Document:

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 June 1, 2004

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

                               CWL 2004-ECC1 TRUST

                                     Issuer

                   ASSET-BACKED CERTIFICATES, SERIES 2004-ECC1

<PAGE>

<TABLE>
<CAPTION>
                                                 Table of Contents

<S>                                                                                                              <C>
ARTICLE I

DEFINITIONS.......................................................................................................4
         Section 1.01      Defined Terms..........................................................................4

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES...................................................................................61
         Section 2.01      Conveyance of Mortgage Loans..........................................................61
Acceptance of the Mortgage Loans.................................................................................68
         Section 2.03      Representations, Warranties and Covenants of the Master Servicer and the
                           Seller................................................................................71
         Section 2.04      Representations and Warranties of the Depositor.......................................84
         Section 2.05      Delivery of Opinion of Counsel in Connection with Substitutions and
                           Repurchases...........................................................................86
         Section 2.06      Authentication and Delivery of Certificates...........................................86
         Section 2.07      Covenants of the Master Servicer......................................................87

ARTICLE III

ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS................................................................................................88
         Section 3.01      Master Servicer to Service Mortgage Loans.............................................88
         Section 3.02      Subservicing; Enforcement of the Obligations of Master Servicer.......................89
         Section 3.03      Rights of the Depositor, the Seller and the Trustee in Respect of the Master
                           Servicer..............................................................................90
         Section 3.04      Trustee to Act as Master Servicer.....................................................90
         Section 3.05      Collection of Mortgage Loan Payments; Certificate Account; Distribution
                           Account; Pre-Funding Account; Seller Shortfall Interest Requirement...................90
         Section 3.06      Collection of Taxes, Assessments and Similar Items; Escrow Accounts
                            .....................................................................................94
         Section 3.07      Access to Certain Documentation and Information Regarding the Mortgage
                           Loans.................................................................................95
         Section 3.08      Permitted Withdrawals from the Certificate Account, Distribution Account
                           and the Carryover Reserve Fund........................................................95
         Section 3.09      [Reserved.]...........................................................................98
         Section 3.10      Maintenance of Hazard Insurance.......................................................98
         Section 3.11      Enforcement of Due-On-Sale Clauses; Assumption Agreements.............................98

                                                         i

<PAGE>

         Section 3.12      Realization Upon Defaulted Mortgage Loans; Determination of Excess
                           Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans
                            ....................................................................................100
Trustee to Cooperate; Release of Mortgage Files.................................................................103
         Section 3.14      Documents, Records and Funds in Possession of Master Servicer to be Held
                           for the Trustee......................................................................104
         Section 3.15      Servicing Compensation...............................................................104
         Section 3.16      Access to Certain Documentation......................................................105
         Section 3.17      Annual Statement as to Compliance....................................................105
         Section 3.18      Annual Independent Public Accountants' Servicing Statement; Financial
                           Statements...........................................................................105
         Section 3.19      The Corridor Contracts...............................................................106
         Section 3.20      Prepayment Charges...................................................................107

ARTICLE IV

DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER.................................................................................108
         Section 4.01      Advances.............................................................................108
         Section 4.02      Reduction of Servicing Compensation in Connection with Prepayment
                           Interest Shortfalls..................................................................109
         Section 4.03      [Reserved]...........................................................................109
         Section 4.04      Distributions........................................................................109
         Section 4.05      Monthly Statements to Certificateholders.............................................116
         Section 4.06      [Reserved]...........................................................................119
         Section 4.07      [Reserved]...........................................................................119
         Section 4.08      Carryover Reserve Fund...............................................................119
         Section 4.09      Distributions on the REMIC I Regular Interests.......................................120
         Section 4.10      [Reserved]...........................................................................124
         Section 4.11      Allocation of Realized Losses on the REMIC II Regular Interests......................124
         Section 4.12      The Class P Certificates.............................................................125

ARTICLE V

THE CERTIFICATES................................................................................................126
         Section 5.01      The Certificates.....................................................................126
         Section 5.02      Certificate Register; Registration of Transfer and Exchange of Certificates
                            ....................................................................................127
         Section 5.03      Mutilated, Destroyed, Lost or Stolen Certificates....................................131
         Section 5.04      Persons Deemed Owners................................................................131
         Section 5.05      Access to List of Certificateholders' Names and Addresses............................131
         Section 5.06      Book-Entry Certificates..............................................................132
         Section 5.07      Notices to Depository................................................................133

                                                        ii

<PAGE>

         Section 5.08      Definitive Certificates..............................................................133
         Section 5.09      Maintenance of Office or Agency......................................................134

ARTICLE VI

THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER...............................................................135
         Section 6.01      Respective Liabilities of the Depositor, the Master Servicer and the Seller
                            ....................................................................................135
         Section 6.02      Merger or Consolidation of the Depositor, the Master Servicer or the Seller
                            ....................................................................................135
         Section 6.03      Limitation on Liability of the Depositor, the Seller, the Master Servicer and
                           Others...............................................................................135
         Section 6.04      Limitation on Resignation of Master Servicer.........................................136
         Section 6.05      Errors and Omissions Insurance; Fidelity Bonds.......................................136

ARTICLE VII

DEFAULT; TERMINATION OF MASTER SERVICER.........................................................................138
         Section 7.01      Events of Default....................................................................138
         Section 7.02      Trustee to Act; Appointment of Successor.............................................139
         Section 7.03      Notification to Certificateholders...................................................141

ARTICLE VIII

CONCERNING THE TRUSTEE..........................................................................................142
         Section 8.01      Duties of Trustee....................................................................142
         Section 8.02      Certain Matters Affecting the Trustee................................................143
         Section 8.03      Trustee Not Liable for Mortgage Loans................................................144
         Section 8.04      Trustee May Own Certificates.........................................................145
         Section 8.05      Master Servicer to Pay Trustee's Fees and Expenses...................................145
         Section 8.06      Eligibility Requirements for Trustee.................................................145
         Section 8.07      Resignation and Removal of Trustee...................................................146
         Section 8.08      Successor Trustee....................................................................147
         Section 8.09      Merger or Consolidation of Trustee...................................................147
         Section 8.10      Appointment of Co-Trustee or Separate Trustee........................................147
         Section 8.11      Tax Matters..........................................................................149

ARTICLE IX

TERMINATION.....................................................................................................152
         Section 9.01      Termination upon Liquidation or Repurchase of all Mortgage Loans.....................152
         Section 9.02      Final Distribution on the Certificates...............................................152
         Section 9.03      Additional Termination Requirements..................................................154

                                                        iii

<PAGE>

ARTICLE X

MISCELLANEOUS PROVISIONS........................................................................................155
         Section 10.01     Amendment............................................................................155
         Section 10.02     Recordation of Agreement; Counterparts...............................................156
         Section 10.03     Governing Law........................................................................157
         Section 10.04     Intention of Parties.................................................................157
         Section 10.05     Notices..............................................................................157
         Section 10.06     Severability of Provisions...........................................................159
         Section 10.07     Assignment...........................................................................159
         Section 10.08     Limitation on Rights of Certificateholders...........................................159
         Section 10.09     Inspection and Audit Rights..........................................................160
         Section 10.10     Certificates Nonassessable and Fully Paid............................................160
</TABLE>

EXHIBITS

EXHIBIT A-1                Form of Class 1-A Certificate
EXHIBIT A-2                Form of Class 2-A-1 Certificate
EXHIBIT A-3                Form of Class 2-A-2 Certificate
EXHIBIT A-4                Form of Class 2-A-3 Certificate
EXHIBIT A-5                Form of Class M-1 Certificate
EXHIBIT A-6                Form of Class M-2 Certificate
EXHIBIT A-7                Form of Class M-3 Certificate
EXHIBIT A-8                Form of Class M-4 Certificate
EXHIBIT A-9                Form of Class M-5 Certificate
EXHIBIT A-10               Form of Class M-6 Certificate
EXHIBIT A-11               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

                                       iv

<PAGE>

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                  Form of Subsequent Transfer Agreement
EXHIBIT R                  Form of Corridor Contract
EXHIBIT S                  Form of Corridor Contract Assignment Agreement
EXHIBIT T                  Officer's Certificate with Respect to Prepayments
EXHIBIT U                  Standard & Poor's Predatory Lending Categorization

                                        v

<PAGE>

         POOLING AND SERVICING AGREEMENT, dated as of June 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
fourteen classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein).

                                     REMIC I

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (exclusive of the Corridor Contracts 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 363th Distribution Date. None of the REMIC I
Regular Interests will be certificated.

<TABLE>
<CAPTION>
                             Uncertificated REMIC I                                            Latest Possible
      Designation              Pass-Through Rate            Uncertificated Principal            Maturity Date
      -----------              -----------------            ------------------------            -------------
<S>                                   <C>                      <C>                                       <C>
          LT-1                        (1)                      $348,307,029.32                  December 2034
         LT-1PF                       (1)                      $ 59,692,970.68                  December 2034
          LT-2                        (1)                      $104,157,276.00                  December 2034
         LT-2PF                       (1)                      $ 59,692,970.68                  December 2032
          LT-P                        (1)                      $        100.00                  December 2034
          LT-R                        (1)                      $        100.00                  December 2034
</TABLE>

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

                                        1

<PAGE>

                                    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, remittance
rate (the "Uncertificated REMIC II Pass-Through Rate") and initial
Uncertificated Principal Balance for each of the "regular interests" in REMIC I
(the "REMIC II 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 II Regular Interest shall be the 363th
Distribution Date. None of the REMIC II Regular Interests will be certificated.

