest Carry Forward Amount, (vi) the Class M-3
Certificates, the Class M-3 Interest Carry Forward Amount, (vii) the Class M-4
Certificates, the Class M-4 Interest Carry Forward Amount, (viii) the Class M-5
Certificates, the Class M-5 Interest Carry Forward Amount, (ix) the Class M-6
Certificates, the Class M-6 Interest Carry Forward Amount, (x) the Class M-7
Certificates, the Class M-7 Interest Carry Forward Amount, (xi) the Class M-8
Certificates, the Class M-8 Interest Carry Forward Amount and (xii) the Class B
Certificates, the Class B Interest Carry Forward Amount.

         INTEREST DETERMINATION DATE: With respect to the Certificates (other
than the Class A-R, Class C and Class P Certificates) for the first Accrual
Period, December 27, 2004. With respect to the Certificates (other than the
Class A-R, Class C and Class P Certificates) and any Accrual Period thereafter,
the second LIBOR Business Day preceding the commencement of such Accrual Period.

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

         INTEREST REMITTANCE AMOUNT: With respect to the Mortgage Loans and any
Master Servicer Advance Date, the sum, without duplication, of (i) all scheduled
interest collected

                                       29
<PAGE>

during the related Due Period with respect to the Mortgage Loans less the
related Servicing Fee, (ii) interest payments on any Principal Prepayments
received during the related Prepayment Period other than Prepayment Interest
Excess, (iii) all related Advances relating to interest with respect to the
Mortgage Loans, (iv) all Compensating Interest with respect to the Mortgage
Loans, (v) Liquidation Proceeds and Subsequent Recoveries with respect to the
Mortgage Loans collected during the related Due Period (to the extent such
Liquidation Proceeds and Subsequent Recoveries relate to interest), and (vi) for
the Master Servicer Advance Date in January 2005, the Seller Shortfall Interest
Requirement for such Master Servicer Advance Date (if any), less all
Nonrecoverable Advances relating to interest reimbursed during the related Due
Period.

         LATEST POSSIBLE MATURITY DATE:  The 360th Distribution Date.

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

         LIQUIDATED LOAN: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Master Servicer has certified (in accordance with
Section 3.12) in the related Prepayment Period that it has received all amounts
it expects to receive in connection with such liquidation.

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

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

         MARKER RATE: With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) multiplied by the weighted
average of the Uncertificated REMIC I Pass Through Rates for each REMIC I
Regular Interest (other than REMIC I Regular Interest LT-AA, REMIC I Regular
Interest LT-P and REMIC I Regular Interest LT-R), with the rates on each such
REMIC I Regular Interest subject to a cap equal to the Pass Through Rate for the
Corresponding Class for such REMIC I Regular Interest, and the rate on REMIC I
Regular Interest LT-ZZ subject to a cap of zero for purposes of this
calculation; provided, however, that solely for this purpose, calculations of
the Uncertificated REMIC I Pass-Through Rate and the related caps with respect
to each such REMIC I Regular Interest (other than REMIC I Regular Interest
LT-ZZ) shall be multiplied by a fraction, the numerator of which is the actual
number of days in the Interest Accrual Period and the denominator of which is
30.

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

                                       30
<PAGE>

         MASTER SERVICER ADVANCE DATE: As to any Distribution Date, the Business
Day immediately preceding such Distribution Date.

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

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

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

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

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

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

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

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

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

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

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

         MORTGAGE LOAN: Such of the Mortgage Loans transferred and assigned to
the Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Any Mortgage Loan
subject to repurchase by the Seller or Master Servicer as provided in this
Agreement, shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.

         MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the deletion of Deleted Mortgage
Loans and the addition of Replacement Mortgage Loans pursuant to the provisions
of this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached hereto as Exhibit F-1, setting
forth the following information with respect to each Mortgage Loan:

                                       31
<PAGE>

         (i) the loan number;

         (ii) the Appraised Value;

         (iii) the Initial Mortgage Rate;

         (iv) the maturity date;

         (v) the original principal balance;

         (vi) the Cut-off Date Principal Balance;

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

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

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

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

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

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

                  (a) the frequency of each Adjustment Date;

                  (b) the next Adjustment Date;

                  (c) the Maximum Mortgage Rate;

                  (d) the Minimum Mortgage Rate;

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

                  (f) the related Periodic Rate Cap;

                  (g) the Gross Margin; and

                  (h) the purpose of the Mortgage Loan.

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

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

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

                                       32
<PAGE>

         MORTGAGED PROPERTY:  The underlying property securing a Mortgage Loan.

         MORTGAGOR:  The obligors on a Mortgage Note.

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

         NET RATE CAP: For any Accrual Period, a per annum rate equal to (i) the
weighted average Adjusted Net Mortgage Rate of the Mortgage Loans adjusted to an
effective rate reflecting the calculation of interest on the basis of the actual
number of days elapsed during the related interest Accrual Period and a 360-day
year. For federal income tax purposes, however, the equivalent of the foregoing
is expressed as a per annum rate equal to the weighted average of the
Uncertificated REMIC I Pass-Through Rates on the REMIC I Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest.

         NET RATE CARRYOVER: With respect to any Distribution Date, an amount
equal to the sum of (i) the Class A-1 Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class A-2 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class A-3 Interest Carryover Amount
for such Distribution Date (if any) (iv) the Class M-1 Interest Carryover Amount
for such Distribution Date (if any), (v) the Class M-2 Interest Carryover Amount
for such Distribution Date (if any), (vi) the Class M-3 Interest Carryover
Amount for such Distribution Date (if any), (vii) the Class M-4 Interest
Carryover Amount for such Distribution Date (if any), (viii) the Class M-5
Interest Carryover Amount for such Distribution Date (if any), (ix) the Class
M-6 Interest Carryover Amount for such Distribution Date (if any), (x) the Class
M-7 Interest Carryover Amount for such Distribution Date (if any), (xi) the
Class M-8 Interest Carryover Amount for such Distribution Date (if any) and (xi)
the Class B Interest Carryover Amount for such Distribution Date (if any);
provided that when the term Net Rate Carryover is used with respect to one Class
of Certificates (other than the Class A-R, Class C and Class P Certificates), it
shall mean such carryover amount listed in clauses (i), (ii), (iii) (iv), (v),
(vi), (vii), (viii), (ix), (x) or (xi) as applicable, with the same Class
designation. The Class A-R, Class C and Class P Certificates shall not accrue
any Net Rate Carryover.

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

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

         OC FLOOR: For any Distribution Date, 0.50% of the Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.

         OFFERED CERTIFICATES: The Class A-1, Class A-2, Class A-3, Class A-R,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class B Certificates.

         OFFICER'S CERTIFICATE: A certificate (i) in the case of the Depositor,
signed by the Chairman of the Board, the Vice Chairman of the Board, the
President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary,

                                       33
<PAGE>

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

         ONE-MONTH LIBOR: With respect to any Accrual Period for the Offered
Certificates (other than the Class A-R and Class C Certificates), the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR calculated for the first Accrual Period shall equal 2.4168% per annum. If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Trustee), One-Month LIBOR for the applicable Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the Trustee
and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period for such Certificates.

         ONE-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a Mortgage Rate
that is fixed for 12 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.

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

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

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

         ORIGINAL MORTGAGE LOAN: The mortgage loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.

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

         OTS:  The Office of Thrift Supervision.

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<PAGE>

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

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

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

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

         OVERCOLLATERALIZED AMOUNT: For any Distribution Date, the amount, if
any, by which (x) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period exceeds (y) the aggregate
Certificate Principal Balance of the Offered Certificates as of such
Distribution Date plus any Class A-1 Turbo Trigger Event Reduction Amount (after
giving effect to distributions in respect of the Principal Remittance Amount on
such Distribution Date).

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

         OVERCOLLATERALIZATION REDUCTION AMOUNT: for any Distribution Date for
which the Excess Overcollateralization Amount is, or would be, after taking into
account all other distributions to be made on that Distribution Date, greater
than zero, an amount equal to the lesser of (i) the Excess Overcollateralization
Amount for that Distribution Date and (ii) the Principal Remittance Amount for
that Distribution Date.

         OVERCOLLATERALIZATION TARGET AMOUNT: (a) On each Distribution Date
prior to the Stepdown Date, 2.60% of the Cut-off Date Pool Stated Principal
Balance, and (b) on and after the Stepdown Date, an amount equal to 5.20% of the
aggregate Stated Principal Balance of the Mortgage Loans in the Mortgage Pool
for the current Distribution Date, subject to a minimum amount equal to the OC
Floor; provided, however, that if on any Distribution Date, a Trigger Event is
in effect, the Overcollateralization Target Amount will be the
Overcollateralization Target Amount on the Distribution Date immediately
preceding such Distribution Date.

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

         PASS-THROUGH RATE: With respect to the Class A-1 Certificates, the
Class A-1 Pass-Through Rate; with respect to the Class A-2 Certificates, the
Class A-2 Pass-Through Rate; with respect to the Class A-3 Certificates, the
Class A-3 Pass-Through Rate; with respect to the Class M-1 Certificates, the
Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate; with respect to the Class M-3 Certificates,

                                       35
<PAGE>

the Class M-3 Pass-Through Rate; with respect to the Class M-4 Certificates, the
Class M-4 Pass-Through Rate; with respect to the Class M-5 Certificates, the
Class M-5 Pass-Through Rate; with respect to the Class M-6 Certificates, the
Class M-6 Pass-Through Rate; with respect to the Class M-7 Certificates, the
Class M-7 Pass-Through Rate; with respect to the Class M-8 Certificates, the
Class M-8 Pass-Through Rate; with respect to the Class B Certificates, the Class
B Pass-Through Rate and with respect to the Class C Certificates, the Class C
Pass-Through Rate.

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

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

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

                  (i) obligations of the United States or any agency thereof,
         provided such obligations are backed by the full faith and credit of
         the United States;

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

                  (iii) [Reserved];

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

                  (v) certificates of deposit, demand or time deposits, or
         bankers' acceptances issued by any depository institution or trust
         company incorporated under the laws of the United States or of any
         state thereof and subject to supervision and examination by federal
         and/or state banking authorities, provided that the commercial paper
         and/or long term unsecured debt obligations of such depository
         institution or trust company (or in the case of the principal
         depository institution in a holding company system, the commercial
         paper or long-term unsecured debt obligations of such holding company)
         are then rated one of the two highest long-term and the highest
         short-term ratings of each such Rating Agency for such securities, or
         such lower ratings as each Rating Agency has confirmed in writing will
         not result in the downgrading or withdrawal of the rating then assigned
         to the Certificates by such Rating Agency;

                                       36
<PAGE>

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

                  (vii) securities (other than stripped bonds, stripped coupons
         or instruments sold at a purchase price in excess of 115% of the face
         amount thereof) bearing interest or sold at a discount issued by any
         corporation incorporated under the laws of the United States or any
         state thereof which, at the time of such investment, have one of the
         two highest long term ratings of each Rating Agency (except if the
         Rating Agency is Moody's, such rating shall be the highest commercial
         paper rating of S&P for any such securities) or such lower rating as
         each Rating Agency has confirmed in writing will not result in the
         downgrading or withdrawal of the rating then assigned to the
         Certificates by such Rating Agency;

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

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

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

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

                                       37
<PAGE>

REMIC. Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.

         PERMITTED TRANSFEREE: Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause any REMIC to fail to qualify as a REMIC at
any time that any Certificates are Outstanding. The terms "United States,"
"State" and "International Organization" shall have the meanings set forth in
section 7701 of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject to
tax and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such government unit.

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

         POOL STATED PRINCIPAL BALANCE: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans as of the first day of the related Due Period (after
giving effect to Principal Prepayments in the Prepayment Period including during
such Due Period).

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

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

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<PAGE>

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

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

                  (i) the Mortgage Loan account number;

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

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

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

                  (v) the term of the Prepayment Charge;

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

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

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

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

         PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment or
a Principal Prepayment in full or that became a Liquidated Loan during the
portion of the Prepayment Period from the beginning of such Prepayment Period to
the related Due Date in such Prepayment Period (in each case, other than a
Principal Prepayment in full resulting from the purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof), the amount, if any,
by which (i) one month's interest at the applicable Net Mortgage Rate on the
Stated Principal Balance of such Mortgage Loan immediately prior to such
prepayment (or liquidation) or in the case of a partial Principal Prepayment on
the amount of such prepayment (or liquidation proceeds) exceeds (ii) the amount
of interest paid or collected in connection with such Principal Prepayment or
such liquidation proceeds.

         PREPAYMENT PERIOD: As to any Distribution Date and Due Date, the period
beginning with the opening of business on the sixteenth day of the calendar
month preceding the month in which such Distribution Date occurs (or, with
respect to the first Distribution Date, the period from December 1, 2004) and
ending on the close of business on the fifteenth day of the month in which such
Distribution Date occurs.

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<PAGE>

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

         PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date,
the sum of (i) the Principal Remittance Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount for such Distribution Date minus
(iii) the amount of any Overcollateralization Reduction Amount for that
Distribution Date.

         PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01 hereof)
that is received in advance of its scheduled Due Date and is not accompanied by
an amount as to interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.

         PRINCIPAL REMITTANCE AMOUNT: The sum, without duplication, of: (i) the
scheduled principal due during the related Due Period and collected on or before
the related Determination Date or advanced on or before the related Master
Servicer Advance Date, (ii) Principal Prepayments collected in the related
Prepayment Period, (iii) the Stated Principal Balance of each Mortgage Loan that
was repurchased by the Seller or purchased by the Master Servicer, (iv) the
amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loans is less than the aggregate unpaid principal balance
of any Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan and (v) all Liquidation Proceeds and Subsequent
Recoveries collected during the related Due Period (to the extent such
Liquidation Proceeds and Subsequent Recoveries related to principal); less all
non-recoverable Advances relating to principal and certain expenses reimbursed
during the related Due Period.

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

         PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated December 21,
2004, relating to the public offering of the Offered Certificates offered
thereby.

         PUD:  A Planned Unit Development.

         PURCHASE PRICE: With respect to any Mortgage Loan (x) required to be
(1) repurchased by the Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased by
the Depositor pursuant to Section 2.04 hereof, or (y) that the Master Servicer
has a right to purchase pursuant to Section 3.12 hereof, an amount equal to the
sum of (i) 100% of the unpaid principal balance (or, if such purchase or
repurchase, as the case may be, is effected by the Master Servicer, the Stated
Principal Balance) of the Mortgage Loan as of the date of such purchase, (ii)
accrued interest thereon at the applicable Mortgage Rate (or, if such purchase
or repurchase, as the case may be, is effected by the Master Servicer, at the
Net Mortgage Rate) from (a) the date through which interest was last paid by the
Mortgagor (or, if such purchase or repurchase, as the case may be, is effected
by the Master Servicer, the date through which interest was last advanced and
not reimbursed by the Master Servicer) to (b) the

                                       40
<PAGE>

Due Date in the month in which the Purchase Price is to be distributed to
Certificateholders, and (iii) costs and damages incurred by the Trust Fund in
connection with a repurchase pursuant to Section 2.03 hereof that arises out of
a violation of any predatory or abusive lending law which also constitutes an
actual breach of representation (xxxiv) of Section 2.03(b) hereof.

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

         REALIZED LOSS: With respect to each Liquidated Loan, an amount (not
less than zero or more than the Stated Principal Balance of the Mortgage Loan)
as of the date of such liquidation, equal to (i) the Stated Principal Balance of
such Liquidated Loan as of the date of such liquidation, minus (ii) the
Liquidation Proceeds, if any, received in connection with such liquidation
during the month in which such liquidation occurs, to the extent applied as
recoveries of principal of the Liquidated Loan. With respect to each Mortgage
Loan that has become the subject of a Deficient Valuation, (i) if the value of
the related Mortgaged Property was reduced below the principal balance of the
related Mortgage Note, the amount by which the value of the Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, and (ii)
if the principal amount due under the related Mortgage Note has been reduced,
the difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation plus any reduction in the
interest component of the Scheduled Payments. With respect to each Mortgage Loan
that has become the subject of a Debt Service Reduction and any Distribution
Date, the amount, if any, by which the related Scheduled Payment was reduced.
The amount of a Realized Loss on a Liquidated Loan will be reduced by the amount
of Subsequent Recoveries received with respect to such Liquidated Mortgage Loan.

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

         REFERENCE BANK RATE: With respect to any Accrual Period for the Offered
Certificates (other than the Class A-R, Class P and Class C Certificates), the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Offered Certificates on such Interest
Determination Date, provided that at least two such Reference Banks provide such
rate. If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean (rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%) of the rates quoted by one or more major banks in New York
City, selected by the Trustee, as of 11:00 a.m., New York City time, on such
date for loans in U.S. dollars to leading European banks for a period of one
month in amounts

                                       41
<PAGE>

approximately equal to the aggregate Certificate Principal Balance of the
Offered Certificates on such Interest Determination Date.

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

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

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

         RELIEF ACT: The Servicemembers Civil Relief Act.

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

         REMIC I: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of:
(i) the Mortgage Loans and the related Mortgage Files; (ii) all payments on and
collections in respect of the Mortgage Loans due after the Cut-off Date (other
than Monthly Payments due in March 2004 and reflected in the Cut-off Date
Principal Balance) as shall be on deposit in the Certificate Account and
identified as belonging to the Trust Fund; (iii) property which secured a
Mortgage Loan and which has been acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of foreclosure; (iv) Required
Insurance Policies pertaining to the Mortgage Loans, if any; and (v) all
proceeds of clauses (i) through (iv) above. The Class A-1 Cap Contract, the
Corridor Contract and Carryover Reserve Fund will not be assets of REMIC I.

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

         REMIC I OVERCOLLATERALIZED AMOUNT: With respect to any date of
determination, (i) 1.00% of the aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests minus (ii) the Uncertificated Principal Balances
of REMIC I Regular Interest LT-A1, REMIC I Regular Interest LT-A2, REMIC I
Regular Interest LT-A3, REMIC I Regular Interest LT-M1, REMIC I Regular Interest
LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I
Regular Interest LT-M5, REMIC I Regular Interest LT-M6, REMIC I Regular Interest
LT-M7, REMIC I Regular Interest LT-M8, REMIC I Regular Interest LT-B, REMIC I
Regular Interest LT-ZZ and REMIC I Regular Interest LT-P, in each case as of
such date of determination.

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

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<PAGE>

         REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the sum of the Uncertificated
Principal Balances of REMIC I Regular Interest LT-A1, REMIC I Regular Interest
LT-A2, REMIC I Regular Interest LT-A3, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest
LT-M4, REMIC I Regular Interest LT-M5, REMIC I Regular Interest LT-M6, REMIC I
Regular Interest LT-M7, REMIC I Regular Interest LT-M8 and REMIC I Regular
Interest LT-B and the denominator of which is the sum of the Uncertificated
Principal Balances of REMIC I Regular Interest LT-A1, REMIC I Regular Interest
LT-A2, REMIC I Regular Interest LT-A3, REMIC I Regular Interest LT-M1, REMIC I
Regular Interest LT-M2, REMIC I Regular Interest LT-M3, REMIC I Regular Interest
LT-M4, REMIC I Regular Interest LT-M5, REMIC I Regular Interest LT-M6, REMIC I
Regular Interest LT-M7, REMIC I Regular Interest LT-M8, REMIC I Regular Interest
LT-B and REMIC I Regular Interest LT-ZZ.

         REMIC I REGULAR INTERESTS: REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT-A1, REMIC I Regular Interest LT-A2, REMIC I Regular Interest
LT-A3, REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I
Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular Interest
LT-M5, REMIC I Regular Interest LT-M6, REMIC I Regular Interest LT-M7, REMIC I
Regular Interest LT-M8, REMIC I Regular Interest LT-B, REMIC I Regular Interest
LT-ZZ, REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R.

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

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

         REMIC I REGULAR INTEREST LT-A2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-A3: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

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

                                       43
<PAGE>

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

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

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

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

         REMIC I REGULAR INTEREST LT-M6: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-M7: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC I REGULAR INTEREST LT-M8: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

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

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

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

                                       44
<PAGE>

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

         REMIC II REGULAR CERTIFICATES: Any of the Class A-1, Class A-2, Class
A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class B, Class C or Class P Certificates.

         REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
temporary and final regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.