<TABLE>
<CAPTION>
                             Uncertificated REMIC II                                           Latest Possible
      Designation              Pass-Through Rate            Uncertificated Principal            Maturity Date
      -----------              -----------------            ------------------------            -------------
<S>                                   <C>                      <C>                             <C>
         LT-AA                        (1)                      259,700,000.00                  December 2034
         LT-1A                        (1)                        1,708,500.00                  December 2034
         LT-2A1                       (1)                          244,660.00                  December 2034
         LT-2A2                       (1)                          204,965.00                  December 2034
         LT-2A3                       (1)                           61,250.00                  December 2034
         LT-M1                        (1)                          172,250.00                  December 2034
         LT-M2                        (1)                           53,000.00                  December 2034
         LT-M3                        (1)                           86,125.00                  December 2034
         LT-M4                        (1)                           37,100.00                  December 2034
         LT-M5                        (1)                           29,150.00                  December 2034
         LT-M6                        (1)                           26,500.00                  December 2034
          LT-B                        (1)                           26,000.00                  December 2034
         LT-ZZ                        (1)                        2,650,000.00                  December 2034
          LT-P                        (1)                            $ 100.00                  December 2034
          LT-R                        (1)                            $ 100.00                  December 2034
        LT-1SUB                       (1)                            3,315.00                  December 2034
        LT-1GRP                       (1)                           17,415.35                  December 2034
        LT-2SUB                       (1)                              991.25                  December 2034
        LT-2GRP                       (1)                            5,207.86                  December 2034
         LT-XX                        (1)                      264,973,070.53                  December 2034
</TABLE>

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

                                        2

<PAGE>

                                    REMIC III

         As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC III Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
REMIC III. The Class R-III Interest will represent the sole class of "residual
interests" in REMIC III for purposes of the REMIC Provisions under federal
income tax law. The following table irrevocably sets forth the designation,
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 III. 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 III 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>
       Class 1-A                    (1)                     $341,700,000.00                     December 2034
      Class 2-A-1                   (1)                     $ 48,932,000.00                      March 2024
      Class 2-A-2                   (1)                     $ 40,993,000.00                     December 2032
      Class 2-A-3                   (1)                     $ 12,250,000.00                     December 2034
       Class M-1                    (1)                     $ 34,450,000.00                     November 2034
       Class M-2                    (1)                     $ 10,600,000.00                    September 2034
       Class M-3                    (1)                     $ 17,225,000.00                    September 2034
       Class M-4                    (1)                     $  7,420,000.00                       July 2034
       Class M-5                    (1)                     $  5,830,000.00                       June 2034
       Class M-6                    (1)                     $  5,300,000.00                      April 2034
        Class B                     (1)                     $  5,300,000.00                     January 2034
        Class C                     (2)                     $          0.00                     December 2034
        Class P                     (3)                     $        100.00                     December 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 on a Notional Balance as
         described in the definition of Current Interest. The Class C
         Certificates will not accrue interest on their Certificate Principal
         Balance.
(3)      The Class P Certificates will not be entitled to distributions of
         interest.

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

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

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

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

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

         ADVANCE: The aggregate of the advances required to be made by the
Master Servicer with respect to any Distribution Date pursuant to Section 4.01,
the amount of any such advances being equal to the sum of (A) the aggregate of
payments of principal and interest on the Actuarial Mortgage Loans and payments
of interest on the Simple Interest Mortgage Loans (in each case, net of the
Servicing Fees) on the Mortgage Loans that were due on the related Due Date and
not received by the Master Servicer as of the close of business on the related
Determination Date and (B) with respect to each REO Property that has not been
liquidated, an amount equal to the excess, if any, of (x) one month's interest
(adjusted to the Net Mortgage Rate) on the Stated Principal Balance of the
related Mortgage Loan over (y) the net monthly rental income (if any) from such
REO Property

                                        4

<PAGE>

deposited in the Certificate Account for such Distribution Date pursuant to
Section 3.12, less the aggregate amount of any such delinquent payments that the
Master Servicer has determined would constitute a Nonrecoverable Advance were an
advance to be made with respect thereto. Notwithstanding the foregoing, all
references to scheduled interest or interest due on a related Due Date with
respect to a Simple Interest Mortgage Loan will mean an amount equal to the
excess of (i) 30 days' interest at the applicable Net Mortgage Rate on the
Stated Principal Balance of such Simple Interest Mortgage Loan as of the last
day of the related Due Period over (ii) the portion of any monthly payment
received from the borrower during the related Due Period which was allocable to
interest.

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

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

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

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

         BANKRUPTCY CODE:  Title 11 of the United States Code.

         BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.

                                        5

<PAGE>

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

         CARRYOVER RESERVE FUND: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-ECC1". 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-11, 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-ECC1". 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 GROUP: Any of the Group 1 Certificates or Group 2
Certificates.

         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

                                        6

<PAGE>

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 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 TARGET AMOUNT: For any Distribution
Date, the excess of (i) the sum of the aggregate Certificate Principal Balance
of the Class 1-A, Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates
immediately prior to such Distribution Date, over (ii) the lesser of (x) 62.90%
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 Initial
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
if the aggregate Certificate Principal Balance of the Subordinated Certificates
has been reduced to zero, the Class A Principal Distribution Target Amount shall
equal the sum of the Class 1-A and Class 2- A Principal Target Amounts.

         CLASS 1-A CORRIDOR CONTRACT: The transaction evidenced by the
Confirmation and Agreement for the benefit of the Class 1-A Certificateholders
(as assigned to the Trustee pursuant to the Class 1-A Corridor Contract
Assignment Agreement), a form of which is attached hereto as Exhibit R.

         CLASS 1-A CORRIDOR CONTRACT ASSIGNMENT AGREEMENT: The Assignment
Agreement regarding the Class 1-A Corridor Contract dated as of the Closing Date
among the Seller, the Trustee and the Corridor Contract Counterparty, a form of
which is attached hereto as Exhibit S.

                                        7

<PAGE>

         CLASS 1-A CORRIDOR CONTRACT PAYMENT AMOUNT: The amount, if any,
received by the Trustee for the benefit of the Trust Fund in respect of the
Class 1-A Corridor Contract.

         CLASS 1-A CORRIDOR CONTRACT TERMINATION DATE: The Distribution Date in
November 2010.

         CLASS 1-A CONFIRMATION AND AGREEMENT: The Confirmation and Agreement
dated June 17, 2004, reference number 2000005044349, evidencing the Class 1-A
Corridor Contract.

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

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

         CLASS 1-A CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 1-A Pass-Through Rate on
the Class 1-A Certificate Principal Balance immediately prior to such
Distribution Date.

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

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

         CLASS 1-A MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 0.300% per annum and, for any Distribution Date after the
Optional Termination Date, 0.600% per annum.

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

         CLASS 1-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
product of (a) the Class A Principal Distribution Target Amount and (b) a
fraction, the numerator of which is the Class 1-A Principal Distribution Target
Amount and the denominator of which is the sum of the Class 1-A Principal
Distribution Target Amount and Class 2-A Principal Distribution Target Amount.

                                       8

<PAGE>

         CLASS 1-A PRINCIPAL DISTRIBUTION TARGET AMOUNT: For any Distribution
Date, the excess of (i) the Certificate Principal Balance of the Class 1-A
Certificates immediately prior to such Distribution Date, over (ii) the lesser
of (x) 62.90% of the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 1 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 in Loan Group 1 for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus 0.50% of the
sum of the Stated Principal Balance of the Mortgage Loans in Loan Group 1 as of
the Cut-off Date and the Pre-Funded Amount allocated to Loan Group 1 on the
Closing Date.

         CLASS 2-A CORRIDOR CONTRACT: The transaction evidenced by the
Confirmation And Agreement for the benefit of the Class 2-A-1
Certificateholders, Class 2-A-2 Certificateholders and Class 2-A-3
Certificateholders (as assigned to the Trustee pursuant to the Class 2-A
Corridor Contract Assignment Agreement), a form of which is attached hereto as
Exhibit R.

         CLASS 2-A CORRIDOR CONTRACT ASSIGNMENT AGREEMENT: The Assignment
Agreement regarding the Class 2-A Corridor Contract dated as of the Closing Date
among the Seller, the Trustee and the Corridor Contract Counterparty, a form of
which is attached hereto as Exhibit S.

         CLASS 2-A CORRIDOR CONTRACT PAYMENT AMOUNT: The amount, if any,
received by the Trustee for the benefit of the Trust Fund in respect of the
Class 2-A Corridor Contract.

         CLASS 2-A CORRIDOR CONTRACT TERMINATION DATE: The Distribution Date in
November 2010.

         CLASS 2-A CONFIRMATION AND AGREEMENT: The Confirmation and Agreement
dated June 17, 2004, reference number 2000005044351, evidencing the Class 2-A
Corridor Contract.

         CLASS 2-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
product of (a) the Class A Principal Distribution Target Amount and (b) a
fraction, the numerator of which is the Class 2-A Principal Distribution Target
Amount and the denominator of which is the sum of the Class 1-A Principal
Distribution Target Amount and Class 2-A Principal Distribution Target Amount.

         CLASS 2-A PRINCIPAL DISTRIBUTION TARGET AMOUNT: For any Distribution
Date, the excess of (i) the aggregate Certificate Principal Balance of the Class
2-A-1, Class 2-A-2 and Class 2-A-3 Certificates immediately prior to such
Distribution Date, over (ii) the lesser of (x) 62.90% of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 2 for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
and (y) the aggregate Stated Principal Balances of the Initial Mortgage Loans in
Loan Group 2 for such Distribution Date after giving effect to distributions to
be made on that Distribution Date minus 0.50% of the sum of the Stated Principal
Balance of the Mortgage Loans in Loan Group 2 as of the Cut-off Date and the
Pre-Funded Amount allocated to Loan Group 2 on the Closing Date.

         CLASS 2-A-1 CERTIFICATE: Any certificate designed as a "Class 2-A-1
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.

                                        9

<PAGE>

         CLASS 2-A-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-1
Certificates.

         CLASS 2-A-1 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-1 Pass-Through Rate
on the Class 2-A-1 Certificate Principal Balance immediately prior to such
Distribution Date.

         CLASS 2-A-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date,
the excess of (a) the Class 2-A-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-1
Certificates with respect to interest on such prior Distribution Dates.

         CLASS 2-A-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date, the
sum of (A) the excess of (i) the amount of interest the Class 2-A-1 Certificates
would otherwise have accrued for such Distribution Date had such rate been
calculated as the sum of One-Month LIBOR and the applicable Class 2-A-1 Margin
for such Distribution Date, over (ii) the amount of interest accrued on the
Class 2-A-1 Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class 2-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 2-A-1 Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS 2-A-1 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 0.150% per annum and, for any Distribution Date after
the Optional Termination Date, 0.300% per annum.

         CLASS 2-A-1 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-1 Margin and (ii) the Net Rate Cap for
such Distribution Date.

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

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

         CLASS 2-A-2 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-2 Pass-Through Rate
on the Class 2-A-2 Certificate Principal Balance immediately prior to such
Distribution Date.

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

         CLASS 2-A-2 INTEREST CARRYOVER AMOUNT: For any Distribution Date, the
sum of (A) the excess of (i) the amount of interest the Class 2-A-2 Certificates
would otherwise have accrued for such

                                       10

<PAGE>

Distribution Date had such rate been calculated as the sum of One-Month LIBOR
and the applicable Class 2-A-2 Margin for such Distribution Date, over (ii) the
amount of interest accrued on the Class 2-A-2 Certificates at the Net Rate Cap
for such Distribution Date and (B) the Class 2-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 2-A-2 Pass-Through Rate (without
giving effect to the Net Rate Cap).

         CLASS 2-A-2 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 0.300% per annum and, for any Distribution Date after
the Optional Termination Date, 0.600% per annum.

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

         CLASS 2-A-3 CERTIFICATE: Any Certificate designated as a "Class 2-A-3
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein

         CLASS 2-A-3 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-3
Certificates.

         CLASS 2-A-2 CURRENT INTEREST: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class 2-A-3 Pass-Through Rate
on the Class 2-A-3 Certificate Principal Balance immediately prior to such
Distribution Date.

         CLASS 2-A-3 INTEREST CARRY FORWARD AMOUNT: For any Distribution Date,
the excess of (a) the Class 2-A-3 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-3
Certificates with respect to interest on such prior Distribution Dates.

         CLASS 2-A-3 INTEREST CARRYOVER AMOUNT: For any Distribution Date, the
sum of (A) the excess of (i) the amount of interest the Class 2-A-1 Certificates
would otherwise have accrued for such Distribution Date had such rate been
calculated as the sum of One-Month LIBOR and the applicable Class 2-A-1 Margin
for such Distribution Date, over (ii) the amount of interest accrued on the
Class 2-A-1 Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class 2-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 2-A-1 Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS 2-A-3 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 0.520% per annum and, for any Distribution Date after
the Optional Termination Date, 1.040% per annum.

         CLASS 2-A-3 PASS-THROUGH RATE: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class 2-A-3 Margin and (ii) the Net Rate Cap for
such Distribution Date.

                                       11

<PAGE>

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

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

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

         CLASS B CERTIFICATE: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-11 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.

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

         CLASS B MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 3.000% per annum and, for any Distribution Date after the
Optional Termination Date, 4.500% per annum.

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

                                       12

<PAGE>

         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 Class 1-A, Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates
(after taking into account distribution of the Class 1-A and Class 2-A Principal
Distribution Amounts on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distribution
of the Class M-3 Principal Distribution Amount on such Distribution Date), (E)
the Class M-4 Certificate Principal Balance (after taking into account
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date), (F) the Class M-5 Certificate Principal Balance (after taking into
account distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date), (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 B Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 95.40%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class 1-A Certificate Principal Balance, the Class 2-A-1 Certificate Principal
Balance, the Class 2-A-2 Certificate Principal Balance, the Class 2-A-3
Certificate Principal Balance, the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance, the Class M-3 Certificate Principal
Balance, the Class M-4 Certificate Principal Balance, the Class M-5 Certificate
Principal Balance and the Class M-6 Certificate Principal Balance have been
reduced to zero, the Class B Principal Distribution Amount for such Distribution
Date will equal 100% of the Principal Distribution Amount for such Distribution
Date.

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

         CLASS C CURRENT INTEREST: For any Distribution Date, the interest
accrued on the Class C Notional Amount during the related Accrual Period at the
Class C Pass-Through Rate.

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

                                       13

<PAGE>

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

                  (B) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-1A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LT-1A;

                  (C) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-2A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LT-2A1;

                  (D) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-2A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LT-2A2;

                  (E) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-2A3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LT-2A3;

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

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

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

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

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

                                       14

<PAGE>

                  (K) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-M6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LT-M6;

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

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

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

         CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-5 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, the sum
of (A) the excess of (i) the amount of interest the Class M-1 Certificates would
otherwise have accrued for such Distribution Date had such rate been calculated
as the sum of One-Month LIBOR and the applicable Class M-1 Margin for such
Distribution Date, over (ii) the amount of interest accrued on the Class M-1
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
M-1 Interest Carryover Amount for all previous Distribution Dates not previously
paid pursuant to Section 4.04, together with interest thereon at the Class M-1
Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS M-1 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 0.630% per annum and, for any Distribution Date after the
Optional Termination Date, 0.945% per annum.

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

                                       15

<PAGE>

         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 Class 1-A, Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates (after taking into account distribution of the Class 1-A and Class
2-A Principal Distribution Amounts on such Distribution Date) and (B) the Class
M-1 Certificate Principal Balance immediately prior to such Distribution Date
over (ii) the lesser of (x) 75.90% of the aggregate Stated Principal Balances of
the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Class 1-A Certificate Principal Balance, the
Class 2-A-1 Certificate Principal Balance, the Class 2-A-2 Certificate Principal
Balance, the Class 2-A-3 Certificate Principal Balance, the Class M-2
Certificate Principal Balance, the Class M-3 Certificate Principal Balance, the
Class M-4 Certificate Principal Balance, the Class M-5 Certificate Principal
Balance, Class M-6 Certificate Principal Balance and the Class B Certificate
Principal Balance have been 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-6 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, the sum
of (A) the excess of (i) the amount of interest the Class M-2 Certificates would
otherwise have accrued for such Distribution Date had such rate been calculated
as the sum of One-Month LIBOR and the applicable Class M-2 Margin for such
Distribution Date, over (ii) the amount of interest accrued on the Class M-2
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
M-2 Interest Carryover Amount for all previous Distribution Dates not previously
paid pursuant to Section 4.04, together with interest thereon at the Class M-2
Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS M-2 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 0.700% per annum and, for any Distribution Date after the
Optional Termination Date, 1.050% per annum.

                                       16

<PAGE>

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

         CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Class 1-A, Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates (after taking into account distribution of the Class 1-A and Class
2-A Principal Distribution Amounts on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-2 Certificate Principal Balance immediately prior to such Distribution
Date over (ii) the lesser of (x) 79.90% of the aggregate Stated Principal
Balances of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Class 1-A Certificate Principal Balance, the
the Class 2-A-1 Certificate Principal Balance, the Class 2-A-2 Certificate
Principal Balance, the Class 2-A-3 Certificate Principal Balance, the Class M-1
Certificate Principal Balance, the Class M-3 Certificate Principal Balance, the
Class M-4 Certificate Principal Balance, the Class M-5 Certificate Principal
Balance, the Class M-6 Certificate Principal Balance and the Class B Certificate
Principal Balance have been reduced to zero, the Class M-2 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.

         CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-7 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, the sum
of (A) the excess of (i) the amount of interest the Class M-3 Certificates would
otherwise have accrued for such Distribution Date had such rate been calculated
as the sum of One-Month LIBOR and the applicable Class M-3 Margin for such
Distribution Date, over (ii) the amount of interest accrued on the Class M-3
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
M-3 Interest Carryover Amount for all previous Distribution Dates not previously
paid pursuant to Section 4.04, together with interest thereon at the Class M-3
Pass-Through Rate (without giving effect to the Net Rate Cap).

                                       17

<PAGE>

         CLASS M-3 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 1.300% per annum and, for any Distribution Date after the
Optional Termination Date, 1.950% per annum.

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

         CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Class 1-A Certificates and Class 2-A-1, Class 2-A-2 and
Class 2-A-3 Certificates (after taking into account distribution of the Class
1-A and Class 2-A Principal Distribution Amounts on such Distribution Date), (B)
the Class M-1 Certificate Principal Balance (after taking into account
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (C) the Class M-2 Certificate Principal Balance (after taking into
account distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (D) the Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 86.40%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class 1-A Certificate Principal Balance, Class 2-A-1 Certificate Principal
Balance, the Class 2-A-2 Certificate Principal Balance, the Class 2-A-3
Certificate Principal Balance, the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance, the Class M-4 Certificate Principal
Balance, the Class M-5 Certificate Principal Balance, the Class M-6 Certificate
Principal Balance and the Class B Certificate Principal Balance have been
reduced to zero, the Class M-3 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

         CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-8 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, the sum
of (A) the excess of (i) the amount of interest the Class M-4 Certificates would
otherwise have accrued for such

                                       18

<PAGE>

Distribution Date had such rate been calculated as the sum of One-Month LIBOR
and the applicable Class M-4 Margin for such Distribution Date, over (ii) the
amount of interest accrued on the Class M-4 Certificates at the Net Rate Cap for
such Distribution Date and (B) the Class M-4 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class M-4 Pass-Through Rate (without
giving effect to the Net Rate Cap).