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

         REPLACEMENT MORTGAGE LOAN: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit N, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and with respect to any Adjustable Rate Mortgage Loan: (a) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (c) have the same Index, Periodic Rate Cap and intervals
between Adjustment Dates as that of the Deleted Mortgage Loan and a Gross Margin
not more than 1% per annum higher or lower than that of the Deleted Mortgage
Loan; and (d) not permit conversion of the related Mortgage Rate to a fixed
Mortgage Rate; (iii) have the same or higher credit quality characteristics than
that of the Deleted Mortgage Loan; (iv) at the time of transfer to the Trust
Fund, be accruing interest at a Mortgage Rate not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (vi) have a remaining term to
maturity no greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vii) not permit conversion of the Mortgage Rate from a
fixed rate to a variable rate or visa versa; (viii) provide for a prepayment
charge on terms substantially similar to those of the prepayment charge, if any,
of the Deleted Mortgage Loan; (ix) have the same lien priority as the Deleted
Mortgage Loan; (x) constitute the same occupancy type as the Deleted Mortgage
Loan; (xi) [reserved], and (xii) comply with each representation and warranty
(other than a statistical representation or warranty) set forth in Section 2.03
hereof.

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

                                       45
<PAGE>

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

         RESPONSIBLE OFFICER: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also to whom, with respect to a particular matter, such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.

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

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

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

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

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

         SELLER SHORTFALL INTEREST REQUIREMENT: For the Master Servicer Advance
Date in January 2005, to the extent not covered by Excess Cashflow, an amount
equal to 30 days interest on the Stated Principal Balance of each Mortgage Loans
that does not have a scheduled payment of interest due in the related Due Period
at the Net Mortgage Rates for such Mortgage Loans.

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

         SENIOR ENHANCEMENT PERCENTAGE: With respect to each Distribution Date
on or after the Stepdown Date, the fraction (expressed as a percentage) of (1)
the numerator of which is the excess of (a) the aggregate Stated Principal
Balance of the Mortgage Loans for the preceding Distribution Date over (b) (i)
before the aggregate Certificate Principal Balance of the Senior Certificates
has been reduced to zero, the aggregate Certificate Principal Balance of the
Senior Certificates or (ii) after the Certificate Principal Balances of the
senior Certificates have been reduced to zero, the Certificate Principal Balance
of the most senior Class of Certificates outstanding as of the preceding Master
Servicer Advance Date and (2) the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans for the preceding Distribution Date.

         SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations hereunder, including, but not limited to, the cost of
(i) the preservation, restoration and protection

                                       46
<PAGE>

of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property and (iv)
compliance with the obligations under Section 3.10.

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

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

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

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

         STEPDOWN DATE: The earlier to occur of (i) the Distribution Date
following the Distribution Date on which the aggregate Certificate Principal
Balance of the Senior Certificates is reduced to zero and (ii) the later to
occur of (a) the Distribution Date in January 2008 or (b) the first Distribution
Date on which the aggregate Certificate Principal Balance of the Senior
Certificates (after calculating anticipated distributions on such Distribution
Date) is less than or equal to 61.90% of the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date.

         SUBORDINATE CERTIFICATES: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class B Certificates.

                                       47
<PAGE>

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

         SUBSERVICER:  As defined in Section 3.02(a).

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

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

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

         TAX MATTERS PERSON: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. Initially, this person shall be the
Trustee.

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

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

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

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

         TRUST FUND: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Certificate Account pursuant to Section 3.05(b)(ii); (ii) the
Certificate Account, the Distribution Account, the Carryover Reserve Fund, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) the Cap Contracts; (iv) property that secured a Mortgage Loan
and has been acquired by foreclosure, deed in lieu of foreclosure or otherwise;
(v) the mortgagee's rights under any insurance policies with respect to the
Mortgage Loan; and (vi) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.

         TRUSTEE: The Bank of New York, a New York banking corporation, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a

                                       48
<PAGE>

party and any successor trustee as may from time to time be serving as successor
trustee hereunder.

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

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

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

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

         UNCERTIFICATED ACCRUED INTEREST: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the related
Uncertificated Pass-Through Rate for such Distribution Date, accrued on the
Uncertificated Principal, immediately prior to such Distribution Date.
Uncertificated Accrued Interest for the Uncertificated Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months. For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC I Regular Interests for any Distribution Date the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated among REMIC I Regular Interest LT-AA, REMIC I Regular
Interest LT-A1, REMIC I Regular Interest LT-A2, REMIC I Regular Interest LT-A3,
REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I Regular
Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular Interest LT-M5,
REMIC 1 REGULAR Interest LT-M6, REMIC 1 Regular Interest LT-M7, REMIC 1 Regular
Interest LT-M8, REMIC I Regular Interest LT-B, REMIC I Regular Interest LT-ZZ,
pro rata based on, and to the extent of, one month's interest at the then
applicable respective REMIC I Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC I Regular Interest.

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

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

         UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to each REMIC I
Regular Interest, the weighted average of the Adjusted Net Mortgage Rates of the
Mortgage Loans.

         UNCERTIFICATED REGULAR INTERESTS: The REMIC I Regular Interests.

                                       49
<PAGE>

         UNDERWRITER: Countrywide Securities Corporation.

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

         UNPAID REALIZED LOSS AMOUNT: For any Class of Subordinate Certificates,
the portion of the aggregate Applied Realized Loss Amount previously allocated
to that Class remaining unpaid from prior Distribution Dates, as reduced by the
amount of increase in the related Certificate Principal Balance due to the
receipt of Subsequent Recoveries.

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

                                       50
<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

         2.01 CONVEYANCE OF MORTGAGE LOANS.

         (a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans, including all interest and
principal received and receivable by the Seller on or with respect to the
Mortgage Loans after the Cut-off Date (to the extent not applied in computing
the Cut-off Date Principal Balance thereof) or deposited into the Certificate
Account by the Seller as a Certificate Account Deposit as provided in this
Agreement, other than principal due on the Mortgage Loans on or prior to the
Cut-off Date and interest accruing prior to the Cut-off Date. The Seller
confirms that, concurrently with the transfer and assignment, it has deposited
into the Certificate Account the Certificate Account Deposit.

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

         The Seller further agrees to assign all of its right, title and
interest in and to the interest rate cap transaction evidenced by the Class A-1
Cap Contract Confirmation and Agreement and Corridor Contract Confirmation and
Agreement, and to cause all of its obligations in respect of such transaction to
be assumed by, the Trustee on behalf of the Trust Fund, on the terms and
conditions set forth in the Class A-1 Cap Contract Assignment Agreement and
Corridor Contract Assignment Agreement.

         The Depositor, the Master Servicer and the Trustee agree that it is not
intended that any mortgage loan be included in the Trust that is either (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003 or (ii) a "High-Cost Home Loan" as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004.

         (b) [reserved]

         (c) The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right title and interest in the portion of the Trust Fund
not otherwise conveyed to the Trustee pursuant to Sections 2.01(a) or (b).

         (d) [reserved]

         (e) [reserved]

         (f) [reserved]

                                       51
<PAGE>

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

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

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

                  (iii) in the case of each Mortgage Loan that is not a MERS
         Mortgage Loan, a duly executed assignment of the Mortgage to
         "Asset-Backed Certificates, Series 2004-BC5, CWABS, Inc., by The Bank
         of New York, a New York banking corporation, as trustee under the
         Pooling and Servicing Agreement dated as of December 1, 2004, without
         recourse" (each such assignment, when duly and validly completed, to be
         in recordable form and sufficient to effect the assignment of and
         transfer to the assignee thereof, under the Mortgage to which such
         assignment relates);

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

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

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

         In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has done
so) that such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code

                                       52
<PAGE>

"[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE FIELD NAME FOR
TRUSTEE]" which identifies the Trustee and (b) the code "[IDENTIFY SERIES
SPECIFIC CODE NUMBER]" in the field "Pool Field" which identifies the series of
the Certificates issued in connection with such Mortgage Loans. The Seller
further agrees that it will not, and will not permit the Master Servicer to, and
the Master Servicer agrees that it will not, alter the codes referenced in this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the terms
of this Agreement.

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

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

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<PAGE>

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

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

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

         Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date, the Seller shall either (i) deliver to the
Trustee the Mortgage File as required pursuant to this Section 2.01 for each
Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay Delivery Mortgage
Loan or (B) substitute the Delay Delivery Mortgage Loan for a Replacement
Mortgage Loan, which repurchase or substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03, provided that if
the Seller fails to deliver a Mortgage File for any Delay Delivery Mortgage Loan
within the period provided in the prior sentence, the cure period provided for
in Section 2.02 or in Section 2.03 shall not apply to the initial delivery of
the Mortgage File for such Delay Delivery Mortgage Loan, but rather the

                                       54
<PAGE>

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

         The Trust Fund will not acquire or hold any Mortgage Loan that would
violate the representations made by CHL in Section 2.03(b)(xlii).

         Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.

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

         The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Master Servicer and the Seller an Initial Certification
substantially in the form annexed hereto as Exhibit G-1 to the effect that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), the documents described in
Section 2.01(g)(i) and, in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the documents described in Section 2.01(g)(iii), with respect to
such Mortgage Loan are in the Trustee's possession, and based on its review and
examination and only as to the foregoing documents, such documents appear
regular on their face and relate to such Mortgage Loan. The Trustee agrees to
execute and deliver within 30 days after the Closing Date to the Depositor, the
Master Servicer and the Seller an Interim Certification substantially in the
form annexed hereto as Exhibit G-2 to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as not
covered by such certification), all documents required to be delivered to the
Trustee pursuant to this Agreement with respect to such Mortgage Loan are in its
possession (except those described in Section 2.01(g)(vi)) and based on its
review and examination and only as to the foregoing documents, (i) such
documents appear regular on their face and relate to such Mortgage Loan, and
(ii) the information set forth in items (i), (iv), (v), (vi), (viii), (xi) and
(xiv) of the definition of the "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. On or before the thirtieth (30th)
day after the Closing Date (or if such thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee shall deliver to the Depositor, the Master
Servicer and the Seller a Delay Delivery Certification with respect to the
Mortgage Loans substantially in the form annexed hereto as Exhibit G-3, with any
applicable

                                       55
<PAGE>

exceptions noted thereon. The Trustee shall be under no duty or obligation to
inspect, review or examine such documents, instruments, certificates or other
papers to determine that the same are genuine, enforceable or appropriate for
the represented purpose or that they have actually been recorded in the real
estate records or that they are other than what they purport to be on their
face.

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

         In connection with the Trustee's completion and delivery of such Final
Certification, the Trustee shall review each Mortgage File with respect to the
Mortgage Loans to determine that such Mortgage File contains the documents
listed in Section 2.01(g). If, in the course of such review, the Trustee finds
any document or documents constituting a part of such Mortgage File that do not
meet the requirements of clauses (i)-(iv) and (vi) of Section 2.01(g), the
Trustee shall include such exceptions in such Final Certification (and the
Trustee shall state in such Final Certification whether any Mortgage File does
not then include the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto). If the public
recording office in which a Mortgage or assignment thereof is recorded retains
the original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office, shall be deemed to satisfy the
requirements of clause (ii), (iii) or (iv) of Section 2.01(g), as applicable.
The Seller shall promptly correct or cure such defect referred to above within
90 days from the date it was so notified of such defect and, if the Seller does
not correct or cure such defect within such period, the Seller shall either (A)
if the time to cure such defect expires prior to the end of the second
anniversary of the Closing Date, substitute for the related Mortgage Loan a
Replacement Mortgage Loan, which substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03, or (B) purchase
such Mortgage Loan from the Trust Fund within 90 days from the date the Seller
was notified of such defect in writing at the Purchase Price of such Mortgage
Loan; provided that any such substitution pursuant to (A) above or repurchase
pursuant to (B) above shall not be effected prior to the delivery to the Trustee
of the Opinion of Counsel required by Section 2.05 hereof and any substitution
pursuant to (A) above shall not be effected prior to the additional delivery to
the Trustee of a Request for Release substantially in the form of Exhibit N. No
substitution will be made in any calendar month after the Determination Date for
such month. The Purchase Price for any such Mortgage Loan shall be deposited by
the Seller in the Certificate Account and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit N hereto, the Trustee
shall release the related Mortgage File to the Seller and shall execute and
deliver at the Seller's request such instruments of transfer or assignment as
the Seller has prepared, in each case without recourse, as shall be necessary to
vest in the Seller, or a designee, the Trust Fund's interest in any Mortgage
Loan released pursuant hereto. If pursuant to the foregoing provisions the
Seller repurchases an Mortgage Loan that is a MERS Mortgage Loan, the Master
Servicer shall cause MERS to execute and deliver an assignment of the Mortgage
in recordable form to transfer the Mortgage from MERS to the Seller and shall
cause such Mortgage to be removed from registration on the MERS(R) System in
accordance with MERS' rules and regulations.

                                       56
<PAGE>

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

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

         (b) [reserved]

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

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

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

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

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer, the servicing of the Mortgage Loans by the Master
         Servicer under this Agreement, the consummation of any other of the
         transactions contemplated by this Agreement, and the fulfillment of or
         compliance with the terms hereof are in the ordinary course of business
         of the Master Servicer and will not (A) result in a material breach of
         any term or provision of the certificate of limited partnership,
         partnership agreement or other

                                       57
<PAGE>

         organizational document of the Master Servicer or (B) materially
         conflict with, result in a material breach, violation or acceleration
         of, or result in a material default under, the terms of any other
         material agreement or instrument to which the Master Servicer is a
         party or by which it may be bound, or (C) constitute a material
         violation of any statute, order or regulation applicable to the Master
         Servicer of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over the Master Servicer; and the
         Master Servicer is not in breach or violation of any material indenture
         or other material agreement or instrument, or in violation of any
         statute, order or regulation of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over it
         which breach or violation may materially impair the Master Servicer's
         ability to perform or meet any of its obligations under this Agreement.

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

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

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

                  (vii) The Master Servicer is a member of MERS in good
         standing, and will comply in all material respects with the rules and
         procedures of MERS in connection with the servicing of the Mortgage
         Loans for as long as such Mortgage Loans are registered with MERS.

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

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

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<PAGE>

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

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

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

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

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

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

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<PAGE>

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

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

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

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

                  (xii) Immediately prior to the assignment of each Mortgage
         Loan to the Depositor, the Seller had good title to, and was the sole
         owner of, such Mortgage Loan free and clear of any pledge, lien,
         encumbrance or security interest and had full right and authority,
         subject to no interest or participation of, or agreement with, any
         other party, to sell and assign the same pursuant to this Agreement.

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

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

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

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

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

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<PAGE>

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

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

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

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

                  (xxii) The Mortgage Note and the related Mortgage are genuine,
         and each is the legal, valid and binding obligation of the maker
         thereof, enforceable in accordance with its terms and under applicable
         law, except that (a) the enforceability thereof may be limited by
         bankruptcy, insolvency, moratorium, receivership and other similar laws
         relating to creditors' rights generally and (b) the remedy of specific
         performance and injunctive and other forms of equitable relief may be
         subject to equitable defenses and to the discretion of the court before
         which any proceeding therefor may be brought. To the best of the
         Seller's knowledge, all parties to the Mortgage Note and the Mortgage
         had legal capacity to execute the Mortgage Note and the Mortgage and
         each Mortgage Note and Mortgage have been duly and properly executed by
         such parties.

                  (xxiii) The proceeds of the Mortgage Loan have been fully
         disbursed, there is no requirement for future advances thereunder, and
         any and all requirements as

                                       61
<PAGE>

         to completion of any on-site or off-site improvements and as to
         disbursements of any escrow funds therefor have been complied with. All
         costs, fees and expenses incurred in making, or closing or recording
         the Mortgage Loans were paid.

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

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

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

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

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

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

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

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

                  (xxxii) No more than approximately 5.88% of the Mortgage Loans
         are secured by two- to four-family dwellings. No more than
         approximately 5.29% of the Mortgage Loans are secured by condominium
         units. No more than approximately 0.13% of the Mortgage Loans are
         secured by high rise condominium units. No less than approximately
         79.31% of the Mortgage Loans are secured by single family dwellings. No
         more than approximately 0.18% of the Mortgage Loans are secured by
         manufactured housing. No more than approximately 8.9% of the Mortgage
         Loans are secured by PUDs.

                  (xxxiii) No Mortgage Loan had a principal balance in excess of
         $667,923 at origination.

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

                  (xxxv) Each Mortgage Loan was originated on or after February
         11, 2002;

                  (xxxvi) Each Two-Year Hybrid Mortgage Loan had an initial
         Adjustment Date no later than September 1, 2006; each Three-Year Hybrid
         Mortgage Loan had an initial Adjustment Date no later than September 1,
         2007; each Five-Year Hybrid Mortgage Loan had an initial Adjustment
         Date no later than September 1, 2009.

                  (xxxvii) Approximately 82.81% of the Mortgage Loans provide
         for a prepayment penalty.

                  (xxxviii) On the basis of representations made by the
         Mortgagors in their loan applications, no less than approximately
         94.68% of the owner-occupied Mortgage Loans are secured by
         owner-occupied Mortgaged Properties that are primary residences and no
         more than approximately 0.55% of the owner-occupied Mortgage Loans are
         secured by owner-occupied Mortgaged Properties that are secondary
         residences.

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

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<PAGE>

         maintain all such insurance, including flood insurance, at the
         Mortgagor's cost and expense, and upon the Mortgagor's failure to do
         so, authorizes the holder of the Mortgage to obtain and maintain such
         insurance at the Mortgagor's cost and expense and to seek reimbursement
         therefor from the Mortgagor.

                  (xl) If the Mortgaged Property is in an area identified in the
         Federal Register by the Federal Emergency Management Agency as having
         special flood hazards, a flood insurance policy in a form meeting the
         requirements of the current guidelines of the Flood Insurance
         Administration is in effect with respect to such Mortgaged Property
         with a generally acceptable carrier in an amount representing coverage
         not less than the least of (A) the original outstanding principal
         balance of the Mortgage Loan, (B) the minimum amount required to
         compensate for damage or loss on a replacement cost basis, or (C) the
         maximum amount of insurance that is available under the Flood Disaster
         Protection Act of 1973, as amended.

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

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

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

                  (xliv) Each Mortgage Loan is being serviced by the Master
         Servicer or, if a Mortgage Loan is being serviced by the originator of
         such Mortgage Loan, the Master Servicer and the originator have agreed
         to transfer the servicing of such Mortgage Loan on or prior to February
         1, 2005.

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

                  (xlvi) All taxes, governmental assessments, insurance
         premiums, water, sewer and municipal charges, leasehold payments or
         ground rents that previously became due and owing have been paid, or an
         escrow of funds has been established in an amount sufficient to pay for
         every such item that remains unpaid and that has been assessed, but is
         not yet due and payable. Except for (A) payments in the nature of
         escrow payments, and (B) interest accruing from the date of the
         Mortgage Note or date of disbursement of

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<PAGE>

         the Mortgage proceeds, whichever is later, to the day that precedes by
         one month the Due Date of the first installment of principal and
         interest, including without limitation, taxes and insurance payments,
         the Master Servicer has not advanced funds, or induced, solicited or
         knowingly received any advance of funds by a party other than the
         Mortgagor, directly or indirectly, for the payment of any amount
         required by the Mortgage.

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

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

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

                  (l) The Mortgage Rates borne by the Mortgage Loans as of the
         Cut-off Date ranged from 4.500% per annum to 14.721% per annum and the
         weighted average Mortgage Rate as of the Cut-off Date was 6.853% per
         annum.

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

                  (lii) The Gross Margins on the Adjustable Rate Mortgage Loans
         that are Mortgage Loans range from approximately 1.210% to 10.740% and
         the weighted average Gross Margin was approximately 6.29%.

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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shall cure such breach in all material respects and, if such breach is not so
cured, shall, (i) if such 90-day period expires prior to the second anniversary
of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from
the Trust Fund and substitute in its place a Replacement Mortgage Loan, in the
manner and subject to the conditions set forth in this Section; or (ii)
repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at the
Purchase Price in the manner set forth below; provided that any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof and any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for Release substantially in the form of Exhibit M. Any Representing
Party liable for a breach under this Section 2.03 shall promptly reimburse the
Master Servicer and the Trustee for any expenses reasonably incurred by the
Master Servicer or the Trustee in respect of enforcing the remedies for such
breach. To enable the Master Servicer to amend the Mortgage Loan Schedule, any
Representing Party liable for a breach under this Section 2.03 shall, unless it
cures such breach in a timely fashion pursuant to this Section 2.03, promptly
notify the Master Servicer whether such Representing Party intends either to
repurchase, or to substitute for, the Mortgage Loan affected by such breach.
With respect to the representations and warranties described in this Section
that are made to the best of the Representing Party's knowledge, if it is
discovered by any of the Depositor, the Master Servicer, the Seller or the
Trustee that the substance of such representation and warranty is inaccurate and
such inaccuracy materially and adversely affects the value of the related
Mortgage Loan, notwithstanding the Representing Party's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.