         CLASS M-4 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 1.500% per annum and, for any Distribution Date after the
Optional Termination Date, 2.250% 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 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 Class 1-A Certificates and Class 2-A-1, Class 2-A-2 and
Class 2-A-3 Certificates (after taking into account distribution of the Class
1-A and Class 2-A Principal Distribution Amounts on such Distribution Date), (B)
the Class M-1 Certificate Principal Balance (after taking into account
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (C) the Class M-2 Certificate Principal Balance (after taking into
account distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distribution of the Class M-3 Principal Distribution Amount
on such Distribution Date) and (E) the Class M-4 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 89.20%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class 1-A Certificate Principal Balance, the Class 2-A-1 Certificate Principal
Balance, the Class 2-A-2 Certificate Principal Balance, the Class 2-A-3
Certificate Principal Balance, the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance, the Class M-3 Certificate Principal
Balance, the Class M-5 Certificate Principal Balance, the Class M-6 Certificate
Principal Balance and the Class B Certificate Principal Balance have been
reduced to zero, the Class M-4 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

         CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-9 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.

                                       19

<PAGE>

         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, the sum
of (A) the excess of (i) the amount of interest the Class M-5 Certificates would
otherwise have accrued for such Distribution Date had such rate been calculated
as the sum of One-Month LIBOR and the applicable Class M-5 Margin for such
Distribution Date, over (ii) the amount of interest accrued on the Class M-5
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
M-5 Interest Carryover Amount for all previous Distribution Dates not previously
paid pursuant to Section 4.04, together with interest thereon at the Class M-5
Pass-Through Rate (without giving effect to the Net Rate Cap).

         CLASS M-5 MARGIN: For any Distribution Date on or prior to the Optional
Termination Date, 2.000% per annum and, for any Distribution Date after the
Optional Termination Date, 3.000% per annum.

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

         CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Class 1-A Certificates and the Class 2-A-1, Class
2-A-2, and Class 2-A-3 Certificates (after taking into account distribution of
the Class 1-A and Class 2-A Principal Distribution Amounts on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distribution of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class M-4 Certificate Principal
Balance (after taking into account distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (F) the Class M-5 Certificate
Principal Balance immediately prior to such Distribution Date over (ii) the
lesser of (x) 91.40% of the aggregate Stated Principal Balances of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date minus the OC Floor; provided, however, that
after the Class 1-A Certificate Principal Balance, the Class 2-A-1 Certificate
Principal Balance, the Class 2-A-2 Certificate Principal Balance, the Class
2-A-3 Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate

                                       20

<PAGE>

Principal Balance, the Class M-4 Certificate Principal Balance, the Class M-6
Certificate Principal Balance and the Class B Certificate Principal Balance have
been reduced to zero, the Class M-5 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

         CLASS M-6 CERTIFICATE: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A-10 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, the sum
of (A) the excess of (i) the amount of interest the Class M-6 Certificates would
otherwise have accrued for such Distribution Date had such rate been calculated
as the sum of One-Month LIBOR and the applicable Class M-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 any Distribution Date on or prior to the Optional
Termination Date, 2.250% per annum and, for any Distribution Date after the
Optional Termination Date, 3.375% 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 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 Class 1-A Certificates and Class 2-A-1, Class 2-A-2,
and Class 2-A-3 Certificates (after taking into account distribution of the
Class 1-A and Class 2-A Principal Distribution Amounts on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distribution of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account

                                       21

<PAGE>

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) 93.40%
of the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Class 1-A Certificate Principal Balance, the Class 2-A-1 Certificate Principal
Balance, the Class 2-A-2 Certificate Principal Balance, the Class 2-A-3
Certificate Principal Balance, the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance, the Class M-3 Certificate Principal
Balance, the Class M-4 Certificate Principal Balance, the Class M-5 Certificate
Principal Balance and the Class B Certificate Principal Balance have been
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 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-ECC1".

         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.

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

         CLOSING DATE: June 25, 2004.

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

                                       22

<PAGE>

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

         CONFIRMATION AND AGREEMENTS: The Class 1-A Confirmation and Agreement,
Class 2-A Confirmation And Agreement and Subordinated Confirmation and
Agreement.

         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 II REGULAR INTEREST            REMIC III CERTIFICATE
                   -------------------------            ---------------------
                             LT-1A                      Class 1-A Certificate
                             LT-2A1                   Class 2-A-1 Certificate
                             LT-2A2                   Class 2-A-2 Certificate
                             LT-2A3                   Class 2-A-3 Certificate
                             LT-M1                      Class M-1 Certificate
                             LT-M2                      Class M-2 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-B                        Class B Certificate
                              LT-P                        Class P Certificate
                              LT-R                      Class A-R Certificate

         CORRIDOR CONTRACTS: The Class 1-A Corridor Contract, Class 2-A Corridor
Contract and Subordinated Corridor Contract.

         CORRIDOR CONTRACT ASSIGNMENT AGREEMENT: The Class 1-A Corridor Contract
Assignment Agreement, Class 2-A Corridor Contract Assignment Agreement and
Subordinated Corridor Contract Assignment Agreement, as applicable.

         CORRIDOR CONTRACT COUNTERPARTY: JP Morgan Chase Bank., and any
permitted successors and assigns pursuant to the Corridor Contracts.

                                                        23

<PAGE>

         CORRIDOR CONTRACT PAYMENT AMOUNT: The Class 1-A Corridor Contract
Payment Amount, Class 2-A Corridor Contract Payment Amount and Subordinated
Corridor Contract Payment Amount, as applicable.

         CORRIDOR CONTRACT TERMINATION DATE: The Class 1-A Corridor Contract
Termination Date, Class 2-A Corridor Contract Termination Date and Subordinated
Corridor Contract Termination Date, as applicable.

         CURRENT INTEREST: With respect to (i) the Class 1-A Certificates, the
Class 1-A Current Interest, (ii) the Class 2-A Certificates, the Class 2-A
Current Interest, (iii) the Class M-1 Certificates, the Class M-1 Current
Interest, (iv) the Class M-2 Certificates, the Class M-2 Current Interest, (v)
the Class M-3 Certificates, the Class M-3 Current Interest, (vi) the Class M-4
Certificates, the Class M-4 Current Interest, (vii) the Class M-5 Certificates,
the Class M-5 Current Interest, (viii) the Class M-6 Certificates, the Class M-6
Current Interest, (ix) the Class B Certificates, the Class B Current Interest
and (x) the Class C Certificates, the Class C Current Interest.

         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>
July 2007 - June 2008................................3.00% with respect to July 2007, plus an additional 1/12th of
                                                     1.75% for each month thereafter until June 2008
July 2008 - June 2009................................4.75% with respect to July 2008, plus an additional 1/12th of
                                                     1.25% for each month thereafter until June 2009
July 2009 - June 2010................................6.00% with respect to July 2009, plus an additional 1/12th of
                                                     0.75% for each month thereafter until June 2010
July 2010 and thereafter.............................6.75%
</TABLE>

         CUT-OFF DATE: In the case of any Initial Mortgage Loan, the later of
(x) June 1, 2004 and (y) the date of origination of such Mortgage Loan (the
"Initial Cut-off Date"), and in the case of any Subsequent Mortgage Loan, the
later of (x) the first day of the month of the related Subsequent Transfer Date
and (y) the date of origination of such Subsequent Mortgage Loan (the related
"Subsequent Cut-off Date"). When used with respect to any Mortgage Loans "the
Cut-off Date" shall mean the related Cut-off Date.

         CUT-OFF DATE PRINCIPAL BALANCE: As to any Actuarial 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

                                       24

<PAGE>

received in respect of Due Dates after the Cut-off Date. As to any Simple
Interest Mortgage Loan, the unpaid principal balance thereof as of the close of
business on the Cut-off Date after application of all payments of principal made
on or prior to the Cut-off Date and all Principal Prepayments received on or
prior to the Cut-off Date.

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

         DEFINITIVE CERTIFICATES:  As defined in Section 5.06.

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

         DELAY DELIVERY MORTGAGE LOANS: The Initial 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, and (ii) up to 90% of the Subsequent Mortgage
Loans delivered on a Subsequent Transfer Date. The Depositor shall deliver (or
cause delivery of) the Mortgage Files to the Trustee: (A) with respect to at
least 50% of the Initial Mortgage Loans in each Loan Group, not later than the
Closing Date, and with respect to at least 10% of the Subsequent Mortgage Loans
conveyed on the related Subsequent Transfer Date in each Loan Group, (B) with
respect to at least an additional 40% of the Initial Mortgage Loans, not later
than 21 days after the Closing Date, and not later than twenty one days after
the relevant Subsequent Transfer Date with respect to the remaining Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date, and (C), with respect
to the remaining 10% of the Mortgage Loans, not later than thirty days after the
Closing Date.

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

         DELINQUENCY TRIGGER EVENT: With respect to any Distribution Date on or
after the Stepdown Date exists if the product of (i) 2.40 and (ii) the Rolling
Delinquency Percentage equals or exceeds the Required Percentage.

         DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the

                                       25

<PAGE>

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-ECC1". Funds in the Distribution Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement.

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

         DISTRIBUTION DATE: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in July 2004.

                                       26

<PAGE>

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

         DUE PERIOD: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.

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

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

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

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

         EVENT OF DEFAULT:  As defined in Section 7.01 hereof.

         EXCESS CASHFLOW: With respect to any Distribution Date the sum of (i)
the amount remaining after the distribution of interest to Certificateholders
for such Distribution Date pursuant to Section 4.04(a)(ix), and (ii) the amount
remaining after the distribution of principal to Certificateholders for such
Distribution Date pursuant to Section 4.04(d)(i)(I) or 4.04(d)(ii)(I) 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 Overcollateralization 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 and Loan Group, the lesser of (1) the Overcollateralization Deficiency
Amount for such Distribution Date multiplied by a fraction, the numerator of
which is the Principal Remittance Amount for such Loan Group and the denominator
of which is the Principal Remittance Amount for both Loan Groups and (2) the
Loan Group Excess Cashflow Allocation Amount for such Distribution Date
available for payment thereof pursuant to Section 4.04(e)(i).

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

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

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

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

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

         FUNDING PERIOD:

         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

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<PAGE>

Adjustment Date, and which is set forth in the Mortgage Loan Schedule for the
Adjustable Rate Mortgage Loans.

         GROUP 1 CERTIFICATES: The Class A-R Certificates and the Class 1-A
Certificates.

         GROUP 1 MORTGAGE LOANS: The group of Mortgage Loans identified in the
related Mortgage Loan Schedule as "Group 1 Mortgage Loans", including in each
case any Mortgage Loans delivered in replacement thereof.

         GROUP 1 NET WAC: The weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 1.

         GROUP 2 CERTIFICATES:  The Class 2-A Certificates.

         GROUP 2 MORTGAGE LOANS: The group of Mortgage Loans identified in the
related Mortgage Loan Schedule as "Group 2 Mortgage Loans", including any
Mortgage Loans delivered in replacement thereof.

         GROUP 2 NET WAC: The weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 2.

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

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

         INITIAL CERTIFICATE ACCOUNT DEPOSIT: An amount equal to the aggregate
of all amounts in respect of (i) principal of the Initial Mortgage Loans due on
or after the Initial 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, (ii) interest on the Initial Mortgage Loans due on and after the
Initial Cut-off Date and received by the Master Servicer before the Closing Date
and (iii) $100 in respect of the Class A-R Certificates.

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

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<PAGE>

         INITIAL MORTGAGE LOAN: A Mortgage Loan conveyed to the Trust Fund on
the Closing Date pursuant to this Agreement as identified on the Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.

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

         ISSUER TRUST: CWL 2004-ECC1 Trust

         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 1-A
Certificates, the Class 1-A Interest Carry Forward Amount, (ii) the Class 2-A-1,
Class 2-A-2 and Class 2-A-3 Certificates, the Class 2-A Interest Carry Forward
Amount, (iii) the Class M-1 Certificates, the Class M-1 Interest Carry Forward
Amount, (iv) the Class M-2 Certificates, the Class M-2 Interest Carry Forward
Amount, (v) the Class M-3 Certificates, the Class M-3 Interest Carry Forward
Amount, (vi) the Class M-4 Certificates, the Class M-4 Interest Carry Forward
Amount, (vii) the Class M-5 Certificates, the Class M-5 Interest Carry Forward
Amount, (viii) the Class M-6 Certificates, the Class M-6 Interest Carry Forward
Amount, and (ix) 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, June 28, 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 in each
Loan Group and any Master Servicer Advance Date, the sum, without duplication,
of (i) all scheduled interest collected during the related Due Period with
respect to the Mortgage Loans less the related Servicing Fee, (ii) interest
payments on any Principal Prepayments received during the related Prepayment

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<PAGE>

Period other than Prepayment Interest Excess, (iii) all related Advances
relating to interest with respect to the Mortgage Loans, (iv) all Compensating
Interest with respect to the Mortgage Loans, (v) Liquidation Proceeds with
respect to the Mortgage Loans collected during the related Due Period (to the
extent such Liquidation Proceeds relate to interest), and (v) for the Master
Servicer Advance Date in July 2004, the Seller Shortfall Interest Requirement
for such Master Servicer Advance Date (if any), less all Nonrecoverable Advances
relating to interest reimbursed during the related Due Period.

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

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

         LIQUIDATED LOAN: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Master Servicer has certified (in accordance with
Section 3.12) in the related Prepayment Period that it has received all amounts
it expects to receive in connection with such liquidation.

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

         LOAN NUMBER AND BORROWER IDENTIFICATION MORTGAGE LOAN SCHEDULE: With
respect to any Subsequent Transfer Date, the Loan Number and Borrower
Identification Mortgage Loan Schedule delivered in connection with such
Subsequent Transfer Date pursuant to Section 2.01(f). Each Loan Number and
Borrower Identification Mortgage Loan Schedule shall contain the information
specified in the definition of "Mortgage Loan Schedule" with respect to the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, and each
Loan Number and Borrower Identification Mortgage Loan Schedule shall be deemed
to be included in the Mortgage Loan Schedule

         LOAN GROUP:  Any of Loan Group 1 or Loan Group 2.

         LOAN GROUP CHARACTERISTICS: The characteristics for each Loan Group
identified under the caption "The Mortgage Pool" in the Prospectus Supplement.

         LOAN GROUP 1:  The Group 1 Mortgage Loans.

         LOAN GROUP 2:  The Group 2 Mortgage Loans.

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<PAGE>

         LOAN GROUP EXCESS CASHFLOW ALLOCATION AMOUNT: With respect to any
Distribution Date and Loan Group, the product of (i) the Excess Cashflow for
such Distribution Date multiplied by (ii) a fraction, the numerator of which is
the Principal Remittance Amount for such Loan Group for such Distribution Date
and the denominator of which is the sum of the Principal Remittance Amount for
both Loan Groups.

         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 II Pass- Through Rate for REMIC II Regular
Interest LT-A1, REMIC II Regular Interest LT-2A1, REMIC II Regular Interest
LT-2A2, REMIC II Regular Interest LT-2A3, REMIC II Regular Interest LT-M1, REMIC
II Regular Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular
Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest
LT-M6, REMIC II Regular Interest LT-B and REMIC II Regular Interest LT-ZZ, with
the rates on each such REMIC II Regular Interest (other than REMIC II Regular
Interest LT-ZZ) subject to a cap equal to the lesser of (i) LIBOR plus the
related Margin for Corresponding Class for such REMIC II Regular Interest and
(ii) the related Net Rate Cap, and the rate on REMIC II Regular Interest LT-ZZ
subject to a cap of zero for purposes of this calculation; provided that the
Uncertificated REMIC II Pass-Through Rate and the related caps for REMIC II
Regular Interest LT-A1, REMIC II Regular Interest LT-2A1, REMIC II Regular
Interest LT-2A2, REMIC II Regular Interest LT-2A3, REMIC II Regular Interest
LT-M1, REMIC II Regular Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC
II Regular Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular
Interest LT-M6 and REMIC II Regular Interest LT-B shall be multiplied by a
fraction the numerator of which is the actual number of days in the Accrual
Period and the denominator of which is 30.

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

         MASTER SERVICER ADVANCE DATE: As to any Distribution Date, 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.

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<PAGE>

         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 Group 1 Mortgage Loans and Group 2 Mortgage
Loans transferred and assigned to the Trustee pursuant to the provisions hereof
and any Subsequent Transfer Agreement 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 (x) Replacement Mortgage Loans pursuant to the
provisions of this Agreement any (y) Subsequent Mortgage Loans pursuant to the
provisions of this Agreement and any Subsequent Transfer Agreement) transferred
to the Trustee as part of the Trust Fund and from time to time subject to this
Agreement, attached hereto as Exhibit F-1, setting forth the following
information with respect to each Mortgage Loan:

         (i) the loan number;

         (ii)     the Loan Group;

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<PAGE>

         (iii) the Appraised Value;

         (iv) the Initial Mortgage Rate;

         (v) the maturity date;

         (vi) the original principal balance;

         (vii) the Cut-off Date Principal Balance;

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

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

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

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

         (xii) 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;

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

         (xiv) [reserved];

         (xv) 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.

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<PAGE>

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

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

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

         MORTGAGED PROPERTY:  The underlying property securing a Mortgage Loan.

         MORTGAGOR:  The obligors on a Mortgage Note.

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

         NET RATE CAP: For any Distribution Date, (i) With respect to the Class
1-A Certificates, the Group 1 Net WAC, (ii) with respect to the Class 2-A-1,
Class 2-A-2 and Class 2-A-3 Certificates, the Group 2 Net WAC, and (iii) with
respect to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6
and Class B Certificates, the weighted average of the Group 1 Net WAC and Group
2 Net WAC (weighted (x) in the case of the Group 1 Net WAC on the positive
difference (if any) of the Stated Principal Balance of the Mortgage Loans in
Loan Group 1 plus the related Pre- Funded Amount over the outstanding
Certificate Principal Balance of the Class 1-A Certificates and (y) in the case
of the Group 2 Net WAC on the positive difference (if any) of the Stated
Principal Balance of the Mortgage Loans in Loan Group 2 plus the related
Pre-Funded Amount over the aggregate outstanding Certificate Principal Balance
the Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates), in the case of each
of (i), (ii) and (iii) above, 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, the equivalent of clause (i) above shall be expressed as the weighted
average of the Uncertificated REMIC I Pass-Through Rate on REMIC II Regular
Interest LT-1GRP, weighted on the basis of the Uncertificated Principal Balance
of such REMIC II Regular Interest. For federal income tax purposes, the
equivalent of clause (ii) above shall be expressed as the weighted average of
the Uncertificated REMIC II Pass- Through Rate on REMIC II Regular Interest
LT-2GRP, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II Regular Interest. For federal income tax purposes, the equivalent of
clause (iii) above shall be expressed as the weighted average of the
Uncertificated REMIC II Pass-Through Rates on (a) REMIC II Regular Interest
LT-1SUB, subject to a cap and a floor equal to the Group 1 Net WAC Rate and (b)
REMIC II Regular Interest LT-2SUB, subject to a cap and a floor equal to the
Group 2 Net WAC Rate; in each case weighted on the basis of the Uncertificated
Principal Balance of such REMIC II Regular Interests.