         With respect to any Replacement Mortgage Loan or Loans, the Seller
delivering such Replacement Mortgage Loan shall deliver to the Trustee for the
benefit of the Certificateholders the related Mortgage Note, Mortgage and
assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the Seller delivering such Replacement
Loan on such Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Seller delivering such
Replacement Mortgage Loan shall be deemed to have made with respect to such
Replacement Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
to the Representing Party the Mortgage File relating to such Deleted Mortgage
Loan and held for the benefit of the Certificateholders and shall execute and
deliver at the Master Servicer's direction

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<PAGE>

such instruments of transfer or assignment as have been prepared by the Master
Servicer, in each case without recourse, as shall be necessary to vest in the
Seller, or its respective designee, title to the Trustee's interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03.

         For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of all such Deleted Mortgage
Loans and costs and damages incurred by the Trust Fund in connection with a
repurchase pursuant to Section 2.03 hereof that arise out of a violation of any
predatory or abusive lending law which also constitutes an actual breach of
representation (xxxiv) of Section 2.03(b) hereof. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") shall be forwarded by the Seller to the
Master Servicer and deposited by the Master Servicer into the Certificate
Account not later than the Determination Date for the Distribution Date relating
to the Prepayment Period during which the related Mortgage Loan became required
to be purchased or replaced hereunder.

         In the event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.08 on the Determination Date for the Distribution Date in the month
following the month during which such Seller became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of the Opinion of Counsel required by Section 2.05, if any, and the
receipt of a Request for Release in the form of Exhibit N hereto, the Trustee
shall release the related Mortgage File held for the benefit of the
Certificateholders to such Seller, and the Trustee shall execute and deliver at
such Person's direction the related instruments of transfer or assignment
prepared by such Seller, in each case without recourse, as shall be necessary to
transfer title from the Trustee for the benefit of the Certificateholders and
transfer the Trustee's interest to such Seller to any Mortgage Loan purchased
pursuant to this Section 2.03. It is understood and agreed that the obligation
under this Agreement of the Seller to cure, repurchase or replace any Mortgage
Loan as to which a breach has occurred and is continuing shall constitute the
sole remedy against the Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee.

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

         Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

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

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

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<PAGE>

                  (ii) The Depositor has the full corporate power and authority
         to execute, deliver and perform, and to enter into and consummate the
         transactions contemplated by, this Agreement and has duly authorized,
         by all necessary corporate action on its part, the execution, delivery
         and performance of this Agreement; and this Agreement, assuming the due
         authorization, execution and delivery hereof by the other parties
         hereto, constitutes a legal, valid and binding obligation of the
         Depositor, enforceable against the Depositor in accordance with its
         terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
         reorganization, moratorium and other similar laws affecting creditors'
         rights generally and (ii) general principles of equity, regardless of
         whether enforcement is sought in a proceeding in equity or at law.

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

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

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

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

         It is understood and agreed that the representations and warranties set
forth in the two immediately preceding paragraphs shall survive delivery of the
Mortgage Files to the Trustee. Upon discovery by the Depositor or the Trustee of
a breach of any of the foregoing representations and warranties set forth in the
immediately preceding paragraph (referred to

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<PAGE>

herein as a "breach"), which breach materially and adversely affects the
interest of the Certificateholders, the party discovering such breach shall give
prompt written notice to the others and to each Rating Agency. The Depositor
hereby covenants with respect to the representations and warranties made by it
in this Section 2.04 that within 90 days of the earlier of the discovery it or
receipt of written notice by it from any party of a breach of any representation
or warranty set forth herein made that materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, it shall cure such
breach in all material respects and, if such breach is not so cured, shall
repurchase or replace the affected Mortgage Loan or Loans in accordance with the
procedure set forth in Section 2.03(c).

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

         (a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee an Opinion of Counsel, addressed to the
Trustee, to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause any REMIC created hereunder to
fail to qualify as a REMIC at any time that any Certificates are outstanding.
Any Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such loan and
(b) receipt by the Trustee of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.

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

         Section 2.06 AUTHENTICATION AND DELIVERY OF CERTIFICATES.

         The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to

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perform the duties set forth in this Agreement to the best of its ability, to
the end that the interests of the Holders of the Certificates may be adequately
and effectively protected.

         Section 2.07 COVENANTS OF THE MASTER SERVICER.

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

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

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

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                                  ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

         Section 3.01 MASTER SERVICER TO SERVICE MORTGAGE LOANS.

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

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         In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.

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

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

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

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

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

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

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         Section 3.04 TRUSTEE TO ACT AS MASTER SERVICER.

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

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

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

         (a) The Master Servicer shall make reasonable efforts in accordance
with customary and usual standards of practice of prudent mortgage lenders in
the respective states in which the Mortgaged Properties are located to collect
all payments called for under the terms and provisions of the Mortgage Loans to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late payment
charge or any Prepayment Charge or penalty interest in connection with the
prepayment of a Mortgage Loan and (ii) extend the due dates for payments due on
a Mortgage Note for a period not greater than 270 days. In the event of any such
arrangement, the Master Servicer shall make Advances on the related Mortgage
Loan during the scheduled period in accordance with the amortization schedule of
such Mortgage Loan without modification thereof by reason of such arrangements.
The Master Servicer shall not be required to institute or join in litigation
with respect to collection of any payment (whether under a Mortgage, Mortgage
Note or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that enforcing the
provision of the Mortgage or other instrument pursuant to which such payment is
required is prohibited by applicable law.

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

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

                  (ii) all payments on account of interest (other than interest
         accrued on the Mortgage Loans and due on or prior to the related
         Cut-off Date) on the Mortgage Loans net of the related Servicing Fee
         permitted under Section 3.15 and Prepayment Interest Excess;

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

                  (iv) all Compensating Interest;

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

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

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

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

                  (ix) the Seller Shortfall Interest Requirement;

                  (x) all Prepayment Charges collected; and

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

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

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Section. All funds deposited in the Certificate Account shall be held in trust
for the Certificateholders until withdrawn in accordance with Section 3.08.

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

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

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

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

         (d) No later than 1:00 p.m. Pacific time on the Business Day prior to
the Master Servicer Advance Date in January 2005, the Seller shall remit to the
Master Servicer, and the Master Servicer shall deposit in the Certificate
Account, the Seller Shortfall Interest Requirement (if any) for such Master
Servicer Advance Date.

         (e) [reserved].

         (f) Each institution that maintains the Certificate Account or the
Distribution Account shall invest the funds in each such account, as directed by
the Master Servicer, in Permitted Investments, which shall mature not later than
(x) in the case of the Certificate Account, the second Business Day next
preceding the related Distribution Account Deposit Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
Certificate Account, then such Permitted Investment shall mature not later than
the Business Day next preceding such Distribution Account Deposit Date) and (y)
in the case of the Distribution Account, the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains such Distribution Account, then such Permitted Investment shall mature
not later than such Distribution Date), in each case, shall not be sold or
disposed of prior to its maturity. All such Permitted Investments shall be made
in the name of the Trustee, for the benefit of the Certificateholders. In the
case of the Certificate Account and the Distribution Account, all income and
gain net of any losses realized from any such investment shall be for the
benefit of the Master Servicer as servicing compensation and shall be remitted
to it monthly as provided herein, all income and gain net of any losses realized
from any such investment shall be for the benefit of the Seller and shall be
remitted to the Seller as provided herein. The

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amount of any losses incurred in the Certificate Account or the Distribution
Account in respect of any such investments shall be deposited by the Master
Servicer in the Certificate Account or paid to the Trustee for deposit into the
Distribution Account out of the Master Servicer's own funds immediately as
realized. Any losses incurred in the Carryover Reserve Fund in respect of any
such investments shall be charged against amounts on deposit in the Carryover
Reserve Fund (or such investments) immediately as realized. The Trustee shall
not be liable for the amount of any loss incurred in respect of any investment
or lack of investment of funds held in the Certificate Account, the Distribution
Account, the Carryover Reserve Fund and made in accordance with this Section
3.05 (or in the case of the Carryover Reserve Fund, Section 4.08).

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

         (h) The Trustee shall establish and maintain, on behalf of the Class P
Certificateholders, the Class P Distribution Account. Funds in the Class P
Distribution Account shall be held in trust for the Class P Certificateholders
for the uses and purposes set forth in this Agreement. On the Closing Date, an
amount equal to $100 shall be deposited in the Class P Distribution Account and
shall be held in trust for the Class P Certificateholders for the uses and
purposes set forth in this Agreement. Such funds may not be invested.

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

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

         Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Master Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.

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

         The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage Loans
and all accounts, insurance policies and other matters relating to this
Agreement, such access being afforded without charge, but only

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upon reasonable request and during normal business hours at the offices of the
Master Servicer designated by it.

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

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

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

                  (i) to pay to the Master Servicer (to the extent not
         previously paid to or withheld by the Master Servicer), as servicing
         compensation in accordance with Section 3.15, that portion of any
         payment of interest that equals the Servicing Fee for the period with
         respect to which such interest payment was made, and, as additional
         servicing compensation, those other amounts set forth in Section 3.15;

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

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

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

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

                  (vi) to pay to the Seller, the Depositor or the Master
         Servicer, as applicable, with respect to each Mortgage Loan or property
         acquired in respect thereof that has been purchased pursuant to Section
         2.02, 2.03 or 3.12, all amounts received thereon and not

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         taken into account in determining the related Stated Principal Balance
         of such repurchased Mortgage Loan;

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

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

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

         In addition, no later than 1:00 p.m. Pacific time on the Distribution
Account Deposit Date, the Master Servicer shall withdraw from the Certificate
Account and remit to the Trustee the Interest Remittance Amount and the
Principal Remittance Amount for such Distribution Date to the extent on deposit
in the Certificate Account, and the Trustee shall deposit such amount in the
Distribution Account.

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

         Section 3.09 [Reserved.]

         Section 3.10 MAINTENANCE OF HAZARD INSURANCE.

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

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<PAGE>

         shall be in an amount equal to the lesser of (i) the original principal
         balance of the related Mortgage Loan, (ii) the replacement value of the
         improvements that are part of such Mortgaged Property, or (iii) the
         maximum amount of such insurance available for the related Mortgaged
         Property under the Flood Disaster Protection Act of 1973, as amended.

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

         (a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Master Servicer shall not be deemed to be in
default under this Section 3.11(a) by reason of any transfer or assumption that
the Master Servicer reasonably believes it is restricted by law from preventing.

         (b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall prepare
and deliver or cause to be prepared and delivered to the Trustee for signature
and shall direct, in writing, the Trustee to execute the assumption agreement
with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Maximum Mortgage Rate, the

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Minimum Mortgage Rate, the Gross Margin, the Periodic Rate Cap, the Adjustment
Date and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance with
its underwriting standards as then in effect. The Master Servicer shall notify
the Trustee that any such substitution or assumption agreement has been
completed by forwarding to the Trustee the original of such substitution or
assumption agreement, which in the case of the original shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Master Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Master Servicer as additional servicing compensation.

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

         (a) The Master Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Certificate Account pursuant to Section 3.08
hereof). The Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Master Servicer has knowledge that a Mortgaged Property that the Master Servicer
is contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Master Servicer, the Master Servicer will, prior to
acquiring the Mortgaged Property, consider such risks and only take action in
accordance with its established environmental review procedures.

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

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such REO Property. The Master Servicer shall prepare for and deliver to the
Trustee a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Certificate Account no later
than the close of business on each Determination Date. The Master Servicer shall
perform the tax reporting and withholding related to foreclosures, abandonments
and cancellation of indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.

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

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

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interest at the related Mortgage Rate on the related Mortgage Loan, such excess
shall be considered to be a partial Principal Prepayment for all purposes
hereof.

         The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Master Servicer as provided above, shall be deposited in
the Certificate Account on the next succeeding Determination Date following
receipt thereof for distribution on the related Distribution Date, except that
any Excess Proceeds shall be retained by the Master Servicer as additional
servicing compensation.

         The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second,
to reimburse the Master Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount) on the Mortgage Loan or
related REO Property, at the Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan.

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

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

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         Section 3.13 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.

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

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

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

         Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds, Subsequent Recoveries
or Insurance Proceeds in respect of any Mortgage Loan. All Mortgage Files and
funds collected or held by, or under the control of, the Master Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including but not limited to,
any funds on deposit in the Certificate Account, shall be held by the Master
Servicer for and on behalf of the Trust Fund and shall be and remain the sole
and exclusive property of the Trust Fund, subject to the applicable provisions
of this Agreement. The Master Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Certificate Account, Distribution Account or Carryover Reserve Fund or in any
Escrow Account (as defined in Section 3.06), or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Master
Servicer shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Master Servicer under this
Agreement.

Section 3.15      SERVICING COMPENSATION.

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

         Additional servicing compensation in the form of Excess Proceeds,
assumption fees, late payment charges, Prepayment Interest Excess, and all
income and gain net of any losses realized from Permitted Investments shall be
retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.05 or 3.12(a) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.10 hereof and maintenance of the other forms
of insurance coverage required by Section 3.10 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in Sections 3.08 and
3.12 hereof.

Section 3.16      ACCESS TO CERTAIN DOCUMENTATION.

         The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates or
Certificate Owners and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC.

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Such access shall be afforded without charge, but only upon reasonable and prior
written request and during normal business hours at the offices of the Master
Servicer designated by it. Nothing in this Section shall limit the obligation of
the Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.

         Section 3.17 ANNUAL STATEMENT AS TO COMPLIANCE.

         The Master Servicer shall deliver to the Depositor and the Trustee on
or before the 80th day after the end of the Master Servicer's fiscal year,
commencing with its 2005 fiscal year, an Officer's Certificate stating, as to
the signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of the performance of the Master Servicer
under this Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the Master Servicer
has fulfilled all its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Subservicer has
fulfilled all its obligations under its Subservicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
statement is delivered by the Master Servicer to the Trustee.

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

         On or before the later of (i) the 80th day after the end of the Master
Servicer's fiscal year, commencing with its 2004 fiscal year or (ii) within 30
days of the issuance of the annual audited financial statements beginning with
the audit for the period ending in 2005, the Master Servicer at its expense
shall cause a nationally recognized firm of independent public accountants (who
may also render other services to the Master Servicer, the Seller or any
affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a report to the Trustee, Depositor and the Seller
in compliance with the Uniform Single Attestation Program for Mortgage Bankers.
Copies of such report shall be provided by the Trustee to any Certificateholder
upon request at the Master Servicer's expense, provided such report is delivered
by the Master Servicer to the Trustee. Upon written request, the Master Servicer
shall provide to the Certificateholders its publicly available annual financial
statements (or, for so long as Countrywide Home Loans Servicing LP is the Master
Servicer hereunder, the Master Servicer's parent company's publicly available
annual financial statements), if any, promptly after they become available.

         Section 3.19 THE CAP CONTRACTS.

         The Seller shall assign all of its right, title and interest in and to
the interest rate cap transactions evidenced by the Class A-1 Cap Contract and
Corridor Contract (together the "Cap Contracts" and each a "Cap Contract") to,
and shall cause all of its obligations in respect of such

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transaction to be assumed by, the Trustee on behalf of the Trust Fund, on the
terms and conditions set forth in the Class A-1 Cap Contract Assignment
Agreement and Corridor Contract Assignment Agreement. The Class A-1 Cap Contract
and the Corridor Contract will be assets of the Trust Fund but will not be an
asset of any REMIC. The Master Servicer, on behalf of the Trustee, shall deposit
any amounts received from time to time with respect to the Cap Contracts into
the Carryover Reserve Fund. The parties hereto acknowledge and agree that the
Trustee is directed and authorized by the Depositor to sign the Class A-1 Cap
Contract Assignment Agreement and Corridor Contract Assignment Agreement and
shall be fully protected in relying thereon. The representations made by the
Bank of New York as Assignee under the Class A-1 Cap Contract Assignment
Agreement and Corridor Contract Assignment Agreement are made by the Trustee on
behalf of, and solely as Trustee (and not in its individual capacity) for the
Trust Fund.

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

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

         Section 3.20 PREPAYMENT CHARGES.

         (a) Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full or in part of a Mortgage Loan, the
Master Servicer may not waive any Prepayment Charge or portion thereof required
by the terms of the related Mortgage Note unless (i) the Master Servicer
determines that such waiver would maximize recovery of Liquidation Proceeds for
such Mortgage Loan, taking into account the value of such Prepayment Charge, or
(ii) (A) the enforceability thereof is limited (1) by bankruptcy, insolvency,
moratorium, receivership, or other similar law relating to creditors' rights
generally or (2) due to acceleration in connection with a foreclosure or other
involuntary payment, or (B) the enforceability is otherwise limited or
prohibited by applicable law. In the event of a Principal Prepayment in full or
in part with respect to any Mortgage Loan, the Master Servicer shall deliver to
the Trustee an Officer's Certificate substantially in the form of Exhibit T no
later than the third Business Day following the immediately succeeding
Determination Date with a copy to the Class P Certificateholders. If the Master
Servicer has waived or does not collect all or a portion of a Prepayment Charge
relating to a Principal Prepayment in full or in part due to any action or
omission of the Master Servicer, other than as provided above, the Master

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Servicer shall deliver to the Trustee, together with the Principal Prepayment in
full or in part, the amount of such Prepayment Charge (or such portion thereof
as had been waived) for deposit into the Certificate Account (not later than the
immediately succeeding Master Servicer Advance Date, in the case of such
Prepayment Charge) for distribution in accordance with the terms of this
Agreement.

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

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

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

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                                   ARTICLE IV

                DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER

         Section 4.01 ADVANCES.

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

         (b) If the Master Servicer determines that it will be unable to comply
with its obligation to make the Advances as and when described in the second
sentence of Section 4.01(a), it shall use its best efforts to give written
notice thereof to the Trustee (each such notice a "Trustee Advance Notice"; and
such notice may be given by telecopy), not later than 3:00 P.M., New York time,
on the Business Day immediately preceding the related Master Servicer Advance
Date, specifying the amount that it will be unable to deposit (each such amount
an "Advance Deficiency") and certifying that such Advance Deficiency constitutes
an Advance hereunder and is not a Nonrecoverable Advance. If the Trustee
receives a Trustee Advance Notice on or before 3:30 P.M., New York time on a
Master Servicer Advance Date, the Trustee shall, not later than 3:00 P.M., New
York time, on the related Distribution Date, deposit in the Distribution Account
an amount equal to the Advance Deficiency identified in such Trustee Advance
Notice unless it is prohibited from so doing by applicable law. Notwithstanding
the foregoing, the Trustee shall not be required to make such deposit if the
Trustee shall have received written notification from the Master Servicer that
the Master Servicer has deposited or caused to be deposited in the Certificate
Account an amount equal to such Advance Deficiency. All Advances made by the
Trustee pursuant to this Section 4.01(b) shall accrue interest on behalf of the
Trustee at the Trustee Advance Rate from and including the date such Advances
are made to but excluding the date of repayment, with such interest being an
obligation of the Master Servicer and not the Trust Fund. The Master Servicer
shall reimburse the Trustee for the amount of any Advance made by the Trustee
pursuant to this Section 4.01(b) together with accrued interest, not later than
6:00 P.M., New York time on the Business Day following the related Distribution
Date. In the event that the Master Servicer does not reimburse the Trustee in
accordance with the requirements of the preceding sentence, the Trustee shall
immediately (a) terminate all of the rights and obligations of the Master
Servicer under this Agreement in accordance with Section 7.01 and (b) subject to
the limitations set forth in Section 3.04, assume all of the rights and
obligations of the Master Servicer hereunder.

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

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

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

         Section 4.03 [Reserved]

         Section 4.04 DISTRIBUTIONS.