         NET RATE CARRYOVER: With respect to any Distribution Date, an amount
equal to the sum of (i) the Class 1-A Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class 2-A-1 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class 2-A-2 Interest Rate

                                       35

<PAGE>

Carryover Amount for such Distribution Date (if any), (iv) the Class 2-A-3
Interest Rate Carryover Amount for such Distribution Date (if any), (v) the
Class M-1 Interest Carryover Amount for such Distribution Date (if any), (vi)
the Class M-2 Interest Carryover Amount for such Distribution Date (if any),
(vii) the Class M-3 Interest Carryover Amount for such Distribution Date (if
any), (viii) the Class M-4 Interest Carryover Amount for such Distribution Date
(if any), (ix) the Class M-5 Interest Carryover Amount for such Distribution
Date (if any), (x) the Class M-6 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 sum of the Stated
Principal Balance of the Initial Mortgage Loans as of the Cut-off Date plus the
original Pre-Funded Amount on the Closing Date.

         OFFERED CERTIFICATES: The Class 1-A, Class 2-A-1, Class 2-A-2, Class
2-A-3, Class A-R, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6 and Class B Certificates.

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

         ONE-MONTH LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR calculated for the first Accrual Period shall equal 1.14% 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,

                                       36

<PAGE>

such other service for displaying One-Month LIBOR or comparable rates as may be
reasonably selected by the Trustee), One-Month LIBOR for the applicable Accrual
Period will be the Reference Bank Rate. If no such quotations can be obtained by
the Trustee and no Reference Bank Rate is available, One-Month LIBOR will be
One-Month LIBOR applicable to the preceding Accrual Period.

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

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

         OPTIONAL TERMINATION DATE: Any Distribution Date on which the Stated
Principal Balance of the Mortgage Loans is equal to or less than 10% of the sum
of the Stated Principal Balance of the Initial Mortgage Loans as of the Initial
Cut-off Date plus the Pre-Funded Amount on the Closing 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.

         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.

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<PAGE>

         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
and the Pre-Funded Amount as of the last day of the related Due Period exceeds
(y) the aggregate Certificate Principal Balance of the Offered Certificates as
of such Distribution Date (after giving effect to distributions in respect of
the Principal Remittance Amount on such Distribution Date).

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

         OVERCOLLATERALIZATION 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) For each Distribution Date
prior to and including the Distribution Date in December 2004, zero, (b) on or
after the Distribution Date in January 2005, and on each Distribution Date prior
to the Stepdown Date, an amount equal to 2.30% of the sum of the aggregate
Cut-off Date Principal Balance of the Initial Mortgage Loans and the Pre-Funded
Amount on the Closing Date and (c) on and after the Stepdown Date, an amount
equal to 4.60% 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 1-A Certificates, the
Class 1-A Pass-Through Rate; with respect to the Class 2-A-1 Certificates, the
Class 2-A-1 Pass-Through Rate; with respect to the Class 2-A-2 Certificates, the
Class 2-A-2 Pass-Through Rate; with respect to the Class 2-A-3 Certificates, the
Class 2-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, 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

                                       38

<PAGE>

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 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,
         but only if Moody's is not a Rating Agency) are then rated one of the
         two highest long-term and the highest short-term ratings of each such
         Rating Agency for such securities, or such lower ratings as each Rating

                                       39

<PAGE>

         Agency has confirmed in writing will not result in the downgrading or
         withdrawal of the rating then assigned to the Certificates by such
         Rating Agency;

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

                  (vii) securities (other than stripped bonds, stripped coupons
         or instruments sold at a purchase price in excess of 115% of the face
         amount thereof) bearing interest or sold at a discount issued by any
         corporation incorporated under the laws of the United States or any
         state thereof which, at the time of such investment, have one of the
         two highest long term ratings of each Rating Agency (except if the
         Rating Agency is Moody's, such rating shall be the highest commercial
         paper rating of S&P for any such securities) or such lower rating as
         each Rating Agency has confirmed in writing will not result in the
         downgrading or withdrawal of the rating then assigned to the
         Certificates by such Rating Agency;

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

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

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

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

                                       40

<PAGE>

without limitation, any amounts collected by the Master Servicer but not yet
deposited in the Certificate Account) may be invested in investments (other than
money market funds) treated as equity interests for Federal income tax purposes,
unless the Master Servicer shall receive an Opinion of Counsel, at the expense
of Master Servicer, to the effect that such investment will not adversely affect
the status of any such REMIC as a REMIC under the Code or result in imposition
of a tax on any such REMIC. Permitted Investments that are subject to prepayment
or call may not be purchased at a price in excess of par.

         PERMITTED TRANSFEREE: Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.

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

         PRE-FUNDING AMOUNT: The amount deposited in the Pre-Funding Account on
the Closing Date, which Pre-Funded Amount is $59,692,970.68 for Loan Group 1 and
$17,842,724.00 for Loan Group 2.

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<PAGE>

         PRE-FUNDING 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,
solely as Trustee, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-ECC1." Funds in the Pre- Funding Account 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 hereunder, provided,
however that any investment income earned from Permitted Investments made with
funds in the Pre-Funding Account will be for the account of the Depositor.

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

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

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

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

                  (i) the Mortgage Loan account number;

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

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

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

                  (v) the term of the Prepayment Charge;

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

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

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

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<PAGE>

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

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

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

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

         PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date
and a Loan Group, the sum of (i) the Principal Remittance Amount for such Loan
Group for such Distribution Date; (ii) the Extra Principal Distribution Amount
for such Loan Group for such Distribution Date; and (iii) for the first
Distribution Date after the end of the Funding Period, any amounts remaining in
the Pre- Funding Account after the end of the Funding Period (net of any
investment income therefrom) allocated to that Loan Group minus (iv) 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

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<PAGE>

in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Master Servicer in accordance with the terms
of the related Mortgage Note.

         PRINCIPAL REMITTANCE AMOUNT: (a) The sum, without duplication, of: (i)
the scheduled principal 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, with respect to the Actuarial Mortgage Loans and,
with respect to the Simple Interest Mortgage Loans, all payments received from
the borrower which are allocable to principal, (iii) the Stated Principal
Balance of each Mortgage Loan that was repurchased by the Seller or purchased by
the Master Servicer, (iv) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loans is less than the aggregate
unpaid principal balance of 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 relate to principal); less (b) all
non-recoverable Advances relating to principal and certain expenses reimbursed
during the related Due Period.

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

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

         PUD:  A Planned Unit Development.

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

         RATING AGENCY: Each of S&P, Moody's and Fitch Ratings. 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

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<PAGE>

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 Mortgage Loan will be reduced by
the amount of Subsequent Recoveries received with respect to such Liquidated
Mortgage Loan.

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

         REFERENCE BANK RATE: With respect to any Accrual Period, the arithmetic
mean (rounded upwards, if necessary, to the nearest whole multiple of 0.03125%)
of the offered rates for United States dollar deposits for one month that are
quoted by the Reference Banks as of 11:00 a.m., New York City time, on the
related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Offered Certificates on such Interest
Determination Date, provided that at least two such Reference Banks provide such
rate. If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean (rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%) of the rates quoted by one or more major banks in New York
City, selected by the Trustee, as of 11:00 a.m., New York City time, on such
date for loans in U.S. dollars to leading European banks for a period of one
month in amounts approximately equal to the aggregate Certificate Principal
Balance of the Offered Certificates on such Interest Determination Date.

         REFERENCE BANKS: Barclays Bank PLC, Deutsche Bank and NatWest, N.A.,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks

                                       45

<PAGE>

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 Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.

         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 December 2003 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. REMIC I specifically includes the
Corridor Contracts, the Net Carrryover Reserve Account and the Pre-Funding
Account.

         REMIC II 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 II Regular Interests then
outstanding and (ii) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT-AA minus the Marker Rate, divided by (b) 12.

         REMIC I REGULAR INTERESTS: REMIC I Regular Interest LT-1, REMIC I
Regular Interest LT-1PF, REMIC I Regular Interest LT-2, REMIC I Regular Interest
LT-2PF, REMIC I Regular Interest LT-P and REMIC I Regular Interest LT-R.

         REMIC I REGULAR INTEREST LT-1: 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-1PF: 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,

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<PAGE>

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

         REMIC I REGULAR INTEREST LT-2: 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-2PF: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.

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

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

         REMIC II MARKER ALLOCATION PERCENTAGE: 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-1A, REMIC II Regular
Interest LT-2A1, REMIC II Regular Interest LT-2A2, REMIC II Regular Interest
LT-2A3, REMIC II Regular Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC
II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular
Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular Interest LT-B,
REMIC II Regular Interest LT-ZZ, REMIC II Regular Interest LT-P and REMIC II
Regular Interest LT-R.

         REMIC II OVERCOLLATERALIZED AMOUNT: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC II Regular Interests minus (ii) the Uncertificated Principal Balances
of REMIC II Regular Interest LT-1A, REMIC II Regular Interest LT-2A1, REMIC II
Regular Interest LT-2A2, REMIC II Regular Interest LT-2A3, REMIC II Regular
Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC II Regular Interest
LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC
II Regular Interest LT-M6, REMIC II Regular Interest LT-B, REMIC II Regular
Interest LT-P and REMIC II Regular Interest LT-R, in each case as of such date
of determination.

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

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<PAGE>

         REMIC II 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 II Regular Interest LT-1A, REMIC II Regular Interest
LT-2A1, REMIC II Regular Interest LT-2A2, REMIC II Regular Interest LT-2A3,
REMIC II Regular Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC II
Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular
Interest LT-M5, REMIC II Regular Interest LT-M6 and REMIC II Regular Interest
LT-B and the denominator of which is the sum of the Uncertificated Principal
Balances of REMIC II Regular Interests REMIC II Regular Interest LT-1A, REMIC II
Regular Interest LT-2A1, REMIC II Regular Interest LT-2A2, REMIC II Regular
Interest LT-2A3, REMIC II Regular Interest LT-M1, REMIC II Regular Interest
LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC
II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular
Interest LT-B and REMIC II Regular Interest LT-ZZ.

         REMIC II REGULAR INTERESTS: REMIC II Regular Interest LT-1A, REMIC II
Regular Interest LT-2A1, REMIC II Regular Interest LT-2A2, REMIC II Regular
Interest LT-2A3, REMIC II Regular Interest LT-M1, REMIC II Regular Interest
LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC
II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular
Interest LT-B, REMIC II Regular Interest LT-ZZ, REMIC II Regular Interest LT-P,
REMIC II Regular Interest LT-R, REMIC II Regular Interest LT-1SUB, REMIC II
Regular Interest LT-1GRP, REMIC II Regular Interest LT-2SUB, REMIC II Regular
Interest LT-2GRP and REMIC II Regular Interest LT-XX.

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

         REMIC II REGULAR INTEREST LT-1A: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.

          REMIC II REGULAR INTEREST LT-2A1: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.

          REMIC II REGULAR INTEREST LT-2A2: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.

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<PAGE>

          REMIC II REGULAR INTEREST LT-2A3: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.

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

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

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

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

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

         REMIC II REGULAR INTEREST LT-M6: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.

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

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

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<PAGE>

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

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

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

         REMIC II REGULAR INTEREST LT-1SUB: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC II REGULAR INTEREST LT-1GRP: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC II REGULAR INTEREST LT-2SUB: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC II REGULAR INTEREST LT-2GRP: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.

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

         REMIC II REGULAR INTEREST LT-ZZ MAXIMUM INTEREST DEFERRAL AMOUNT: With
respect to any Distribution Date, the sum of (a) the excess of (i)
Uncertificated Accrued Interest calculated with the Uncertificated Pass-Through
Rate for REMIC II Regular Interest LT-ZZ and an Uncertificated Principal Balance
equal to the excess of (x) the Uncertificated Principal Balance of REMIC II
Regular Interest LT-ZZ over (y) the REMIC II Overcollateralized Amount, in each
case for such

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Distribution Date, over (ii) Uncertificated Accrued Interest on REMIC II Regular
Interest LT-1A, REMIC II Regular Interest LT-2A1, REMIC II Regular Interest
LT-2A2, REMIC II Regular Interest LT-2A3, REMIC II Regular Interest LT-M1, REMIC
II Regular Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular
Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6
and REMIC II Regular Interest LT-B, with the rate on each such REMIC II Regular
Interest subject to a cap equal to the lesser of (i) LIBOR plus the related
Margin for Corresponding Class for such REMIC II Regular Interest and (ii) the
related Net Rate Cap, and the rate on REMIC II Regular Interest LT-ZZ subject to
a cap of zero for purposes of this calculation; provided that the Uncertificated
REMIC II Pass-Through Rate and the related caps for REMIC II Regular Interest
LT-A1, REMIC II Regular Interest LT-2A1, REMIC II Regular Interest LT-2A2, REMIC
II Regular Interest LT-2A3, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6 and
REMIC II Regular Interest LT-B shall be multiplied by a fraction the numerator
of which is the actual number of days in the Accrual Period and the denominator
of which is 30.

         REMIC II SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC II
Regular Interest LT-1SUB, REMIC II Regular Interest LT-1GRP, REMIC II Regular
Interest LT-2SUB, REMIC II Regular Interest LT2-GRP and REMIC II Regular
Interest LT-XX.

         REMIC II SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each REMIC II Regular Interest ending with the designation
"SUB,", equal to the ratio among, with respect to each such REMIC II Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the Certificate Principal
Balance of the Class A Certificates, Class R Certificates and Class P
Certificates in the related Loan Group.

         REMIC III REGULAR CERTIFICATES: Any of the Class 1-A, Class 2-A-1,
Class 2-A-2, Class 2-A- 3, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, 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.

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<PAGE>

         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.

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

         REQUIRED PERCENTAGE: With respect to each Distribution Date on or after
the Stepdown Date, the fraction (expressed as a percentage) of (1) the numerator
of which is the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for the preceding Distribution Date over (b) (i) before the
Certificate Principal Balances of the Class 1-A, Class 2-A-1, Class 2-A-2 and
Class 2-A-3 Certificates have been reduced to zero, the aggregate Certificate
Principal Balance of the Class 1-A, Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates, or (ii) after the Certificate Principal Balances of the Class 1-A,
Class 2-A-1, Class 2-A-2 and Class 2-A-3 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.

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<PAGE>

         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 Balances 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 bankruptcy, foreclosure 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 Ratings Services, a division of The McGraw-Hill
Companies, Inc. or any successor thereto.

         SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan due
on any Due 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 any Distribution Date on or
prior to the August 2004 Distribution Date, an amount equal to the product of:
(a) the excess of the aggregate Stated Principal Balance of the Mortgage Loans
(including the Subsequent Mortgage Loans, if any, as of the applicable date)
plus the Pre-Funded Amount on deposit in the Pre-Funding Account at the
beginning of the related Due Period, over the aggregate Stated Principal Balance
of the Mortgage Loans (including the Subsequent Mortgage Loans, if any, as of
the applicable date) that have a scheduled payment of interest due in the
related Due Period, and (b) a fraction, the numerator of which is the weighted
average Adjusted Net Mortgage Rates of the Mortgage Loans (including the
Subsequent Mortgage Loans, if any, as of the applicable date) (weighted on the
basis of the respective Stated Principal Balances thereof) as of the beginning
of the Due Period for the related Distribution Date and the denominator of which
is 12.

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

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<PAGE>

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

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

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

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

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

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

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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 Class 1-A, Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates
is reduced to zero and (ii) the later to occur of (a) the Distribution Date in
July 2007 or (b) the first Distribution Date on which the aggregate Certificate
Principal Balance of the Class 1-A, Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates (after calculating anticipated distributions on such Distribution
Date) is less than or equal to 62.90% of the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date.

         SUBORDINATED CORRIDOR CONTRACT: The transaction evidenced by the
Confirmation and Agreement for the benefit of the Subordinate Certificateholders
(as assigned to the Trustee pursuant to the Subordinated Corridor Contract
Assignment Agreement), a form of which is attached hereto as Exhibit R.

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

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

         SUBORDINATED CORRIDOR CONTRACT TERMINATION DATE: The Distribution Date
in November 2010.

         SUBORDINATED CONFIRMATION AND AGREEMENT: The Confirmation and Agreement
dated June 17, 2004, reference number 2000005044353, evidencing the Subordinated
Corridor Contract.

         SUBORDINATE CERTIFICATES: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6 and Class B Certificates.

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

         SUBSEQUENT CUT-OFF DATE: As defined in the definition of Cut-off Date.

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<PAGE>

         SUBSEQUENT MORTGAGE LOAN: Any Mortgage Loan conveyed to the Trust Fund
pursuant to Section 2.01(b) on a Subsequent Transfer Date, and listed on the
related Loan Number and Borrower Identification Mortgage Loan Schedule delivered
pursuant to Section 2.01(f). When used with respect to a single Subsequent
Transfer Date, "Subsequent Mortgage Loan" shall mean a Subsequent Mortgage Loan
conveyed to the Trust Fund on such Subsequent Transfer Date.

         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.

         SUBSEQUENT TRANSFER AGREEMENT: A Subsequent Transfer Agreement
substantially in the form of Exhibit Q hereto, executed and delivered by the
Seller, the Depositor and the Trustee as provided in Section 2.01(d).

         SUBSEQUENT TRANSFER DATE: For any Subsequent Transfer Agreement, the
"Subsequent Transfer Date" identified in such Subsequent Transfer Agreement;
provided, however, the Subsequent Transfer Date for any Subsequent Transfer
Agreement may not be a date earlier than the date on which the Subsequent
Transfer Agreement is executed and delivered by the parties thereto pursuant to
Section 2.01(d).

         SUBSEQUENT TRANSFER DATE AGGREGATE PURCHASE AMOUNT: With respect to any
Subsequent Transfer Date, the "Subsequent Transfer Date Aggregate Purchase
Amount" identified in the related Subsequent Transfer Agreement which shall be
an estimate of the aggregate Stated Principal Balances of the Subsequent
Mortgage Loans identified in such Subsequent Transfer Agreement.

         SUBSEQUENT TRANSFER DATE AGGREGATE TRANSFER AMOUNT: With respect to any
Subsequent Transfer Date, the aggregate Stated Principal Balances as of the
related Subsequent Cut-off Dates of the Subsequent Mortgage Loans conveyed on
such Subsequent Transfer Date, as listed on the related Loan Number and Borrower
Identification Mortgage Loan Schedule delivered pursuant to Section 2.01(f);
provided, however, that such amount shall not exceed the amount on deposit in
the Pre-Funding Account.

         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.

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<PAGE>

         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 after the Stepdown
Date, either a Delinquency Trigger Event or a Cumulative Loss Trigger Event.