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

                  (i) to the Class A-1, Class A-2 and Class A-3 Certificates,
         pro rata, based on their respective entitlements, the Current Interest
         and any Interest Carry Forward Amount for such Class;

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

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

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

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

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

                  (vii) to the Class M-6 Certificates, the Class M-6 Current
         Interest;

                  (viii) to the Class M-7 Certificates, the Class M-7 Current
         Interest;

                  (ix) to the Class M-8 Certificates, the Class M-8 Current
         Interest;

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

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

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

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

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

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

                           (A) sequentially, to the Class A-R Certificates, the
                  classes of Class A Certificates (allocated among those classes
                  as provided below), Class M-1, Class M-2, Class M-3, Class
                  M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class B
                  Certificates, in that order, in each case until the
                  Certificate Principal Balance thereof is reduced to zero;

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

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

                           (A) sequentially, to the classes of Class A
                  Certificates (allocated among those classes as provided
                  below), the Class A Principal Distribution Amount, until the
                  Certificate Principal Balances thereof are reduced to zero;

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

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

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

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

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

                           (G) to the Class M-6 Certificates, the Class M-6
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

                           (H) to the Class M-7 Certificates, the Class M-7
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

                           (I) to the Class M-8 Certificates, the Class M-8
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

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

                           (K) any remainder, as part of the Excess Cashflow;

         provided however, that any distributions of the Principal Distribution
Amount to the classes of Class A Certificate will be allocated sequentially, to
the Class A-1, Class A-2 and Class A-3 Certificates, in that order, until the
Certificate Principal Balance of each such class is reduced to zero; provided,
however, that (1) if the aggregate Certificate Principal Balance of the Class A
Certificates is greater than the aggregate Stated Principal Balance of the
Mortgage Loans, distributions of the Principal Distribution Amount will be
allocated to the Class A-1, Class A-2 and Class A-3 Certificates, pro rata, and
(2) on any Distribution Date on which the Certificate Principal Balance of the
Class A-1 Certificates has been reduced to zero and the Class A-1 Turbo Trigger
Event Reduction Amount is greater than zero, the Principal Distribution Amount
will be distributed to the Class C Certificates, up to a maximum amount equal to
the Class A-1 Turbo Trigger Event Reduction Amount, prior to distributions of
principal to the Class A-2 Certificates.

         (e) With respect to any Distribution Date, any Excess Cashflow, Class
A-1 Cap Contract Payment Amount and Corridor Contract Payment Amount will be
paid to the classes of Certificates as follows:

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

                  (ii) from any remaining Excess Cashflow, sequentially to the
         holders of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
         Class M-6, Class M-7, Class M-8 and Class B Certificates, in that
         order, in an amount equal to any Interest Carry Forward Amount for such
         Class or Classes;

                  (iii) from any remaining Excess Cashflow, sequentially to the
         holders of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
         Class M-6, Class M-7, Class M-8 and Class B Certificates, in that
         order, in an amount equal to the Unpaid Realized Loss Amounts for such
         Class or Classes;

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                  (iv) (a) from the Class A-1 Cap Contract Payment Amount, to
         the Class A-1 Certificates, to the extent needed to pay any Net Rate
         Carryover for such class; and (b) from the Corridor Contract Payment
         Amount, to the Senior Certificates (other than the Class A-R
         Certificates) and Subordinated Certificates, on a pro rata basis, based
         on the Certificate Principal Balances thereof, to the extent needed to
         pay any related Net Rate Carryover for each such class; provided that
         any Corridor Contract Payment Amount remaining after such allocation to
         pay Net Rate Carryover based on the Certificate Principal Balances of
         these Certificates will be distributed to each such class of
         Certificates with respect to which there remains any unpaid Net Rate
         Carryover (after the distribution based on Certificate Principal
         Balances), pro rata, based on the amount of such unpaid Net Rate
         Carryover, until reduced to zero.;

                  (v) from any remaining Excess Cashflow, to the Class A-1,
         Class A-2, Class A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class
         M-5, Class M-6, Class M-7, Class M-8 and Class B Certificates, on a pro
         rata basis, based on the Certificate Principal Balances thereof, to the
         extent needed to pay any remaining Net Rate Carryover for each such
         class; provided that any Excess Cashflow remaining after such
         allocation to pay Net Rate Carryover based on the Certificate Principal
         Balances of these Certificates will be distributed to each such class
         of Certificates with respect to which there remains any unpaid Net Rate
         Carryover (after the distribution based on Certificate Principal
         Balances), pro rata, based on the amount of such unpaid Net Rate
         Carryover, until reduced to zero;

                  (vi) from any remaining Excess Cashflow, to the Class A-1
         Certificates, the Class A-1 Turbo Trigger Event Payment Amount, if any;

                  (vii) from any remaining Excess Cashflow, Class A- 1 Cap
         Contract Payment Amount, and Corridor Contract Payment Amount to the
         Class C Certificates, (x) the Class C Current Interest and (y) the
         Overcollateralization Reduction Amount, and on any Distribution Date on
         which the Certificate Principal Balances of the Class A-1, Class A-2,
         Class A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
         M-6, Class M-7, Class M-8 and Class B Certificates have been reduced to
         zero, any remaining amounts in reduction of the Certificate Principal
         Balance of the Class C Certificates, until the Certificate Principal of
         the Class C Certificates has been reduced to zero; and

                  (viii) any remaining Excess Cashflow, to the Class A-R
         Certificates.

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

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

         (h) [reserved]

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

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

                  (iii) to the Class M-8 Certificates until the Class M-8
         Certificate Principal Balance is reduced to zero;

                  (iv) to the Class M-7 Certificates until the Class M-7
         Certificate Principal Balance is reduced to zero;

                  (v) to the Class M-6 Certificates until the Class M-6
         Certificate Principal Balance is reduced to zero;

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

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

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

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

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

         (i) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Trustee at least 5 Business Days prior to the related Record Date
and (ii) such Holder shall hold Regular Certificates with aggregate principal
denominations of not less than $1,000,000 or evidencing a Percentage Interest
aggregating 10% or more with respect to such Class or, if not, by check mailed
by first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 9.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.

         On or before 5:00 p.m. Pacific time on the fifth Business Day following
each Determination Date (but in no event later than 5:00 p.m. Pacific time on
the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to

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by the Master Servicer and the Trustee such as to permit the Trustee
to prepare the Monthly Statement to Certificateholders and make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Trustee shall not be responsible to recompute, recalculate or verify information
provided to it by the Master Servicer and shall be permitted to conclusively
rely on any information provided to it by the Master Servicer.

         Section 4.05 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.

         (a) Not later than each Distribution Date, the Trustee shall prepare
and cause to be forwarded by first class mail to each Holder of a Class of
Certificates of the Trust Fund, the Master Servicer, the Seller and the
Depositor a statement setting forth for the Certificates:

                  (i) the amount of the related distribution to Holders of each
         Class allocable to principal, separately identifying (A) the aggregate
         amount of any Principal Prepayments included therein and (B) the
         aggregate of all scheduled payments of principal included therein;

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

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

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

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

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

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

                  (viii) with respect to the January 2005 Distribution Date, the
         Seller Shortfall Interest Requirement (if any) for the related Master
         Servicer Advance Date;

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

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

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

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<PAGE>

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

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

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

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

                  (xvi) whether a Trigger Event or a Class A-1 Turbo Trigger
         Event is in effect;

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

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

                  (xix) [reserved];

                  (xx) [reserved]; and

                  (xxi) the amount, if any, due, and the amount received under
         each Cap Contract for such Distribution Date.

                  (xxii) the amount, if any, of the Class A-1 Turbo Trigger
         Event Payment Amount.

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

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

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<PAGE>

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

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

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

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

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

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

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

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

         The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.

         Section 4.06 [Reserved]

         Section 4.07 [Reserved]

         Section 4.08 CARRYOVER RESERVE FUND.

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

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<PAGE>

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

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

         (d) Upon termination of the Trust Fund, any amounts remaining in the
Carryover Reserve Fund shall be distributed to the Holders of the Class C
Certificates in the same manner as if distributed pursuant to Section 4.04(f)
hereof.

         Section 4.09 DISTRIBUTIONS ON THE REMIC I REGULAR INTERESTS.

         (a) (1)(A) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class AR Certificates (in respect
of the Class R-I Interest), as the case may be:

                  first, (a) to Holders of REMIC I Regular Interest LT-AA, REMIC
         Regular Interest LT-A1, REMIC I Regular Interest LT-A2, REMIC I Regular
         Interest LT-A3, REMIC I Regular Interest LT-M1, REMIC I Regular
         Interest LT-M2, REMIC Regular Interest LT-M3, REMIC Regular Interest
         LT-M4, REMIC Regular Interest LT-M5, REMIC 1 REGULAR Interest LT-M6,
         REMIC 1 Regular Interest LT-M7, REMIC 1 Regular Interest LT-M8, REMIC
         Regular Interest LT-B, REMIC I Regular Interest LT-ZZ, REMIC I Regular
         Interest LT-P and REMIC I Regular Interest LT-R, pro rata, in an amount
         equal to (A) the Uncertificated Accrued Interest for such Distribution
         Date, plus (B) any amounts in respect thereof remaining unpaid from
         previous Distribution Dates. Amounts payable as Uncertificated Accrued
         Interest in respect of REMIC I Regular Interest LT-ZZ shall be reduced
         and deferred when the REMIC I Overcollateralized Amount is less than
         the REMIC I Overcollateralization Target Amount, by the lesser of (x)
         the amount of such difference and (y) the REMIC I Regular Interest
         LT-ZZ Maximum Interest Deferral Amount and such amount will be payable
         to the Holders of REMIC Regular Interest LT-A1, REMIC I Regular
         Interest LT-A2, REMIC Regular Interest LT-A3, REMIC I Regular Interest
         LT-M1, REMIC I Regular Interest LT-M2, REMIC Regular Interest LT-M3,
         REMIC Regular Interest LT-M4, REMIC Regular Interest LT-M5, REMIC 1
         REGULAR Interest LT-M6, REMIC 1 Regular Interest LT-M7, REMIC 1 Regular
         Interest LT-M8 and REMIC Regular Interest LT-B in the same proportion
         as the Overcollateralization Increase Amount is allocated to the

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         Corresponding Certificates and the Uncertificated Principal Balance of
         REMIC I Regular Interest LT-ZZ shall be increased by such amount; and

                  second, to the Holders of REMIC I Regular Interests, in an
         amount equal to the remainder of the REMIC I Marker Allocation
         Percentage of Available Funds for such Distribution Date after the
         distributions made pursuant to clause (i) above, allocated as follows:

                  (a) to the Class LT-P on the Distribution Date immediately
         following the expiration of the latest Prepayment Charge as identified
         on the Prepayment Charge Schedule or any Distribution Date thereafter,
         at which point such amount shall be distributed to REMIC I Regular
         Interest LT-P, until $100 has been distributed pursuant to this clause;

                  (b) 98.00% of such remainder (other than amounts payable under
         clause (d) below), to the Holders of REMIC I Regular Interest LT-AA,
         until the Uncertificated Principal Balance of such REMIC I Regular
         Interest is reduced to zero;

                  (c) 2.00% of such remainder (other than amounts payable under
         clause (a) above), first to the Holders of REMIC I Regular Interest
         LT-A1, REMIC I Regular Interest LT-A2, REMIC I Regular Interest LT-A3,
         REMIC I Regular Interest LT-M1, REMIC I Regular Interest LT-M2, REMIC I
         Regular Interest LT-M3, REMIC I Regular Interest LT-M4, REMIC I Regular
         Interest LT-M5, REMIC 1 REGULAR Interest LT-M6, REMIC 1 Regular
         Interest LT-M7, REMIC 1 Regular Interest LT-M8 and REMIC Regular
         Interest LT-B, in the same proportion as principal payments are
         allocated to the Corresponding Certificates, until the Uncertificated
         Principal Balances of such REMIC I Regular Interests are reduced to
         zero and second, to the Holders of REMIC I Regular Interest LT-ZZ,
         until the Uncertificated Principal Balance of such REMIC I Regular
         Interest is reduced to zero; then

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

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

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

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                     (d) Notwithstanding the distributions described in this
         Section 4.09, distribution of funds shall be made only in accordance
         with Section 4.04.

         Section 4.10 [Reserved].

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

         (a) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date to the following REMIC I Regular Interests in
the specified percentages, as follows: first, to Uncertificated Interest payable
to the REMIC I Regular Interest LT-AA and REMIC I Regular Interest LT-ZZ up to
an aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98%
and 2%, respectively; second, to the Uncertificated Principal Balances of the
REMIC I Regular Interest LT-AA and REMIC I Regular Interest LT-ZZ up to an
aggregate amount equal to the REMIC I Principal Loss Allocation Amount, 98% and
2%, respectively; third, to the Uncertificated Principal Balances of REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-B and REMIC I Regular
Interest LT-ZZ, 98%, 1.00% and 1%, respectively, until the Uncertificated
Principal Balances of REMIC I Regular Interest LT-B has been reduced to zero;
fourth, to the Uncertificated Principal Balances of REMIC I Regular Interest
LT-AA, REMIC I Regular Interest LT-M8 and REMIC I Regular Interest LT-ZZ, 98%,
1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC I
Regular Interest LT-M8 has been reduced to zero; fifth, to the Uncertificated
Principal Balances of REMIC I Regular Interest LT-AA, REMIC I Regular Interest
LT-M7 and REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC I Regular Interest LT-M7 has been
reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-M6 and REMIC I Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LT-M6 has been reduced to zero; seventh to
the Uncertificated Principal Balances of REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT-M5 and REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M5 has been reduced to zero; eighth to the Uncertificated Principal
Balances of REMIC I Regular Interest LT-AA, REMIC I Regular Interest LT-M4 and
REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT-M4 has been
reduced to zero; ninth to the Uncertificated Principal Balances of REMIC I
Regular Interest LT-AA, REMIC I Regular Interest LT-M3 and REMIC I Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest LT-M3 has been reduced to zero; tenth to the
Uncertificated Principal Balances of REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT-M2 and REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M2 has been reduced to zero; and eleventh sixth to the
Uncertificated Principal Balances of REMIC I Regular Interest LT-AA, REMIC I
Regular Interest LT-M1 and REMIC I Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest LT-M1 has been reduced to zero.

         Section 4.12 THE CLASS P CERTIFICATES.

         On the Closing Date, $100 shall be deposited into the Class P
Distribution Account and shall be held in trust for the benefit of the Class P
Certificateholders for payment pursuant to

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Section 4.04 upon the earlier of (a) the exercise of the Optional Termination by
the Master Servicer pursuant to Section 9.01 and (b) the Class P Principal
Distribution Date. Such funds may not be invested.

                                      102
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                                   ARTICLE V

                                THE CERTIFICATES

         Section 5.01 THE CERTIFICATES.

         The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-9, B, C and D. The Certificates shall be issuable in
registered form, in the minimum dollar denominations, integral dollar multiples
in excess thereof and aggregate dollar denominations as set forth in the
following table:

                                         Integral                    Original
                                        Multiples                  Certificate
                  Minimum              in Excess of                 Principal
      Class     Denomination             Minimum                     Balance
--------------------------------------------------------------------------------
       A-1          $   20,000                $1,000        $     295,000,000
       A-2          $   20,000                $1,000        $     252,467,000
       A-3          $   20,000                $1,000        $      88,393,000
       A-R          $    99.95(1)                N/A        $             100
       M-1          $   20,000                $1,000        $      26,256,000
       M-2          $   20,000                $1,000        $      24,354,000
       M-3          $   20,000                $1,000        $      13,699,000
       M-4          $   20,000                $1,000        $      12,557,000
       M-5          $   20,000                $1,000        $      13,318,000
       M-6          $   20,000                $1,000        $      11,416,000
       M-7          $   20,000                $1,000        $       8,372,000
       M-8          $   20,000                $1,000        $       7,611,000
        B           $   20,000                $1,000        $       7,609,000
        C                    20%                  1%
        P                    20%                  1%        $             100
---------------------
(1) The Tax Matters Person Certificate may be issued in a denomination of $0.05.

         The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their

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<PAGE>

authentication. On the Closing Date, the Trustee shall authenticate the
Certificates to be issued at the written direction of the Depositor, or any
affiliate thereof.

         Section 5.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND
                      EXCHANGE OF CERTIFICATES.

         (a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.09 hereof, a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of Transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of Transfer of any
Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.

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

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

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

         (b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee in writing the facts
surrounding the Transfer in substantially the forms set forth in Exhibit J (the
"Transferor Certificate") and (i) deliver a letter in substantially the form of
either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the
Certificateholder desiring to effect such transfer an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate

                                      104
<PAGE>

without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Master
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such Transfer shall, and does hereby agree to,
indemnify the Trustee, the Depositor, the Seller and the Master Servicer against
any liability that may result if the Transfer is not so exempt or is not made in
accordance with such federal and state laws.

         No Transfer of an ERISA-Restricted Certificate or a Subordinate
Certificate shall be made unless the Trustee shall have received either (i) a
representation from the transferee of such Certificate acceptable to and in form
and substance satisfactory to the Trustee (in the event such Certificate is a
Private Certificate that is a Definitive Certificate, such requirement is
satisfied only by the Trustee's receipt of a representation letter from the
transferee substantially in the form of Exhibit K or Exhibit L, or in the event
such Certificate is a Class A-R Certificate, such requirement is satisfied only
by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code, nor a Person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement to effect such transfer, or (ii) in the case of the Subordinate
Certificates, a representation from the transferee of such Certificates that (A)
it has acquired and is holding such Certificate in reliance on the Underwriters'
Exemption and that it understands that there are certain conditions to the
availability of the Underwriters' Exemption, including that the Certificate must
be rated, at the time of purchase, not less than "BBB-" or its equivalent by one
of the Rating Agencies or (B) the purchaser is an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and the conditions of Sections
I and III of PTCE 95-60 have been satisfied or (iii) in the case of the Class C
Certificates or the Class P Certificates if such Certificates have been offered
in a placement or underwriting which meets the requirements of the Underwriter's
Exemption, a representation that the purchaser is an insurance company which is
purchasing such Certificates with funds contained in or "insurance company
general account" (as such term is defined in Section V(e) of PTCE 95-60) and the
conditions of sections I and III of PTCE 95-60 have been satisfied, or in the
case of any ERISA-Restricted Certificate presented for registration in the name
of an employee benefit plan subject to ERISA, or a plan or arrangement subject
to Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement, or using such plan's or arrangement's assets,
an opinion of counsel satisfactory to the Trustee, for the benefit of the
Trustee, the Seller, the Depositor and the Master Servicer, and on which they
may rely, which opinion of counsel shall not be an expense of either the Trustee
or the Trust Fund, addressed to the Trustee to the effect that the purchase and
holding of such ERISA-Restricted Certificate is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code and will not subject the
Depositor, the Seller, the Master Servicer or Trustee to any obligation, or
liability (including liabilities or obligations under ERISA or Section 4975 of
the Code) in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Book-Entry Certificate or

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<PAGE>

a Class A-R Certificate, in the event the representation letter referred to in
the preceding sentence is not so furnished, such representation shall be deemed
to have been made to the Trustee by the transferee's (including an initial
acquiror's) acceptance of such ERISA-Restricted Certificate. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate or a Subordinate Certificate to or on behalf of an
employee benefit plan subject to ERISA or the Code other than as described above
shall be void and of no effect. Any purported beneficial owner whose acquisition
or holding of the Certificate or interest therein was effected in violation of
the conditions described in this paragraph shall indemnify and hold harmless the
Depositor, the Trustee, the Master Servicer, the Seller, any Subservicer and the
Trust Fund from and against any and all liabilities, claims, costs or expenses
incurred by those parties as a result of that acquisition or holding.

         To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of Transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the Transfer was
registered by the Trustee in accordance with the foregoing requirements.

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

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

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

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

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Class A-R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Class A-R Certificate in violation of the
         provisions

                                      106
<PAGE>

         of this Section 5.02(c), then the last preceding Permitted Transferee
         shall be restored to all rights as Holder thereof retroactive to the
         date of registration of Transfer of such Class A-R Certificate. The
         Trustee shall be under no liability to any Person for any registration
         of Transfer of a Class A-R Certificate that is in fact not permitted by
         Section 5.02(b) and this Section 5.02(c) or for making any payments due
         on such Certificate to the Holder thereof or taking any other action
         with respect to such Holder under the provisions of this Agreement so
         long as the Transfer was registered after receipt of the related
         Transfer Affidavit, Transferor Certificate and either the Rule 144A
         Letter or the Investment Letter. The Trustee shall be entitled but not
         obligated to recover from any Holder of a Class A-R Certificate that
         was in fact not a Permitted Transferee at the time it became a Holder
         or, at such subsequent time as it became other than a Permitted
         Transferee, all payments made on such Class A-R Certificate at and
         after either such time. Any such payments so recovered by the Trustee
         shall be paid and delivered by the Trustee to the last preceding
         Permitted Transferee of such Certificate.

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

         The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Seller or
the Master Servicer, to the effect that the elimination of such restrictions
will not cause any REMIC hereunder to fail to qualify as a REMIC at any time
that the Certificates are outstanding or result in the imposition of any tax on
the Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Class A-R Certificate hereby consents to
any amendment of this Agreement that, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Class A-R Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Class A-R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.

         (d) The preparation and delivery of all representation letters and
opinions referred to above in this Section 5.02 in connection with any Transfers
shall be at the expense of the parties to such Transfers.

         Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Master Servicer and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest.

                                      107
<PAGE>

In connection with the issuance of any new Certificate under this Section 5.03,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. All Certificates surrendered to the Trustee under
the terms of this Section 5.03 shall be canceled and destroyed by the Trustee in
accordance with its standard procedures without liability on its part.

         Section 5.04 PERSONS DEEMED OWNERS.

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

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

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

         Section 5.06 BOOK-ENTRY CERTIFICATES.

         The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
5.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 5.08:

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

         (b) the Depositor, the Seller, the Master Servicer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of

                                      108
<PAGE>

distributions) as the authorized representative of the respective Certificate
Owners of such Certificates;

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

         (d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;

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

         (f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and

         (g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.

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

         Section 5.07 NOTICES TO DEPOSITORY.

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

         Section 5.08 DEFINITIVE CERTIFICATES.

         If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor advises the Trustee that the Depository is no
longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor or (b) after the occurrence
and continuation of an Event of Default, Certificate Owners of such Book-Entry
Certificates having not less than 51% of the Voting Rights evidenced by any
Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Certificates,

                                      109
<PAGE>

through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners of such Class
requesting the same. The Depositor shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Trustee of any such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall authenticate and deliver such Definitive
Certificates. Neither the Depositor nor the Trustee shall be liable for any
delay in delivery of such instructions and each may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or to
be performed by the Depository shall be deemed to be imposed upon and performed
by the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of such Definitive
Certificates as Certificateholders hereunder.

         Section 5.09 MAINTENANCE OF OFFICE OR AGENCY.

         The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially
designates its offices at 101 Barclay Street, New York, New York 10286,
Attention: Corporate Trust MBS Administration, as offices for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.

                                      110
<PAGE>

                                   ARTICLE VI

                            THE DEPOSITOR, THE MASTER
                             SERVICER AND THE SELLER

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

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

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

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

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

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

         None of the Depositor, the Seller, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided that this provision shall not protect the Depositor, the Seller, the
Master Servicer or any such Person against any breach of representations or
warranties made by it herein or protect the Depositor, the Seller, the Master
Servicer or any such Person from any liability that would otherwise be imposed
by reasons of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Seller, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Seller or the Master
Servicer may rely in good faith on any document of any kind

                                      111
<PAGE>

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

         Section 6.04 LIMITATION ON RESIGNATION OF MASTER SERVICER.

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

         Section 6.05 ERRORS AND OMISSIONS INSURANCE; FIDELITY BONDS.

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

                                      112
<PAGE>
                                  ARTICLE VII

                     DEFAULT; TERMINATION OF MASTER SERVICER

         Section 7.01 EVENTS OF DEFAULT.

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

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

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

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

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

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

                  (vi) the Master Servicer shall fail to reimburse in full the
         Trustee not later than 6:00 P.M., New York time on the Business Day
         following the related Distribution Date

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         for any Advance made by the Trustee pursuant to Section 4.01(b)
         together with accrued and unpaid interest.

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

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

         Section 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

         On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all fees, costs and expenses relating to the Mortgage Loans that the
Master Servicer would have been entitled to if the Master Servicer had continued
to act hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not

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adversely affect the then current rating of the Certificates by each Rating
Agency as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. Any successor Master Servicer shall be an institution that
is a Fannie Mae and Freddie Mac approved seller/servicer in good standing, that
has a net worth of at least $15,000,000, and that is willing to service the
Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement accepting such delegation and assignment, that contains an assumption
by such Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Master Servicer (other than liabilities of the Master
Servicer under Section 6.03 hereof incurred prior to termination of the Master
Servicer under Section 7.01), with like effect as if originally named as a party
to this Agreement; and provided further that each Rating Agency acknowledges
that its rating of the Certificates in effect immediately prior to such
assignment and delegation will not be qualified or reduced as a result of such
assignment and delegation. No appointment of a successor to the Master Servicer
hereunder shall be effective until the Trustee shall have consented thereto, and
written notice of such proposed appointment shall have been provided by the
Trustee to each Certificateholder. The Trustee shall not resign as servicer
until a successor servicer has been appointed and has accepted such appointment.
Pending appointment of a successor to the Master Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.04 hereof, act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided that no such compensation
shall be in excess of that permitted the Master Servicer hereunder. The Trustee
and such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. Neither the Trustee nor
any other successor servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused by
the failure of the Master Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.

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

         In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to be delivered to the Trustee or the
Custodian promptly upon receipt of the original with evidence

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of recording thereon or a copy certified by the public recording office in which
such assignment was recorded.

         Section 7.03 NOTIFICATION TO CERTIFICATEHOLDERS.

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

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

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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

         Section 8.01 DUTIES OF TRUSTEE.

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

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

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

                  (i) prior to the occurrence of an Event of Default, and after
         the curing of all such Events of Default that may have occurred, the
         duties and obligations of the Trustee shall be determined solely by the
         express provisions of this Agreement, the Trustee shall not be liable,
         individually or as Trustee, except for the performance of such duties
         and obligations as are specifically set forth in this Agreement, no
         implied covenants or obligations shall be read into this Agreement
         against the Trustee and the Trustee may conclusively rely, as to the
         truth of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee and
         conforming to the requirements of this Agreement that it reasonably
         believed in good faith to be genuine and to have been duly executed by
         the proper authorities respecting any matters arising hereunder;

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

                  (iii) the Trustee shall not be liable, individually or as
         Trustee, with respect to any action taken, suffered or omitted to be
         taken by it in good faith in accordance with the direction of Holders
         of each Class of Certificates evidencing not less than 25% of the
         Voting Rights of such Class relating to the time, method and place of
         conducting any proceeding for any remedy available to the Trustee, or
         exercising any trust or power conferred upon the Trustee under this
         Agreement; and

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

         Section 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.

         (a) Except as otherwise provided in Section 8.01:

                  (i) the Trustee may request and rely upon and shall be
         protected in acting or refraining from acting upon any resolution,
         Officer's Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document believed by
         it to be genuine and to have been signed or presented by the proper
         party or parties;

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

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

                  (iv) prior to the occurrence of an Event of Default hereunder
         and after the curing of all Events of Default that may have occurred,
         the Trustee shall not be bound to make any investigation into the facts
         or matters stated in any resolution, certificate, statement,
         instrument, opinion, report, notice, request, consent, order, approval,
         bond or other paper or document, unless requested in writing so to do
         by Holders of each Class of Certificates evidencing not less than 25%
         of the Voting Rights of such Class;

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

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

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

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

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                  (ix) the Trustee shall be under no obligation to exercise any
         of the trusts or powers vested in it by this Agreement or to make any
         investigation of matters arising hereunder or to institute, conduct or
         defend any litigation hereunder or in relation hereto at the request,
         order or direction of any of the Certificateholders, pursuant to the
         provisions of this Agreement, unless such Certificateholders shall have
         offered to the Trustee reasonable security or indemnity against the
         costs, expenses and liabilities that may be incurred therein or
         thereby.

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

         Section 8.03 TRUSTEE NOT LIABLE FOR MORTGAGE LOANS.

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

         Section 8.04 TRUSTEE MAY OWN CERTIFICATES.

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

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

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

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or by reason of reckless disregard of the Trustee's obligations and duties
hereunder and (ii) resulting from any error in any tax or information return
prepared by the Master Servicer. Such indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee hereunder.

         Section 8.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.

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

         Section 8.07 RESIGNATION AND REMOVAL OF TRUSTEE.

         The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
the Master Servicer and by mailing notice of resignation by first class mail,
postage prepaid, to the Certificateholders at their addresses appearing on the
Certificate Register and each Rating Agency, not less than 60 days before the
date specified in such notice when, subject to Section 8.08, such resignation is
to take effect, and (2) acceptance of appointment by a successor trustee in
accordance with Section 8.08 and meeting the qualifications set forth in Section
8.06. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.

         If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee and

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appoint a successor trustee by written instrument, in triplicate, one copy of
which instrument shall be delivered to the Trustee, one copy of which shall be
delivered to the Master Servicer and one copy of which shall be delivered to the
successor trustee.

         The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the Master Servicer
one complete set to the Trustee so removed and one complete set to the successor
so appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.

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

         Section 8.08 SUCCESSOR TRUSTEE.

         Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, its predecessor trustee
and the Master Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.

         No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.

         Section 8.09 MERGER OR CONSOLIDATION OF TRUSTEE.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to substantially all of the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be eligible under the provisions of Section 8.06 hereof
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.

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         Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.

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

                  (i) All rights, powers, duties and obligations conferred or
         imposed upon the Trustee, except for the obligation of the Trustee
         under this Agreement to advance funds on behalf of the Master Servicer,
         shall be conferred or imposed upon and exercised or performed by the
         Trustee and such separate trustee or co-trustee jointly (it being
         understood that such separate trustee or co-trustee is not authorized
         to act separately without the Trustee joining in such act), except to
         the extent that under any law of any jurisdiction in which any
         particular act or acts are to be performed (whether as Trustee
         hereunder or as successor to the Master Servicer hereunder), the
         Trustee shall be incompetent or unqualified to perform such act or
         acts, in which event such rights, powers, duties and obligations
         (including the holding of title to the Trust Fund or any portion
         thereof in any such jurisdiction) shall be exercised and performed
         singly by such separate trustee or co-trustee, but solely at the
         direction of the Trustee;

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

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

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

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this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Master Servicer and the Depositor.

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

         Section 8.11 TAX MATTERS.

         It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each of REMIC I and REMIC
II will qualify as, a "real estate mortgage investment conduit" as defined in
and in accordance with the REMIC Provisions. In furtherance of such intention,
the Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of the Trust Fund and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Returns
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each REMIC created hereunder
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code
for the Trust Fund; (c) make or cause to be made elections, on behalf of each
REMIC created hereunder to be treated as a REMIC on the federal tax return of
each such REMIC for its first taxable year (and, if necessary, under applicable
state law); (d) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns and reports as and when required
to be provided to them in accordance with the REMIC Provisions, including
without limitation, the calculation of any original issue discount using the
Prepayment Assumption; (e) provide information necessary for the computation of
tax imposed on the transfer of a Class A-R Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax); (f) to the extent that they are under its control conduct
the affairs of the Trust Fund at all times that any Certificates are outstanding
so as to maintain the status of each REMIC created hereunder as a REMIC under
the REMIC Provisions; (g) not knowingly or intentionally take any action or omit
to take any action that would cause the termination of the REMIC status of any
REMIC created hereunder; (h) pay, from the sources specified in the last
paragraph of this

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Section 8.11, the amount of any federal, state and local taxes, including
prohibited transaction taxes as described below, imposed on any REMIC created
hereunder prior to the termination of the Trust Fund when and as the same shall
be due and payable (but such obligation shall not prevent the Trustee or any
other appropriate Person from contesting any such tax in appropriate proceedings
and shall not prevent the Trustee from withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings); (i) sign or cause to
be signed federal, state or local income tax or information returns; (j)
maintain records relating to each REMIC created hereunder, including but not
limited to the income, expenses, assets and liabilities of each such REMIC, and
the fair market value and adjusted basis of the Trust Fund property determined
at such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent the Trust Fund in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year of
any REMIC created hereunder, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of the Trust Fund, and otherwise act on behalf of any REMIC created
hereunder in relation to any tax matter involving any such REMIC.

         In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors, omissions or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.

         In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
Trust Fund pursuant to Sections 23153 and 24872 of the California Revenue and
Taxation Code if not paid as otherwise provided for herein, such tax shall be
paid by (i) the Trustee, if any such other tax arises out of or results from a
breach by the Trustee of any of its obligations under this Agreement, (ii) (x)
the Master Servicer, in the case of any such minimum tax, and (y) any party
hereto (other than the Trustee) to the extent any such other tax arises out of
or results from a breach by such other party of any of its obligations under
this Agreement or (iii) in all other cases, or in the event that any liable
party here fails to honor its obligations under the preceding clauses (i) or
(ii), any such tax will be paid first with amounts otherwise to be distributed
to the Class A-R Certificateholders , and second with amounts otherwise to be
distributed to all other Certificateholders in the following order of priority:
first, to the Class B Certificates (pro rata), second, to the Class M-8
Certificates (pro rata), third, to the Class M-7 Certificates (pro rata),
fourth, to the Class M-6 Certificates (pro rata), fifth, to the Class M-5
Certificates (pro rata)

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sixth, to the Class M-4 Certificates (pro rata), seventh, to the Class M-3
Certificates (pro rata), eighth, to the Class M-2 Certificates (pro rata),
ninth, to the Class M-1 Certificates (pro rata), and tenth, to the Class A-1
Certificates, Class A-2 and Class A-3 Certificates (pro rata). Notwithstanding
anything to the contrary contained herein, to the extent that such tax is
payable by the Class A-R Certificates, the Trustee is hereby authorized to
retain on any Distribution Date, from the Holders of the Class A-R Certificates
(and, if necessary, second, from the Holders of the all other Certificates in
the priority specified in the preceding sentence), funds otherwise distributable
to such Holders in an amount sufficient to pay such tax. The Trustee agrees to
promptly notify in writing the party liable for any such tax of the amount
thereof and the due date for the payment thereof.

                  The Trustee shall treat the rights of the Class A-1, Class
A-2, Class A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7, Class M-8 and Class B Certificateholders to receive payments
from the Carryover Reserve Fund as rights in an interest rate cap contract
written by the Cap Contract Counterparty with respect to the Net Rate Carryover
funded by the Cap Contracts and Excess Cashflow, in favor of the
Certificateholders (other than the Holders of the Class A-R, Class C and Class P
Certificates). Thus, each Certificate (other than the Class A-R, Class C and
Class P Certificates) shall be treated as representing ownership of not only a
REMIC III Regular Interest, but also ownership of an interest in an interest
rate cap contract. The value of the right to receive payments from the Carryover
Reserve Fund may be obtained from the Trustee upon request. For purposes of
determining the issue price of the REMIC II Regular Certificates, the Trustee
shall assume that the Class A-1 Cap Contract and Corridor Contract have values
of $10,000 and $662,000 respectively.

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                                   ARTICLE IX

                                   TERMINATION

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

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

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

         (c) The Master Servicer may assign the right to purchase all of the
Mortgage Loans and REO Properties remaining in the Trust Fund at the price
specified in (a) above to any third party.

         Section 9.02 FINAL DISTRIBUTION ON THE CERTIFICATES.

         If on any Determination Date, (i) the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to each
Certificateholder or (ii) the Trustee determines that a Class of Certificates
shall be retired after a final distribution on such Class, the Trustee shall
notify the related Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the related Certificates at
the Corporate Trust Office of the Trustee. If the Master Servicer elects to
terminate the Trust Fund pursuant to clause (a) of Section 9.01, at least 5 days
prior to the date

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<PAGE>

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

         Notice of any termination of the Trust Fund, specifying the
Distribution Date on which related Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to related Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on related
Certificates will be made upon presentation and surrender of such Certificates
at the office therein designated, (b) the amount of such final distribution, (c)
the location of the office or agency at which such presentation and surrender
must be made, and (d) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of such Certificates at the office therein specified.
The Master Servicer will give such notice to each Rating Agency at the time such
notice is given to the affected Certificateholders.

         In the event such notice is given, the Master Servicer shall cause all
funds in the Certificate Account to be remitted to the Trustee for deposit in
the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
related Certificates. Upon such final deposit and the receipt by the Trustee of
a Request for Release therefor, the Trustee shall promptly release to the Master
Servicer the Mortgage Files for the related Mortgage Loans.

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

         In the event that any affected Certificateholders shall not surrender
related Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their related
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all related Certificates shall not have been surrendered for
cancellation, the Class A-R Certificates shall be entitled to all unclaimed
funds and other assets that remain subject hereto.

         Section 9.03 ADDITIONAL TERMINATION REQUIREMENTS.

         (a) In the event the Master Servicer exercises its purchase option on
the Mortgage Loans, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with an
Opinion of Counsel, at the expense of the Master Servicer, to the effect that
the failure of the Trust Fund to comply with the

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<PAGE>

requirements of this Section 9.03 will not (i) result in the imposition of taxes
on "prohibited transactions" of a REMIC, or (ii) cause any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding:

                  (1) The Master Servicer shall establish a 90-day liquidation
period and notify the Trustee thereof, which shall in turn specify the first day
of such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer shall
prepare a plan of complete liquidation and shall otherwise satisfy all the
requirements of a qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel obtained at the
expense of the Master Servicer;

                  (2) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Master Servicer as
agent of the Trustee shall sell all of the assets of the Trust Fund for cash;
and

                  (3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Class A-R Certificateholders all cash on hand (other than
cash retained to meet claims) related to such Class of Certificates, and the
Trust Fund shall terminate at that time.

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

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

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                                   ARTICLE X

                            MISCELLANEOUS PROVISIONS

         Section 10.01 AMENDMENT.

         This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Seller and the Trustee, without the consent of any of the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions herein, to make such other provisions with respect to matters or
questions arising under this Agreement, as shall not be inconsistent with any
other provisions herein or to give effect to the expectations of the investors
if such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates, it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. Any amendment described above, made solely to conform
this Agreement to the Prospectus Supplement shall be deemed not to adversely
affect in any material respect the interests of the Certificateholders.
Notwithstanding the foregoing, no amendment that significantly changes the
permitted activities of the trust created by this Agreement may be made without
the consent of Certificateholders representing not less than 51% of the Voting
Rights of each Class of Certificates affected by such amendment.

         The Trustee, the Depositor, the Master Servicer and the Seller may also
at any time and from time to time amend this Agreement, without the consent of
the Certificateholders, to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of any REMIC created hereunder as a REMIC under the Code or to avoid or minimize
the risk of the imposition of any tax on the Trust Fund pursuant to the Code
that would be a claim against the Trust Fund at any time prior to the final
redemption of the Certificates, provided that the Trustee have been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee, to the
effect that such action is necessary or appropriate to maintain such
qualification or to avoid or minimize the risk of the imposition of such a tax.

         This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Seller and the Trustee and the Holders of each Class of
Certificates adversely affected thereby evidencing not less than a majority
Percentage Interest of the Voting Rights of such Class for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided that no such amendment pursuant to this paragraph shall
(i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing 66% or more of the Voting Rights of such Class, or (iii) reduce the
aforesaid percentages of

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Certificates the Holders of which are required to consent to any such amendment
without the consent of the Holders of all such Certificates then outstanding.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause the Trust Fund to fail
to qualify as a REMIC at any time that any Certificates are outstanding.

         Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.

         It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

         Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.

         Section 10.02 RECORDATION OF AGREEMENT; COUNTERPARTS.

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

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

         Section 10.03 GOVERNING LAW.

         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

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         Section 10.04 INTENTION OF PARTIES.

         It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement (within the
meaning of the Uniform Commercial Code of the State of New York) with respect to
all such assets and security interests and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant pursuant to the
terms of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.

         The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.

         Section 10.05 NOTICES.

         (a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:

                  (i) Any material change or amendment to this Agreement;

                  (ii) The occurrence of any Event of Default that has not been
         cured;

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

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

                  (v) The final payment to Certificateholders.

         In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:

                  (i) Each report to Certificateholders described in Section
         4.05;

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

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<PAGE>

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

         (b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when sent by facsimile transmission,
first class mail or delivered to (i) in the case of the Depositor, CWABS, Inc.,
4500 Park Granada, Calabasas, California 91302, Attention: Josh Adler, with a
copy to the same address, Attention: Legal Department; (ii) in the case of the
Seller, Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas, California
91302, Attention: Josh Adler, with a copy to the same address, Attention: Legal
Department, or such other address as may be hereafter furnished to the Depositor
and the Trustee by the Master Servicer in writing; (iii) in the case of the
Master Servicer, Countrywide Home Loans Servicing LP, 400 Countrywide Way, Simi
Valley, California 93065, Attention: Mark Wong or such other address as may be
hereafter furnished to the Depositor and the Trustee by the Master Servicer in
writing; (iv) in the case of the Trustee, The Bank of New York, 101 Barclay
Street, New York, New York 10286 Attention: Corporate Trust MBS Administration,
CWABS, Series 2004-BC5, or such other address as the Trustee may hereafter
furnish to the Depositor or the Master Servicer; and (v) in the case of the
Rating Agencies, (x) Moody's Investors Service, Inc., Residential Mortgage
Monitoring Department, 99 Church Street, New York, New York 10007, (y) Standard
& Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.,
Attention: Mortgage Surveillance Group, 55 Water Street, 41st Floor, New York,
New York 10041, and .Dominion Bond Rating Service, Inc., 55 Broadway, 15th
Floor, New York, NY 10006. Notices to Certificateholders shall be deemed given
when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register.

         Section 10.06 SEVERABILITY OF PROVISIONS.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         Section 10.07 ASSIGNMENT.

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

         Section 10.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of

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the parties hereto, nor shall anything herein set forth or contained in the
terms of the Certificates be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third party by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

         Section 10.09 INSPECTION AND AUDIT RIGHTS.

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

         Section 10.10 CERTIFICATES NON-ASSESSABLE AND FULLY PAID.

         It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

                                      133
<PAGE>

                                      * * *

                                      134
<PAGE>

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

                                         CWABS, INC.,
                                         as Depositor

                                         By: /s/ Ruben Avilez
                                             -----------------------------------
                                         Name:   Ruben Avilez
                                         Title:  Vice President

                                         COUNTRYWIDE HOME LOANS, INC.,
                                         as Seller

                                         By: /s/ Ruben Avilez
                                             -----------------------------------
                                         Name:   Ruben Avilez
                                         Title:  Vice President

                                         COUNTRYWIDE HOME LOANS
                                         SERVICING LP,
                                         as Master Servicer

                                         By: COUNTRYWIDE GP, INC.

                                         By: /s/ Ruben Avilez
                                             -----------------------------------
                                         Name:   Ruben Avilez
                                         Title:  Vice President

                                         THE BANK OF NEW YORK,
                                         not in its individual capacity,
                                         but solely as Trustee

                                         By: /s/ Maria Tokarz
                                             -----------------------------------
                                         Name:   Maria Tokarz
                                         Title:  Assistant Treasurer

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

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

<PAGE>

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

         On this 27th day of December, 2004, before me, a notary public in and
for said State, appeared Ruben Avilez, personally known to me on the basis of
satisfactory evidence to be a Vice President of Countrywide Home Loans, Inc.,
one of the corporations that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation and
acknowledged to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                       ______________________________
                                               Notary Public

[Notarial Seal]

<PAGE>

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

         On this 27th day of December, 2004, before me, a notary public in and
for said State, appeared Ruben Avilez, personally known to me on the basis of
satisfactory evidence to be a Vice President of Countrywide GP, Inc., the
general partner of Countrywide Home Loans Servicing LP, one of the organizations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of such corporation and acknowledged to me that such
corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                       ______________________________
                                               Notary Public

[Notarial Seal]

<PAGE>

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

         On this 27th day of December, 2004, before me, a notary public in and
for said State, appeared Ruben Avilez, personally known to me on the basis of
satisfactory evidence to be a Vice President of CWABS, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation and acknowledged to me that
such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                       ______________________________
                                               Notary Public

[Notarial Seal]

<PAGE>

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

         On this 27th day of December, 2004, before me, a notary public in and
for said State, appeared _______________, personally known to me on the basis of
satisfactory evidence to be a __________________ of The Bank of New York, a New
York banking corporation that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                       ______________________________
                                               Notary Public

[Notarial Seal]

<PAGE>

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

         On this 27th day of December, 2004, before me, a notary public in and
for said State, appeared _______________, personally known to me on the basis of
satisfactory evidence to be a __________________ of The Bank of New York, a New
York banking corporation that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                       ______________________________
                                               Notary Public

[Notarial Seal]

                                                                     Exhibit A-1

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

                [See appropriate documents delivered at closing]

                                       A-1

<PAGE>

                                                                     Exhibit A-2

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

                [See appropriate documents delivered at closing]

                                      A-2
<PAGE>

                                                                     Exhibit A-3

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

                [See appropriate documents delivered at closing]

                                      A-3
<PAGE>

                                                                     Exhibit A-4

                           Exhibit A-4 is a photocopy
                         of the Class M-1 Certificate as
                                   delivered.

                [See appropriate documents delivered at closing]

                                      A-4
<PAGE>
                                                                     Exhibit A-5

                           Exhibit A-5 is a photocopy
                         of the Class M-2 Certificate as
                                   delivered.

                [See appropriate documents delivered at closing]

                                      A-5
<PAGE>
                                                                     Exhibit A-6

                           Exhibit A-6 is a photocopy
                         of the Class M-3 Certificate as
                                   delivered.

                [See appropriate documents delivered at closing]

                                      A-6
<PAGE>
                                                                     Exhibit A-7

                           Exhibit A-7 is a photocopy
                          of the Class M-4 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      A-7
<PAGE>
                                                                     Exhibit A-8

                           Exhibit A-8 is a photocopy
                          of the Class M-5 Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      A-8
<PAGE>

                                                                     Exhibit A-9

                           Exhibit A-9 is a photocopy
                          of the Class M-6 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      A-9
<PAGE>
                                                                    Exhibit A-10

                           Exhibit A-10 is a photocopy
                          of the Class M-7 Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      A-10
<PAGE>
                                                                    Exhibit A-11

                           Exhibit A-11 is a photocopy
                          of the Class M-8 Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      A-11
<PAGE>
                                                                    Exhibit A-12

                           Exhibit A-12 is a photocopy
                           of the Class B Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      A-12
<PAGE>
                                                                       Exhibit B
                            Exhibit B is a photocopy
                           of the Class C Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                       B-1

<PAGE>
                                                                       Exhibit C

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

                [See appropriate documents delivered at closing]

                                       C-1

<PAGE>
                                                                       Exhibit D

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

                [See appropriate documents delivered at closing]

                                       D-1

<PAGE>
                                                                       Exhibit E

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

                [See appropriate documents delivered at closing]

                                       E-1

<PAGE>

                                                             Exhibit F-1 and F-2

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

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

                                   F-1 and F-2

<PAGE>

                                   EXHIBIT G-1

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Seller]

[Servicer]

         Re:      Pooling and Servicing Agreement, dated as of December 1, 2004,
                  among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
                  as Seller, Countrywide Home Loans Servicing LP, as Servicer
                  and The Bank of New York, as Trustee, relating to the
                  Asset-Backed Certificates, Series 2004-BC5
                  --------------------------------------------------------------

Gentlemen:

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

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

                                      G-1-1

<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                      The Bank of New York,
                                      as Trustee

                                      By:_______________________________________
                                          Name:
                                          Title:

                                     G-1-2
<PAGE>

                                   EXHIBIT G-2

                    FORM OF INTERIM CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Seller]

[Servicer]

         Re:      Pooling and Servicing Agreement, dated as of December 1, 2004,
                  among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
                  as Seller, Countrywide Home Loans Servicing LP, as Servicer
                  and The Bank of New York, as Trustee, relating to the
                  Asset-Backed Certificates, Series 2004-BC5
                  --------------------------------------------------------------

Gentlemen:

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

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

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

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

                                      G-2-1

                  BC5, CWABS, Inc., by The Bank of New York, a New York banking
                  corporation, as trustee under the Pooling and Servicing
                  Agreement, dated as of December 1, 2004, without recourse",
                  or, in the case of each Mortgage Loan with respect to property
                  located in the State of California that is not a MERS Mortgage
                  Loan, a duly executed assignment of the Mortgage in blank
                  (each such assignment, when duly and validly completed, to be
                  in recordable form and sufficient to effect the assignment of
                  and transfer to the assignee thereof, under the Mortgage to
                  which such assignment relates);

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

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

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

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

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

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.

                                     G-2-2
<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                        The Bank of New York,
                                             as Trustee

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                      G-2-3
<PAGE>

                                   EXHIBIT G-3

                      FORM OF DELAY DELIVERY CERTIFICATION

                                     [Date]

[Depositor]

[Seller]

[Servicer]

         Re:      Pooling and Servicing Agreement, dated as of December 1, 2004
                  (the "Pooling and Servicing Agreement"), among CWABS, Inc., as
                  Depositor, Countrywide Home Loans, Inc., as Seller,
                  Countrywide Home Loans Servicing LP, as Servicer and The Bank
                  of New York, as Trustee, relating to the Asset-Backed
                  Certificates, - Series 2004-BC5 Gentlemen:
                  --------------------------------------------------------------

         Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement. The
undersigned hereby certifies that as to each Delay Delivery Mortgage Loan listed
on the Schedule A attached hereto (other than any Mortgage Loan paid in full or
listed on Schedule B attached hereto) the Trustee has received:

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

         (ii)     in the case of each Mortgage Loan that is not a MERS Mortgage
                  Loan, a duly executed assignment of the Mortgage to
                  "Asset-Backed Certificates, Series 2004-BC5, CWABS, Inc., by
                  The Bank of New York, a New York banking corporation, as
                  trustee under the Pooling and Servicing Agreement, dated as of
                  December 1, 2004, without recourse", or, in the case of each
                  Mortgage Loan with respect to property located in the State of
                  California that is not a MERS Mortgage Loan, a duly executed
                  assignment of the Mortgage in blank (each such assignment,
                  when duly and validly completed, to be in recordable form and

                                     G-3-1
<PAGE>

                  sufficient to effect the assignment of and transfer to the
                  assignee thereof, under the Mortgage to which such assignment
                  relates).

         Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                   THE BANK OF NEW YORK,
                                   as Trustee

                                   By:______________________
                                   Name:
                                   Title:

                                     G-3-2

<PAGE>

                                   EXHIBIT G-4

                                   [RESERVED]

                                      G-4-1

<PAGE>

                                    EXHIBIT H

                     FORM OF FINAL CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Servicer]

[Seller]

         Re:      Pooling and Servicing Agreement, dated as of December 1, 2004
                  (the "Pooling and Servicing Agreement"), among CWABS, Inc., as
                  Depositor, Countrywide Home Loans, Inc., as Seller,
                  Countrywide Home Loans Servicing LP, as Servicer and The Bank
                  of New York, as Trustee, relating to the Asset-Backed
                  Certificates, Series 2004-BC5
                  -------------------------------------------------------------

Gentlemen:

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

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

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

                                       H-1

<PAGE>

         (iii)    in the case of each Mortgage Loan that is not a MERS Mortgage
                  Loan, a duly executed assignment of the Mortgage to
                  "Asset-Backed Certificates, Series 2004-BC5, CWABS, Inc., by
                  The Bank of New York, a New York banking corporation, as
                  trustee under the Pooling and Servicing Agreement, dated as of
                  December 1, 2004, without recourse", or, in the case of each
                  Mortgage Loan with respect to property located in the State of
                  California that is not a MERS Mortgage Loan, a duly executed
                  assignment of the Mortgage in blank (each such assignment,
                  when duly and validly completed, to be in recordable form and
                  sufficient to effect the assignment of and transfer to the
                  assignee thereof, under the Mortgage to which such assignment
                  relates);

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

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

         (vi)     the original or duplicate original lender's title policy or a
                  printout of the electronic equivalent and all riders thereto
                  or any one of an original title binder, an original
                  preliminary title report or an original title commitment, or a
                  copy thereof certified by the title company.

         If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.

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

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.

                                       H-2

<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                         The Bank of New York,
                                               as Trustee

                                         By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                       H-3

<PAGE>

                                    EXHIBIT I

                               TRANSFER AFFIDAVIT

STATE OF             )
                     )    ss.:
COUNTY OF            )

         The undersigned, being first duly sworn, deposes and says as follows:

         1. The undersigned is an officer of __________, the proposed transferee
of an Ownership Interest in a Class A-R Certificate (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement, dated as of December 1, 2004
(the "Agreement"), by and among CWABS, Inc., as depositor (the "Depositor"),
Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans Servicing LP, as
Servicer and The Bank of New York, as Trustee. Capitalized terms used, but not
defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to such
terms in the Agreement. The transferee has authorized the undersigned to make
this affidavit on behalf of the transferee.

         2. Either (a) the transferee is not an employee benefit plan that is
subject to Section 406 of ERISA or to section 4975 of the Internal Revenue Code
of 1986, nor is it acting on behalf of or with plan assets of any such plan, or
(b) the transferee has provided the opinion of counsel specified in Section
5.02(b) of the Agreement. The transferee is, as of the date hereof, and will be,
as of the date of the Transfer, a Permitted Transferee. The transferee is
acquiring its Ownership Interest in the Certificate for its own account.

         3. The transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent transferee furnished to such Person an affidavit that
such subsequent transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.

         4. The transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a

                                       I-1

<PAGE>

regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives and, except as
may be provided in Treasury Regulations, persons holding interests in
pass-through entities as a nominee for another Person.)

         5. The transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the transferee contemplated hereby null and void.

         6. The transferee agrees to require a Transfer Affidavit from any
Person to whom the transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
transferee is acting as nominee, trustee or agent, and the transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the transferee, the
transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit I to the Agreement (a "Transferor Certificate") to the
effect that such transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.

         7. The transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the Class
A-R Certificates.

         8. The transferee's taxpayer identification number is
__________________.

         9. The transferee is a U.S. Person as defined in Code section
7701(a)(30).

         10. The transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.

         11. The transferee has provided financial statements or other financial
information requested by the Transferor in connection with the transfer of the
Class A-R Certificates to permit the Transferor to assess the financial
capability of the transferee to pay such taxes.

                                      * * *

                                       I-2

<PAGE>

         IN WITNESS WHEREOF, the transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this __th day of _______, 20__.

                                             [NAME OF TRANSFEREE]

                                             By:____________________________
                                             Name:
                                             Title:

[Corporate Seal]

ATTEST:

-------------------------
[Assistant] Secretary

         Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the _____________________ of the transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
transferee.

         Subscribed and sworn before me this __th day of _______, 20__.

                                             ___________________________________
                                                         NOTARY PUBLIC

                                             My Commission expires the ___ day
                                             of                  , 20__.

                                       I-3

<PAGE>
                                                                       EXHIBIT 1

                               Certain Definitions

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

         "Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.

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

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

                                      I-4
<PAGE>

Section 5.02(c) of the Agreement
--------------------------------

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

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

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

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

                           (iv) Any attempted or purported Transfer of any
        Ownership Interest in a Class A-R Certificate in violation of the
        provisions of this Section 5.02(c) shall be absolutely null and void and
        shall vest no rights in the purported Transferee. If any purported
        transferee shall become a Holder of a Class A-R Certificate in violation
        of the provisions of this Section 5.02(c), then the last preceding
        Permitted Transferee shall be restored to all rights as Holder thereof
        retroactive to the date of registration of Transfer of such Class A-R
        Certificate. The Trustee shall be under no liability to any Person for
        any registration of Transfer of a Class A-R Certificate that is in fact
        not permitted by Section 5.02(b) and this Section 5.02(c) or for making
        any payments due on such Certificate to the Holder thereof or taking any
        other action with respect to such Holder under the provisions of this
        Agreement so long as the Transfer was registered after receipt of the
        related Transfer Affidavit, Transferor Certificate and either the Rule
        144A Letter or the Investment Letter. The Trustee shall be entitled but
        not obligated to recover from any Holder of a Class A-R Certificate that
        was in fact not a Permitted Transferee at the time it became a Holder
        or, at such subsequent time as it became other than a

                                      I-5
<PAGE>

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

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

The restrictions on Transfers of a Class A-R Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Class A-R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
shall not be an expense of the Trust Fund, the Trustee, the Seller or the Master
Servicer, to the effect that the elimination of such restrictions will not cause
any REMIC hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the Trust
Fund, a Certificateholder or another Person. Each Person holding or acquiring
any Ownership Interest in a Class A-R Certificate hereby consents to any
amendment of this Agreement that, based on an Opinion of Counsel furnished to
the Trustee, is reasonably necessary (a) to ensure that the record ownership of,
or any beneficial interest in, a Class A-R Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Class A-R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.

                                      I-6
<PAGE>

                                   EXHIBIT J-1

                       FORM OF TRANSFEROR CERTIFICATE FOR
                             CLASS A-R CERTIFICATES

                                                        Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed
                           Certificates, Series 2004-BC5
                           -----------------------------

Ladies and Gentlemen:

In connection with our disposition of the Class A-R Certificates, we certify
that we have no knowledge the Transferee is not a Permitted Transferee. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement, dated as of December 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Servicer and The Bank of New York, as
Trustee.

                                         Very truly yours,

                                         ----------------------------------
                                         Name of Transferor

                                         By: _______________________________
                                               Name:
                                               Title:

                                     J-1-1
<PAGE>

                                   EXHIBIT J-2

                       FORM OF TRANSFEROR CERTIFICATE FOR
                              PRIVATE CERTIFICATES

                                                             Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-BC5, Class [   ]
                           ----------------------------

Ladies and Gentlemen:

         In connection with our disposition of the above-captioned Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement, dated as of December 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Servicer and The Bank of New York, as
Trustee.

                                         Very truly yours,

                                         ----------------------------------
                                         Name of Transferor

                                         By: _______________________________
                                               Name:
                                               Title:

                                     J-2-1
<PAGE>

                                    EXHIBIT K

                    FORM OF INVESTMENT LETTER (NON-RULE 144A)

                                                           Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-BC5, Class [   ]

Ladies and Gentlemen:

         In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has provided the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement, (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration

                                      K-1
<PAGE>

statement under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.

         All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
December 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as Seller, Countrywide Home Loans Servicing LP, as Servicer and The Bank of New
York, as Trustee.

                                      Very truly yours,

                                      ----------------------------------
                                      Name of Transferee

                                      By: _______________________________
                                            Authorized Officer

                                       K-2
<PAGE>

                                    EXHIBIT L

                            FORM OF RULE 144A LETTER

                                                                 Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-BC5, Class [   ]
                           ------------------------   -

Ladies and Gentlemen:

         In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has provided the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement, (e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and the purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the

                                      L-1

<PAGE>

Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.

         All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
December 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as Seller, Countrywide Home Loans Servicing LP, as Servicer and The Bank of New
York, as Trustee.

                                      L-2
<PAGE>

                              ANNEX 1 TO EXHIBIT L
                              --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

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

                  2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis either at least $100,000 in securities
or, if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis
at least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.

                  ___      Corporation, etc. The Buyer is a corporation (other
                           than a bank, savings and loan association or similar
                           institution), Massachusetts or similar business
                           trust, partnership, or charitable organization
                           described in Section 501(c)(3) of the Internal
                           Revenue Code of 1986, as amended.

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

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

                                      L-3
<PAGE>

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

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

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

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

                  ___      Investment Advisor. The Buyer is an investment
                           advisor registered under the Investment Advisors Act
                           of 1940.

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

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

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

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction.

                                      L-4
<PAGE>

However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934, as amended.

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

                  6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                      __________________________________________
                                      Print Name of Buyer

                                      By:
                                         _______________________________________
                                      Name:
                                      Title:

                                      Date:
                                           _____________________________________

                                      L-5
<PAGE>

                                                            ANNEX 2 TO EXHIBIT L
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That are Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

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

                  2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.

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

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

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

                                      L-6
<PAGE>

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

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

                  6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.

                                    ____________________________________________
                                            Print Name of Buyer or Adviser

                                    By: ________________________________________

                                    Name:
                                    Title:

                                    IF AN ADVISER:

                                    ____________________________________________
                                                 Print Name of Buyer

                                    Date: ______________________________________

                                      L-7
<PAGE>

                                    EXHIBIT M

                               REQUEST FOR RELEASE
                                  (for Trustee)

Loan Information
         Name of Mortgagor:
                                             -----------------------------------
         Servicer
         Loan No.:
                                             -----------------------------------
Trustee
         Name:
                                             -----------------------------------
         Address:
                                             -----------------------------------
         Trustee
         Mortgage File No.:
                                             -----------------------------------

         The undersigned Servicer hereby acknowledges that it has received from
_______________________________________, as Trustee for the Holders of
Asset-Backed Certificates, Series 2004-BC5, the documents referred to below (the
"Documents"). All capitalized terms not otherwise defined in this Request for
Release shall have the meanings given them in the Pooling and Servicing
Agreement, dated as of December 1, 2004 (the "Pooling and Servicing Agreement"),
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Servicer and the Trustee.

( )      Mortgage Note dated ___________, ____, in the original principal sum of
         $________, made by __________________, payable to, or endorsed to the
         order of, the Trustee.

( )      Mortgage recorded on _________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         ________________, State of _______________ in book/reel/docket
         _______________ of official records at page/image _____________.

( )      Deed of Trust recorded on _________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         ________________, State of _______________ in book/reel/docket
         _______________ of official records at page/image _____________.

                                      M-1
<PAGE>

( )      Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
         _________________ as instrument no. __________ in the County Recorder's
         Office of the County of __________, State of _______________ in
         book/reel/docket _______________ of official records at page/image
         _____________.

( )      Other documents, including any amendments, assignments or other
         assumptions of the Mortgage Note or Mortgage.

( )      ----------------------------------------------

( )      ----------------------------------------------

( )      ----------------------------------------------

( )      ----------------------------------------------

         The undersigned Servicer hereby acknowledges and agrees as follows:

                  (1) The Servicer shall hold and retain possession of the
         Documents in trust for the benefit of the Trust Fund, solely for the
         purposes provided in the Agreement.

                  (2) The Servicer shall not cause or knowingly permit the
         Documents to become subject to, or encumbered by, any claim, liens,
         security interest, charges, writs of attachment or other impositions
         nor shall the Servicer assert or seek to assert any claims or rights of
         setoff to or against the Documents or any proceeds thereof.

                  (3) The Servicer shall return each and every Document
         previously requested from the Mortgage File to the Trustee when the
         need therefor no longer exists, unless the Mortgage Loan relating to
         the Documents has been liquidated and the proceeds thereof have been
         remitted to the Certificate Account and except as expressly provided in
         the Agreement.

                  (4) The Documents and any proceeds thereof, including any
         proceeds of proceeds, coming into the possession or control of the
         Servicer shall at all times be earmarked for the account of the Trust
         Fund, and the Servicer shall keep the Documents and any proceeds
         separate and distinct from all other property in the Servicer's
         possession, custody or control.

                                   [Servicer]

                                   By  _______________________________

                                   Its ________________________________

Date: _________________, ____

                                      M-2
<PAGE>

                                    EXHIBIT N

                               REQUEST FOR RELEASE
             [Mortgage Loans Paid in Full, Repurchased or Replaced]

                     OFFICER'S CERTIFICATE AND TRUST RECEIPT
                           ASSET-BACKED CERTIFICATES,
                                 Series 2004-BC5

__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER SIGNATURE,
AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]

LOAN NUMBER:_______________                 BORROWER'S NAME:_____________

COUNTY:____________________

[For Substitution or Repurchase Only: The Servicer certifies that [an] [no]
opinion is required by Section 2.05 [and is attached hereto].]

I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

____________      _____________________              DATED:____________

/ /      VICE PRESIDENT

                                      N-1
<PAGE>

/ /      ASSISTANT VICE PRESIDENT

                                      N-2
<PAGE>
                                                                       Exhibit O

                            Exhibit O is a photocopy
                           of the Depository Agreement
                                  as delivered.

                [see appropriate documents delivered at closing]

                                       O-1

<PAGE>

                                    EXHIBIT P

                       FORM OF MORTGAGE NOTE AND MORTGAGE

                             [Provide Upon Request]

                                       P-1

<PAGE>

                                    EXHIBIT Q

                                   [RESERVED]

                                       Q-1

<PAGE>
                                    EXHIBIT R

                         FORM OF CLASS A-1 CAP CONTRACT
                                       AND
                            FORM OF CORRIDOR CONTRACT

DATE:                      [_________], 2004

TO:                        Countrywide Home Loans, Inc.
ATTENTION:                 Mr. Jeff Staab/Kevin Doyle
TELEPHONE:                 818-225-3279
FACSIMILE:                 818-225-4099

FROM:                      Derivatives Documentation
TELEPHONE:                 212-272-2711
FACSIMILE:                 212-272-9857

SUBJECT:                   Fixed Income Derivatives Confirmation and Agreement

REFERENCE NUMBER:          [________]

The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Lehman Brothers Special Financing Inc. ("Lehman")
and Countrywide Home Loans, Inc., ("Counterparty"). This Agreement, which
evidences a complete and binding agreement between Lehman and Counterparty to
enter into the Transaction on the terms set forth below, constitutes a
"Confirmation" as referred to in the "ISDA Form Master Agreement" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.

1.       This Agreement is subject to and incorporates the 2000 ISDA DEFINITIONS
         (the "Definitions"), as published by the International Swaps and
         Derivatives Association, Inc. ("ISDA"). Lehman and Counterparty have
         agreed to enter into this Agreement in lieu of negotiating a Schedule
         to the 1992 ISDA Master Agreement (Multicurrency--Cross Border) form
         (the "ISDA Form Master Agreement"). An ISDA Form Master Agreement shall
         be deemed to have been executed by Lehman and Counterparty on the date
         we entered into the Transaction. All provisions contained in, or
         incorporated by reference to, the ISDA Form Master Agreement shall
         govern the Transaction referenced in this Confirmation except as
         expressly modified herein. In the event of any inconsistency between
         the provisions of this Agreement and the Definitions or the ISDA Form
         Master Agreement, this Agreement shall prevail for purposes of the
         Transaction.

                                      R-1
<PAGE>

2.     The terms of the particular Transaction to which this Confirmation
       relates are as follows:

       Type of Transaction:        Rate Cap
                                   (i)Notional Amount: With respect to
                                      any Calculation Period, the
                                      amount set forth for such period
                                      in the Schedule of Notional
                                      Amounts and Cap Rates attached
                                      hereto.

       Trade Date:                 [_________], 2004

       Effective Date:             [_________], 2004

       Termination Date:           [_______________], subject to adjustment in
                                   accordance with the Business Day Convention.

FIXED AMOUNT (PREMIUM):

       Fixed Rate Payer:           Counterparty

       Fixed Rate Payer

       Payment Date:  [_________], 2004

       Fixed Amount:  [_________]

FLOATING AMOUNTS:

       Floating Rate Payer:        Lehman

       Cap Rate I:                 As set forth in the Schedule of Notional
                                   Amounts and Cap Rates attached hereto.

       Floating Rate Payer
       Period                      End Dates The 25th calendar day of
                                   each month during the Term of this
                                   Transaction, commencing
                                   [_______________] and ending on the
                                   Termination Date, subject to
                                   adjustment in accordance with the
                                   Business Day Convention.

       Floating Rate Payer
       Payment Dates:              Early Payment shall be applicable. One
                                   Business Day preceding each Floating Rate
                                   Payer Period End Date.

       Floating Amount:            To be determined in accordance with the
                                   following

                                      R-2
<PAGE>

                                   formula: Greater of (i) 100 * (Floating Rate
                                   Option - Cap Rate I) * Notional Amount *
                                   Floating Rate Day Count Fraction; and (ii)
                                   zero

       Floating                    Rate Option: USD-LIBOR-BBA,
                                   provided, however, that if the
                                   Floating Rate determined from such
                                   Floating Rate Option for any
                                   Calculation Period is greater than
                                   Cap Rate II (set forth in the
                                   Schedule of Notional Amounts and Cap
                                   Rates Attached hereto) then the
                                   Floating Rate for such Calculation
                                   Period shall be deemed equal to Cap
                                   Rate II.

       Designated Maturity:        One month

       Floating Rate Day
       Count Fraction:             Actual/360

       Reset Dates:                The first day of each Calculation Period.

       Compounding:                Inapplicable

       Business Days for payments: New York and London

       Business Day Convention:    Modified Following

3.     Additional Provisions:      1) Each party hereto is hereby advised and
                                   acknowledges that the other party has engaged
                                   in (or refrained from engaging in)
                                   substantial financial transactions and has
                                   taken (or refrained from taking) other
                                   material actions in reliance upon the entry
                                   by the parties into the Transaction being
                                   entered into on the terms and conditions set
                                   forth herein and in the Confirmation relating
                                   to such Transaction, as applicable. This
                                   paragraph (1) shall be deemed repeated on the
                                   trade date of each Transaction.

4.     Provisions Deemed Incorporated in a Schedule to the Master Agreement:

       1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.

       2) TERMINATION PROVISIONS. For purposes of the Master Agreement:

       (a) "Specified Entity" is not applicable to Lehman or Counterparty for
any purpose.

                                       R-3
<PAGE>

       (b) "Specified Transaction" is not applicable to Lehman or Counterparty
for any purpose, and, accordingly, Section 5(a)(v) shall not apply to Lehman or
Counterparty.

       (c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to
Lehman or to Counterparty.

       (d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
not apply to Lehman or to Counterparty.

       (e) The "Automatic Early Termination" provision of Section 6(a) will not
apply to Lehman or to Counterparty.

       (f) Payments on Early Termination. For the purpose of Section 6(e) of
this Agreement:

           (i) Market Quotation will apply.

           (ii) The Second Method will apply.

       (g) "Termination Currency" means United States Dollars.

       3) Tax Representations. Not applicable

                                      R-4
<PAGE>

       4) LIMITATION ON EVENTS OF DEFAULT. Notwithstanding the terms of Sections
5 and 6 of this Agreement, if at any time and so long as the Counterparty has
satisfied in full all its payment obligations under Section 2(a)(i) of this
Agreement and has at the time no future payment obligations, whether absolute or
contingent, under such Section, then unless Lehman is required pursuant to
appropriate proceedings to return to the Counterparty or otherwise returns to
the Counterparty upon demand of the Counterparty any portion of any such
payment, (a) the occurrence of an event described in Section 5(a) of this
Agreement with respect to the Counterparty shall not constitute an Event of
Default or Potential Event of Default with respect to the Counterparty as
Defaulting Party and (b) Lehman shall be entitled to designate an Early
Termination Date pursuant to Section 6 of this Agreement only as a result of the
occurrence of a Termination Event set forth in either Section 5(b)(i) or
5(b)(ii) of this Agreement with respect to Lehman as the Affected Party or
Section 5(b)(iii) with respect to Lehman as the Burdened Party.

       5) DOCUMENTS TO BE DELIVERED. For the purpose of Section 4(a):

       (1) Tax forms, documents, or certificates to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED TO             FORM/DOCUMENT/                  DATE BY WHICH TO
DELIVER DOCUMENT              CERTIFICATE                     BE DELIVERED
<S>                           <C>                             <C>
Lehman and                    Any document required or        Promptly after the earlier of (i) reasonable
the Counterparty              reasonably requested to         demand by either party or (ii) learning that
                              allow the other party to        such form or document is required
                              make payments under this
                              Agreement without any
                              deduction or withholding for
                              or on the account of any Tax
                              or with such deduction or
                              withholding at a reduced
                              rate
</TABLE>

       (2) Other documents to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED TO        FORM/DOCUMENT/                  DATE BY WHICH TO              COVERED BY SECTION 3(D)
DELIVER DOCUMENT         CERTIFICATE                     BE DELIVERED                  REPRESENTATION
<S>                      <C>                             <C>                           <C>
Lehman and               Any documents required by       Upon the execution and        Yes
the Counterparty         the receiving party to          delivery of this Agreement
                         evidence the authority of       and such Confirmation
                         the delivering party or its
                         Credit Support Provider, if
                         any, for it
</TABLE>

                                       R-5
<PAGE>

<TABLE>
<CAPTION>
PARTY REQUIRED TO        FORM/DOCUMENT/                  DATE BY WHICH TO              COVERED BY SECTION 3(D)
DELIVER DOCUMENT         CERTIFICATE                     BE DELIVERED                  REPRESENTATION
<S>                      <C>                             <C>                           <C>
                         to execute and deliver this
                         Agreement, any Confirmation
                         , and any Credit Support
                         Documents to which it is a
                         party, and to evidence the
                         authority of the delivering
                         party or its Credit Support
                         Provider to perform its
                         obligations under this
                         Agreement, such
                         Confirmation and/or Credit
                         Support Document, as the
                         case may be

Lehman and               A certificate of an             Upon the execution and        Yes
the Counterparty         authorized officer of the       delivery of this Agreement
                         party, as to the incumbency     and such Confirmation
                         and authority of the
                         respective officers of the
                         party signing this Agreement,
                         any relevant Credit Support
                         Document, or any
                         Confirmation, as the case may
                         be
</TABLE>

6) MISCELLANEOUS. Miscellaneous

(a)    Address for Notices: For the purposes of Section 12(a) of this Agreement:

       Address for notices or communications to Lehman:

                  Address:      [_____________________]
                  Attention:    [_____________________]
                  Facsimile:    [_____________________]

       with a copy to:

                                      R-6

<PAGE>

                  Address:      [_____________________]
                  Attention:    [_____________________]
                  Facsimile:    [_____________________]

                  (For all purposes)

         Address for notices or communications to the Counterparty:

                  Address:      4500 Park Granada
                                Mail Stop CH-143
                                Calabasas, CA 91302
                  Attention:    Mr. Jeff Staab
                  Facsimile:    818-225-3898
                  Phone:        818-225-3279

(b)    Process Agent. For the purpose of Section 13(c):

                           Lehman appoints as its
                           Process Agent:            Not Applicable

                           The Counterparty appoints as its
                           Process Agent:            Not Applicable

(c)      Offices. The provisions of Section 10(a) will not apply to this
         Agreement; neither Lehman nor the Counterparty have any Offices other
         than as set forth in the Notices Section and Lehman agrees that, for
         purposes of Section 6(b) of this Agreement, it shall not in future have
         any Office other than one in the United States.

(d)      Multibranch Party. For the purpose of Section 10(c) of this Agreement:

         Lehman is not a Multibranch Party.

         The Counterparty is not a Multibranch Party.

(e)      Calculation Agent. The Calculation Agent is Lehman; provided, however,
         that if an Event of Default occurs with respect to Lehman, then the
         Counterparty shall be entitled to appoint a financial institution which
         would qualify as a Reference Market-maker to act as Calculation Agent.

(f)      Credit Support Document. Not applicable for either Lehman or the
         Counterparty.

(g)      Credit Support Provider.

                                      R-7
<PAGE>

         Lehman:  Not Applicable

         The Counterparty: Not Applicable

(h)      Governing Law. The parties to this Agreement hereby agree that the law
         of the State of New York shall govern their rights and duties in whole.

(i)    Severability. If any term, provision, covenant, or condition of this
       Agreement, or the application thereof to any party or circumstance, shall
       be held to be invalid or unenforceable (in whole or in part) for any
       reason, the remaining terms, provisions, covenants, and conditions hereof
       shall continue in full force and effect as if this Agreement had been
       executed with the invalid or unenforceable portion eliminated, so long as
       this Agreement as so modified continues to express, without material
       change, the original intentions of the parties as to the subject matter
       of this Agreement and the deletion of such portion of this Agreement will
       not substantially impair the respective benefits or expectations of the
       parties.

The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid or
enforceable term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.

(j)    Consent to Recording. Each party hereto consents to the monitoring or
       recording, at any time and from time to time, by the other party of any
       and all communications between officers or employees of the parties,
       waives any further notice of such monitoring or recording, and agrees to
       notify its officers and employees of such monitoring or recording.

(k)    Waiver of Jury Trial. Each party waives any right it may have to a trial
       by jury in respect of any Proceedings relating to this Agreement or any
       Credit Support Document.

(l)    Lehman will not unreasonably withhold or delay its consent to an
       assignment of this Agreement to any other third party.

(m)    Set-off. The provisions for Set-off set forth in Section 6(e) of the ISDA
       Form Master Agreement shall not apply for purposes of this Transaction.

7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, provided that Lehman shall not be deemed to have any
Affiliates for purposes of this Agreement, including for purposes of Section
6(b)(ii).

8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):

                                      R-8
<PAGE>

         "(g) Relationship Between Parties.

                     Each party represents to the other party on each date when
                     it enters into a Transaction that:--

                  (1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction (whether written or
oral), other than the representations expressly made in this Agreement or the
Confirmation in respect of that Transaction.

                  (2) Evaluation and Understanding.

                  (i) It has the capacity to evaluate (internally or through
independent professional advice) the Transaction and has made its own decision
to enter into the Transaction; and

                  (ii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms and conditions and to
assume those risks, financially and otherwise.

                  (3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its underlying
assets or liabilities or in connection with a line of business.

                  (4) Principal. It is entering into the Transaction as
principal, and not as agent or in any other capacity, fiduciary or otherwise."

       NEITHER THE BEAR STEARNS COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE
       OF THE BEAR STEARNS COMPANIES INC. OTHER THAN LEHMAN IS AN OBLIGOR OR A
       CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.

5.     Account Details and
       Settlement Information:              PAYMENTS TO LEHMAN:
                                            Please provide

                                            PAYMENTS TO COUNTERPARTY:
                                            Please provide

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

Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to Lehman a facsimile of the fully-executed
Confirmation to [__________]. For inquiries regarding

                                      R-9
<PAGE>

U.S. Transactions, please contact SUSAN DONLON by telephone at 212-272-2364. For
all other inquiries please contact DERIVATIVE DOCUMENTATION by telephone at
353-1-402-6233 Originals will be provided for your execution upon your request.

We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.

Very truly yours,

BEAR STEARNS FINANCIAL PRODUCTS INC.

By:    _______________________________
       Name:
       Title:

Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.

COUNTRYWIDE HOME LOANS, INC.

By:    _______________________________
       As authorized agent or officer for Countrywide Home Loans, Inc.
       Name:
       Title:

                                      R-10

<PAGE>
                                    EXHIBIT S

                           FORM OF NOVATION AGREEMENT

                       dated as of [________, 200_] among:

                       [_______] (the "REMAINING PARTY"),

                          [_______] (the "TRANSFEROR")

                                       AND

    The [_______], not in its individual capacity, but solely as trustee for
  [_______] (the "TRANSFEREE") pursuant to a Pooling and Servicing Agreement,
   dated and effective as of [_______, 200_], among [_______], as Depositor,
                 [_______], as seller (the "Seller"), [_______],
 as Servicer, and [_______], as trustee (the "POOLING AND SERVICING AGREEMENT").

The Transferor and the Remaining Party have entered into one or more
Transactions as identified in the attached Annex (each an "OLD TRANSACTION"),
each evidenced by a Confirmation (an "OLD CONFIRMATION") attached hereto,
subject to a 1992 ISDA Master Agreement (as defined below) dated as of [_______]
(the "OLD AGREEMENT").

With effect from and including [_______, 200_] (the "NOVATION DATE"), the
Transferor wishes to transfer by novation to the Transferee, and the Transferee
wishes to accept the transfer by novation of, all the rights, liabilities,
duties and obligations of the Transferor under and in respect of each Old
Transaction, with the effect that the Remaining Party and the Transferee enter
into a new transaction (each a "NEW TRANSACTION") between them having terms
identical to those of each Old Transaction, as more particularly described
below, but with the modifications provided for herein.

The Remaining Party wishes to accept the Transferee as its sole counterparty
with respect to the New Transactions.

The Transferor and the Remaining Party wish to have released and discharged, as
a result and to the extent of the transfer described above, their respective
obligations under and in respect of the Old Transactions.

Accordingly, the parties agree as follows: ---

1.   DEFINITIONS.

Terms defined in the ISDA Master Agreement (Multicurrency-Cross Border) as
published in 1992 by the International Swaps and Derivatives Association, Inc.,
(the "1992 ISDA MASTER AGREEMENT") are used herein as so defined, unless
otherwise provided herein.

2.   TRANSFER, RELEASE, DISCHARGE AND UNDERTAKINGS.

With effect from and including the Novation Date and in consideration of the
mutual representations, warranties and covenants contained in this Novation
Agreement and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged by each of the parties):

       (a)    the Remaining Party and the Transferor are each released and
              discharged from further obligations to each other with respect to
              each Old Transaction and their respective rights against each
              other thereunder are cancelled, provided that such release and
              discharge shall not affect any rights, liabilities or obligations
              of the Remaining Party or the Transferor with respect to payments
              or other obligations due and payable or due to be performed on or
              prior to the Novation Date, and all such payments and obligations
              shall be paid or performed by the Remaining Party or the
              Transferor in accordance with

                                      S-1
<PAGE>

              the terms of the Old Transactions; provided further, for the
              avoidance of doubt, the Transferee shall not be liable with
              respect to payments or other obligations due and payable or due to
              be performed under the Old Transactions on or prior to the
              Novation Date.

       (b)    in respect of each New Transaction, the Transferee (pursuant to
              the Pooling and Servicing Agreement) and the Remaining Party each
              undertake duties and obligations towards the other and acquire
              rights against each other identical in their terms to each
              corresponding Old Transaction (and, for the avoidance of doubt, as
              if the Transferee were the Transferor and with the Remaining Party
              remaining the Remaining Party, save for any rights, liabilities or
              obligations of the Remaining Party or the Transferor with respect
              to payments or other obligations due and payable or due to be
              performed on or prior to the Novation Date); and

       (c)    each New Transaction shall be governed by and form part of an
              agreement in the form of a 1992 ISDA Master Agreement between the
              Remaining Party and Transferee as if the parties had executed on
              [_______, 2004_], a 1992 ISDA Master Agreement (but without any
              Schedule except for (i) the election of the laws of the State of
              New York (without reference to choice of law doctrine) as the
              governing law and USD as Termination Currency and (ii) the items
              specified in Section 10 below (the "NEW AGREEMENT")), and the
              relevant Old Confirmation, as amended pursuant to this Novation
              Agreement, shall be deemed to be a Confirmation between the
              Remaining Party and the Transferee.

3.   REPRESENTATIONS AND WARRANTIES.

       (a)    On the date of this Novation Agreement:

              (i)    Each of the parties makes to each of the other parties
                     those representations and warranties set forth in Section
                     3(a) of the 1992 ISDA Master Agreement with references in
                     such Section to "this Agreement" or "any Credit Support
                     Document" being deemed references to this Novation
                     Agreement alone.

              (ii)   The Remaining Party and the Transferor each makes to the
                     other and the Remaining Party and the Transferee each makes
                     to the other the representation set forth in Section 3(b)
                     of the 1992 ISDA Master Agreement, in the former case with
                     respect to the Old Agreement, and in the latter case with
                     respect to the New Agreement and taking into account the
                     parties entering into and performing their obligations
                     under this Novation Agreement.

              (iii)  Each of the Transferor and the Remaining Party represents
                     and warrants to each other and to the Transferee that :

                     (A)    it has made no prior transfer (whether by way of
                            security or otherwise) of the Old Agreement or any
                            interest or obligation in or under the Old Agreement
                            or in respect of any Old Transaction; and

                     (B)    as of the Novation Date, all obligations of the
                            Transferor and the Remaining Party under each Old
                            Transaction required to be performed on or before
                            the Novation Date have been fulfilled.

       (b)    Subject to its obligations under the Pooling and Servicing
              Agreement, the Transferor makes no representation or warranty and
              does not assume any responsibility with respect to the legality,
              validity, effectiveness, adequacy or enforceability of any New
              Transaction or the New Agreement or any documents relating thereto
              and assumes no responsibility for the condition, financial or
              otherwise, of the Remaining Party, the Transferee or any other
              person or for the performance and observance by the Remaining
              Party, the Transferee or any other person of any of its
              obligations under any New Transaction or the New Agreement or any
              document relating thereto and any and all such conditions and
              warranties, whether express or implied by law or otherwise, are
              hereby excluded.

                                      S-2
<PAGE>

4.   COUNTERPARTS.

This Novation Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by facsimile
transmission), each of which will be deemed an original.

5.   COSTS AND EXPENSES.

The parties will each pay their own costs and expenses (including legal fees)
incurred in connection with this Novation Agreement and as a result of the
negotiation, preparation and execution of this Novation Agreement.

6.   AMENDMENTS.

No amendment, modification or waiver in respect of this Novation Agreement will
be effective unless in writing (including a writing evidenced by a facsimile
transmission) and executed by each of the parties or confirmed by an exchange of
telexes or electronic messages on an electronic messaging system.

7.   GOVERNING LAW; JURISDICTION.

This Novation Agreement will be governed by and construed in accordance with the
laws of the State of New York without reference to the conflict of laws
provisions thereof.

The terms of Section 13(b) of the 1992 ISDA Master Agreement shall apply to this
Novation Agreement with references in such Section to "this Agreement" being
deemed references to this Novation Agreement alone.

8.   NOTICES.

For the purposes of this Novation Agreement and Section 12(a) of the New
Agreement, the addresses for notices or communications are as follows: (i) in
the case of Transferor, as specified in the Old Confirmations, or such other
address as may be hereafter furnished in writing to Transferee and Remaining
Party; (ii) in the case of Transferee, [_______], or such other address as may
be hereafter furnished in writing to Transferor and Remaining Party; and (iii)
in the case of Remaining Party, as specified in the Old Confirmations, or such
other address as may be hereafter furnished in writing to Transferor and
Transferee.

9.   PAYMENTS.

Any payments remitted by Remaining Party under the New Transaction shall be made
by wire transfer according to the following instructions:

                                    [_______]

10.  PROVISIONS DEEMED INCORPORATED INTO THE NEW AGREEMENT.

       (a)    Limitation on Events of Default. Notwithstanding the terms of
              Sections 5 and 6 of the New Agreement, if at any time and so long
              as the Transferee has satisfied in full all its payment
              obligations under Section 2(a)(i) of the New Agreement and has at
              the time no future payment obligations, whether absolute or
              contingent, under such Section, then unless Remaining Party is
              required pursuant to appropriate proceedings to return to the
              Transferee or otherwise returns to the Transferee upon demand of
              the Transferee any portion of any such payment: (i) the occurrence
              of an event described in Section 5(a) (other than Sections
              5(a)(vii)(1), 5(a)(vii)(3), 5(a)(vii)(4), 5(a)(vii)(5),
              5(a)(vii)(6), 5(a)(vii)(7) or 5(a)(vii)(8)) of the New Agreement
              with respect to the Transferee shall not constitute an Event of
              Default or Potential Event of Default with respect to the
              Transferee as Defaulting Party; and (ii) Remaining Party shall be
              entitled to designate an Early Termination Date pursuant to
              Section 6 of the New Agreement only as a result of the occurrence
              of a Termination Event set forth in either Section 5(b)(i) or
              5(b)(ii) of the New Agreement with respect to Remaining Party as
              the Affected Party or Section 5(b)(iii) of the New Agreement with
              respect to Remaining Party as the Burdened Party.

                                      S-3
<PAGE>

       (b)    Non-Petition. Remaining Party hereby irrevocably and
              unconditionally agrees that it will not institute against, or join
              any other person in instituting against, the Transferee, any
              bankruptcy, reorganization, arrangement, insolvency, or similar
              proceeding under the laws of the United States or any other
              jurisdiction for the non-payment of any amount due hereunder or
              any other reason until the payment in full of the Certificates (as
              defined in the Pooling and Servicing Agreement) and the expiration
              of a period of one year plus one day (or, if longer, the
              applicable preference period) following such payment. Nothing
              herein shall prevent Remaining Party from participating in any
              such proceeding once commenced.

       (c)    Additional Provisions. Notwithstanding the terms of Sections 5 and
              6 of the New Agreement, the provisions of Sections 5(a)(ii),
              5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vi) and 5(b)(iv) shall not
              apply to Remaining Party or the Transferee.

       (d)    No Set-off. Notwithstanding any provision of this Novation
              Agreement or any other existing or future agreement, each party
              irrevocably waives any and all rights it may have to set off, net,
              recoup or otherwise withhold or suspend or condition payment or
              performance of any obligation between it and the other party
              hereunder against any obligation between it and the other party
              under any other agreements. The provisions for Set-off set forth
              in Section 6(e) of the New Agreement shall not apply for purposes
              of the New Transactions.

       (e)    Section 3 of the New Agreement is hereby amended by adding at the
              end thereof the following subsection (g):

              "(g) Relationship Between Parties.

                      Each of Transferor, Transferee and Remaining Party
                      represents to the other on each date when it enters into a
                      Transaction that:

                      (1)    Nonreliance. Each party represents to the other
                             party (which representation will be deemed to be
                             repeated by each party on each date on which a
                             Transaction is entered into or amended, extended or
                             otherwise modified) that it is acting for its own
                             account, and has made its own independent decisions
                             to enter into the New Agreement and any Transaction
                             thereunder and as to whether the New Agreement and
                             any Transaction thereunder is appropriate or proper
                             for it based on its own judgment and upon advice
                             from such advisors as it has deemed necessary. It
                             is not relying on any communication (written or
                             oral) of the other party as investment advice or as
                             a recommendation to enter into the New Agreement or
                             any Transaction thereunder, it being understood
                             that information and explanations related to the
                             terms and conditions of the New Agreement and any
                             Transaction thereunder shall not be considered
                             investment advice or a recommendation to enter into
                             the New Agreement or any Transaction thereunder. No
                             communication (written or oral) received from the
                             other party shall be deemed to be an assurance or
                             guarantee as to the expected results of any
                             Transaction thereunder.

                       (2)   Purpose. Remaining Party is entering into the New
                             Transactions for the purposes of managing its
                             borrowings or investments, hedging its underlying
                             assets or liabilities or in connection with a line
                             of business (including financial intermediation
                             services) or the financing of its business. The
                             Transferee is entering into the New Transactions
                             pursuant to the Pooling and Servicing Agreement.

                       (3)   Principal. The other party is not acting as an
                             agent, fiduciary or advisor for it in respect of
                             the New Transactions.

                       (4)   Eligible Contract Participant. It constitutes an
                             "eligible contract participant" as such term is
                             defined in Section 1(a)(12) of the Commodity
                             Exchange Act, as amended."

                                      S-4
<PAGE>

                       (5)   Evaluation and Understanding. Each party represents
                             to the other party (which representation will be
                             deemed to be repeated by each party on each date on
                             which a Transaction is entered into or amended,
                             extended or otherwise modified) that it is capable
                             of evaluating and understanding (on its own behalf
                             or through independent professional advice), and
                             understands and accepts, the terms, conditions and
                             risks of that Transaction. It is also capable of
                             assuming, and assumes, the financial and other
                             risks of that Transaction.

       (f)    Substitution Event. If at any time the long-term senior unsecured
              deposit ratings of Remaining Party shall be rated below "BBB+" by
              Standard & Poor's Ratings Service, below "Baa1" by Moody's
              Investors Service, Inc. and below "BBB+" by Fitch, Inc., and
              within ten (10) Local Business Days following the publication
              date(s) of such ratings, Remaining Party, using its good faith
              efforts, fails to find an entity acceptable to the Transferee, as
              directed in writing by the Servicer, which acceptance shall not be
              unreasonably withheld or delayed, to whom all of Remaining Party's
              interests and obligations under this Agreement shall be assigned
              at no cost to the Transferee, and following which Remaining Party
              shall be released from all further obligations under this
              Agreement, then, at the option of the Transferee, such failure
              shall constitute an Additional Termination Event with Remaining
              Party as the Affected Party.

       (g)    Amendment. Section 9(b) of the New Agreement is hereby amended by
              adding the following at the end of such Section: "No transfer,
              supplement, assignment, amendment, modification or waiver in
              respect of the New Agreement will be effective without the prior
              written consent of Standard & Poor's Ratings Group, Moody's
              Investors Service, Inc. and Fitch, Inc."

       (h)    Consent to Recording. The parties agree that each may tape (and/or
              electronically) record all telephonic conversations between
              marketing and trading personnel in connection herewith and/or the
              New Agreement (and/or any Transaction thereunder) and that any
              such recordings may be submitted in evidence in any proceedings
              relating hereto and/or the New Agreement (and/or any Transaction).

       (i)    Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND
              ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
              ARISING OUT OF OR RELATING TO THE NEW AGREEMENT OR ANY TRANSACTION
              CONTEMPLATED THEREUNDER.

       (j)    Multibranch Party. For purpose of Section 10 of the New Agreement:
              (i) Remaining Party is a Multibranch Party, and may act through
              its Charlotte, North Carolina, Chicago, Illinois, San Francisco,
              California, New York, New York or London, England Office or such
              other Office as may be agreed to by the parties in connection with
              a Transaction; and (ii) Transferee is not a Multibranch Party.

       (k)    Amendments to Old Confirmations.

              (i)   The term "Floating Amount I" on page two of each Old
                    Confirmation is amended by deleting "I".

              (ii)  The term "Cap Rate I" on page two and Schedule B of each Old
                    Confirmation is amended by deleting "I".

              (iii) The definition of "Floating Rate Option" on page two of each
                    Old Confirmation under the caption "Floating Amount" is
                    amended by inserting at the end of "USD-LIBOR-BBA" the
                    following:

                    "provided, however, that if USD-LIBOR-BBA for any
                    Calculation Period is greater than the Ceiling Rate (as set
                    forth in Schedule B attached hereto) then the USD-LIBOR-BBA
                    for such Calculation Period shall be deemed to be the
                    Ceiling Rate"

                                      S-5
<PAGE>

              (iv)  The term "Floating Amount II" and all terms related to the
                    term "Floating Amount II" (not including Calculation Agent)
                    are deleted in their entirety from each Old Confirmation.

              (v)   The term "Cap Rate II" on Schedule B of each Old
                    Confirmation is amended by deleting it in its entirety and
                    inserting in its place "Ceiling Rate."

       (l)    Consent and Acknowledgment of Remaining Party. Remaining Party
              hereby consents to the assignment and delegation by Transferor to
              Transferee of all of Transferor's rights, duties, and obligations
              under the Old Transactions pursuant to this Novation Agreement. In
              addition, Remaining Party hereby acknowledges that the
              responsibilities of Transferee under the New Transactions will be
              performed on its behalf by [_______], as Servicer under the
              Pooling and Servicing Agreement.

       (m)    Limitation on Liability. Transferee and Remaining Party agree that
              the sole recourse in respect of the obligations of Transferee
              under each New Transaction shall be to the Trust Fund (as defined
              in the Pooling and Servicing Agreement). Transferor and Remaining
              Party agree that: (i) Transferee is entering into this Novation
              Agreement solely in its capacity as trustee under the Pooling and
              Servicing Agreement (and not in its individual capacity); and (ii)
              in no case shall Transferee (or any person acting as successor
              trustee under the Pooling and Servicing Agreement), be personally
              liable for or on account of any of the statements,
              representations, warranties, covenants or obligations stated to be
              those of Transferee under the terms of each New Transaction, all
              such liability, if any, being expressly waived by Transferor and
              Remaining Party and any person claiming by, through or under
              either such party. Transferor hereby agrees to indemnify and hold
              harmless the Trustee with respect to any and all claims under the
              Old Transactions.

              Notwithstanding the foregoing (or anything to the contrary in this
              Novation Agreement), [_______] shall be liable for its own
              negligence, willful misconduct, bad faith and/or fraud.

                                      S-6
<PAGE>

         IN WITNESS WHEREOF the parties have executed this Novation Agreement on
the respective dates specified below with effect from and including the Novation
Date.

[-------]                                  [-------]

By:  ..................................    By:  ...............................
        Name:                                      Name:
        Title:                                     Title:
        Date: _________, 2004                      Date: _________, 2004

The [_______], not in its individual capacity, but solely as trustee for
[_______].

By:  ..................................
       Name:
       Title:
       Date:

                                      S-7

<PAGE>

                                      ANNEX

                  Transactions between [_______] and [_______]

             Trade Date [_______],[_______] Reference No. [_______]
             Trade Date [_______],[_______] Reference No. [_______]
             Trade Date [_______],[_______] Reference No. [_______]

                                      S-8

<PAGE>

                                OLD CONFIRMATIONS

                                      S-9

<PAGE>

                                    EXHIBIT T

                OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS

                           ASSET-BACKED CERTIFICATES,
                                 Series 2004-BC5

                                     [Date]

Via Facsimile

The Bank of New York,
         as Trustee
101 Barclay St., 8W
New York, New York  10286

Dear Sir or Madam:

                  Reference is made to the Pooling and Servicing Agreement,
dated as of December 1, 2004, (the "Pooling and Servicing Agreement") among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller, Countrywide
Home Loans Servicing LP, as Servicer and The Bank of New York, as Trustee.
Capitalized terms used herein shall have the meanings ascribed to such terms in
the Pooling and Servicing Agreement.

                  __________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:

                  With respect to the Distribution Date in _________ 20[ ] and
each Mortgage Loan set forth in the attached schedule:

                  1. A Principal Prepayment in full or in part was received
during the related Prepayment Period;

                  2. Any Prepayment Charge due under the terms of the Mortgage
Note with respect to such Principal Prepayment was or was not, as indicated on
the attached schedule using "Yes" or "No", received from the Mortgagor and
deposited in the Certificate Account;

                  3. As to each Mortgage Loan set forth on the attached schedule
for which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Servicer, such waiver was, as indicated
on the attached schedule, based upon:

                                      T-1
<PAGE>

                           (i) the Servicer's determination that such waiver
         would maximize recovery of Liquidation Proceeds for such Mortgage Loan,
         taking into account the value of such Prepayment Charge, or

                           (ii)(A) the enforceability thereof is limited (1) by
         bankruptcy, insolvency, moratorium, receivership, or other similar law
         relating to creditors' rights generally or (2) due to acceleration in
         connection with a foreclosure or other involuntary payment, or (B) the
         enforceability is otherwise limited or prohibited by applicable law;
         and

                  4. We certify that all amounts due in connection with the
waiver of a Prepayment Charge inconsistent with clause 3 above which are
required to be deposited by the Servicer pursuant to Section 3.20 of the Pooling
and Servicing Agreement, have been or will be so deposited.

                                         COUNTRYWIDE HOME LOANS SERVICING LP,
                                           as Servicer

                                         By:  COUNTRYWIDE GP, INC.

                                         By:
                                            ------------------------------------
                                           Name:
                                           Title:

                                      T-2

<PAGE>

         SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
                      DURING THE RELATED PREPAYMENT PERIOD

--------------------------------------------------------------------------------
LOAN NUMBER             CLAUSE 2:  YES/NO         CLAUSE 3:  (I) OR (II)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

                                      T-3
<PAGE>

         APPENDIX U: Standard & Poor's Predatory Lending Categorization

         Standard & Poor's has categorized loans governed by anti-predatory
lending laws in the Jurisdictions listed below into three categories based upon
a combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan Category because they included
thresholds and tests that are typical of what is generally considered High Cost
by the industry.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                 STANDARD & POOR'S HIGH-COST LOAN CATEGORIZATION

-----------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>
STATE/JURISDICTION                                   CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
-----------------------------------------------------------------------------------------------------------------------
Arkansas                                             High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Cleveland Heights, Ohio                              Covered Loan
-----------------------------------------------------------------------------------------------------------------------
Colorado                                             Covered Loan
-----------------------------------------------------------------------------------------------------------------------
Connecticut                                          High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
District of Columbia                                 Covered Loan
-----------------------------------------------------------------------------------------------------------------------
Florida                                              High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - March 6, 2003)               High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Georgia as amended (March 7, 2003 - current)         High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
HOEPA Section 32                                     High Cost Loan
-----------------------------------------------------------------------------------------------------------------------
Illinois                                             High Risk Home Loan
-----------------------------------------------------------------------------------------------------------------------
Kansas                                               High Loan-to-Value Consumer Loans and High APR Consumer Loans
-----------------------------------------------------------------------------------------------------------------------
Kentucky                                             High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Los Angeles, Calif.                                  High Cost Refinance Home Loan
-----------------------------------------------------------------------------------------------------------------------
Maine                                                High Rate High Fee Mortgage
-----------------------------------------------------------------------------------------------------------------------
Massachusetts                                        High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Nevada                                               Home Loan
-----------------------------------------------------------------------------------------------------------------------
New Jersey                                           High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
New York                                             High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
New Mexico                                           High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
North Carolina                                       High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Oakland, Calif.                                      High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Ohio                                                 Covered Loan
-----------------------------------------------------------------------------------------------------------------------
Oklahoma                                             Subsection 10 Mortgage
-----------------------------------------------------------------------------------------------------------------------
South Carolina                                       High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
West Virginia                                        West Virginia Mortgage Loan Act Loan
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      U-1
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                  STANDARD & POOR'S COVERED LOAN CATEGORIZATION

------------------------------------------------------------------------------------------------------------------------
STATE/JURISDICTION                                   CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>
Georgia (Oct. 1, 2002-March 6, 2003)                 Covered Loan
------------------------------------------------------------------------------------------------------------------------
New Jersey                                           Covered Home Loan
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
                   STANDARD & POOR'S HOME LOAN CATEGORIZATION
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
STATE/JURISDICTION                                   CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>
Georgia (Oct. 1, 2002-March 6, 2003)                 Home Loan
------------------------------------------------------------------------------------------------------------------------
New Jersey                                           Home Loan
------------------------------------------------------------------------------------------------------------------------
New Mexico                                           Home Loan
------------------------------------------------------------------------------------------------------------------------
North Carolina                                       Consumer Home Loan
------------------------------------------------------------------------------------------------------------------------
Oakland, Calif.                                      Home Loan
------------------------------------------------------------------------------------------------------------------------
South Carolina                                       Consumer Home Loan
------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      U-2

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