         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 Pre-Funding Account, the
Carryover Reserve Fund and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) the Corridor 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 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 sum of (i) the Pool Stated
Principal Balance plus (ii) any amounts remaining in the Pre-Funding Account
(excluding any investment earnings thereon) with respect to such Distribution
Date.

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

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         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 Regular Interests for any Distribution Date:

                  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 (i) with respect to the Group I
Mortgage Loans, to REMIC I Regular Interest LT-1 and REMIC I Regular Interest
LT-1PF, in each case to the extent of one month's interest at the then
applicable respective Uncertificated REMIC I Pass- Through Rate on the
respective Uncertificated Principal Balance of each such Uncertificated REMIC I
Interest; provided, however, with respect to the first two Distribution Dates,
such amounts relating to the Initial Group I Mortgage Loans shall be allocated
to REMIC I Regular Interest LT-1 and such amounts relating to the Subsequent
Group I Mortgage Loans shall be allocated to REMIC I Regular Interest LT-1PF and
(ii) with respect to the Group 2 Mortgage Loans, to REMIC I Regular Interest
LT-2 and REMIC I Regular Interest LT-2PF, in each case to the extent of one
month's interest at the then applicable respective Uncertificated REMIC I
Pass-Through Rate on the respective Uncertificated Principal Balance of each
such Uncertificated REMIC I Interest; provided, however, with respect to the
first two Distribution Dates, such amounts relating to the Initial Group 2
Mortgage Loans shall be allocated to REMIC I Regular Interest LT-2 and such
amounts relating to the Subsequent Group 2 Mortgage Loans shall be allocated to
REMIC I Regular Interest LT2PF.

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

         (A) The REMIC II Marker Allocation Percentage of the aggregate amount
of any Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first, to Uncertificated Accrued Interest payable to REMIC II
Regular Interest LT-AA and REMIC II Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC II Interest Loss Allocation Amount, 98% and 2%,
respectively, and thereafter among REMIC II Regular Interest LT-AA, REMIC II
Regular Interest LT-A1, REMIC II Regular Interest LT-2A1, REMIC II Regular
Interest LT-2A2, REMIC II Regular Interest LT-2A3, REMIC II Regular Interest
LT-M1, REMIC II Regular Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC
II Regular Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular
Interest LT-M6, REMIC II Regular Interest LT-B, REMIC II Regular Interest LT-ZZ,
pro rata based on, and to the extent of, one month's interest at the then
applicable

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<PAGE>

respective REMIC II Pass-Through Rate on the respective Uncertificated Principal
Balance of each such REMIC II Regular Interest; and

         (B) The REMIC II Sub WAC Allocation Percentage of the aggregate amount
of any Prepayment Interest Shortfalls (to the extent not covered by payments by
Compensating Interest) incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC II Regular Interest LT-1SUB, REMIC II Regular Interest LT-1GRP,
REMIC II Regular Interest LT-2SUB, REMIC II Regular Interest LT-2GRP and REMIC
II Regular Interest LT-XX, pro rata based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC II Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC II
Regular Interest.

         UNCERTIFICATED PASS-THROUGH RATE: The Uncertificated REMIC I
Pass-Through Rate or Uncertificated REMIC II 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 1 PASS-THROUGH RATE: With respect to REMIC I
Regular Interest LT- 1, REMIC I Regular Interest LT-P and REMIC I Regular
Interest LT-R, and (i) the first two Distribution Dates, the weighted average of
the Adjusted Net Mortgage Rates of the Initial Group 1 Mortgage Loans and (ii)
thereafter, the weighted average of the Adjusted Net Mortgage Rates of the Group
1 Mortgage Loans. With respect to REMIC I Regular Interest LT-2, and (i) the
first two Distribution Dates, the weighted average of the Adjusted Net Mortgage
Rates of the Initial Group 2 Mortgage Loans and (ii) thereafter, the weighted
average of the Adjusted Net Mortgage Rates of the Group 2 Mortgage Loans. With
respect to REMIC I Regular Interest LT-1PF and (i) the first two Distribution
Dates, 0.00% and (ii) thereafter, the weighted average of the Adjusted Net
Mortgage Rates of the Group 1 Mortgage Loans. With respect to REMIC I Regular
Interest LT2PF and (i) the first two Distribution Dates, 0.00% and (ii)
thereafter, the weighted average of the Adjusted Net Mortgage Rates of the Group
2 Mortgage Loans.

         UNCERTIFICATED REMIC II PASS-THROUGH RATE: With respect to REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-A1, REMIC II Regular
Interest LT-2A1, REMIC II Regular Interest LT-2A2, REMIC II Regular Interest
LT-2A3, REMIC II Regular Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC
II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular
Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular Interest LT-B,
REMIC I Regular Interest LT-ZZ, REMIC I Regular Interest LT-P, REMIC I Regular
Interest LT-AR, REMIC I Regular Interest LT-1SUB, REMIC I Regular Interest
LT-2SUB and REMIC I

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<PAGE>

Regular Interest LT-XX, the weighted average of the Uncertificated REMIC I
Pass-Through Rate on each REMIC I Regular Interest, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC I Regular Interest. With
respect to REMIC I Regular Interest LT-1GRP, the weighted average of the
Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LT-1, REMIC
I Regular Interest LT-1PF, REMIC I Regular Interest LT-P and REMIC I Regular
Interest LT-R and with respect REMIC I Regular Interest LT-2GRP, the weighted
average of Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest
LT-2 and REMIC I Regular Interest LT-2PF, in each case, weighted on the basis of
the Uncertificated Principal Balance of each such REMIC I Regular Interest.

         UNCERTIFICATED REGULAR INTERESTS: The REMIC I Regular Interests and
REMIC II Regular Interests.

         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 the increase in the related Certificate Principal Balance due to the
receipt of Subsequent Recoveries.

         UNUSED PRE-FUNDED AMOUNT: The Pre-Funded Amount immediately after the
end of the Funding Period.

         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.

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<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

         Section 2.01 Conveyance of Mortgage Loans.

         (a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to the Initial Mortgage Loans, including all
interest and principal received and receivable by the Seller on or with respect
to the Initial Mortgage Loans after the Initial Cut-off Date (to the extent not
applied in computing the Initial 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 Initial
Mortgage Loans on or prior to the Initial Cut-off Date and interest accruing
prior to the Initial 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 Initial 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 Initial Mortgage Loans.

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

         (b) Subject to the execution and delivery of the related Subsequent
Transfer Agreement as provided by Section 2.01(d) and the terms and conditions
of this Agreement, the Seller sells, transfers, assigns, sets over and otherwise
conveys to the Depositor, without recourse, on each Subsequent Transfer Date,
all the right, title and interest of the Seller in and to the related Subsequent
Mortgage Loans, including all interest and principal received and receivable by
the Seller on or with respect to such Subsequent Mortgage Loans after the
related Subsequent 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 Subsequent Certificate Account Deposit as provided in
this Agreement, other than principal due on such Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date and interest accruing prior to the
related Subsequent Cut-off Date.

         Immediately upon the conveyance of the Subsequent 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
Subsequent Mortgage Loans.

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<PAGE>

         (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) On any Business Day during the Funding Period designated to the
Trustee by the Seller, the Seller, the Depositor and the Trustee shall complete,
execute and deliver a Subsequent Transfer Agreement. After the execution and
delivery of such Subsequent Transfer Agreement, on the Subsequent Transfer Date,
the Trustee shall set aside in the Pre-Funding Account an amount equal to the
related Subsequent Transfer Date Aggregate Purchase Amount.

         (e) The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the satisfaction of each of the following
conditions:

                  (i) the Trustee and the Underwriter will each be provided
         Opinions of Counsel addressed to the Rating Agencies as with respect to
         the sale of the Subsequent Mortgage Loans conveyed on such Subsequent
         Transfer Date (such opinions being substantially similar to the
         opinions delivered on the Closing Date to the Rating Agencies with
         respect to the sale of the Initial Mortgage Loans on the Closing Date),
         to be delivered as provided in Section 2.01(f);

                  (ii) the execution and delivery of such Subsequent Transfer
         Agreement or conveyance of the related Subsequent Mortgage Loans does
         not result in a reduction or withdrawal of the any ratings assigned to
         the Certificates by the Ratings Agencies;

                  (iii) the Depositor shall deliver to the Trustee an Officer's
         Certificate confirming the satisfaction of each of the conditions set
         forth in this Section 2.01(e) required to be satisfied by such
         Subsequent Transfer Date;

                  (iv) each Subsequent Mortgage Loan conveyed on such Subsequent
         Transfer Date satisfies the representations and warranties applicable
         to it under this Agreement, provided, however, that with respect to a
         breach of a representation and warranty with respect to a Subsequent
         Mortgage Loan set forth in this clause (iv), the obligation under
         Section 2.03(e) of this Agreement of the Seller to cure, repurchase or
         replace such Subsequent Mortgage Loan shall constitute the sole remedy
         against the Seller respecting such breach available to
         Certificateholders, the Depositor or the Trustee;

                  (v) the Subsequent Mortgage Loans conveyed on such Subsequent
         Transfer Date were selected in a manner reasonably believed not to be
         adverse to the interests of the Certificateholders;

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<PAGE>

                  (vi) no Subsequent Mortgage Loan conveyed on such Subsequent
         Transfer Date was 60 or more days delinquent;

                  (vii) following the conveyance of the Subsequent Mortgage
         Loans on such Subsequent Transfer Date, the characteristics of the
         Mortgage Loans will not vary by more than 10% from the characteristics
         listed below; provided that for the purpose of making such
         calculations, the characteristics for any Initial Mortgage Loan made
         will be taken as of the Initial Cut-off Date and the characteristics
         for any Subsequent Mortgage Loans will be taken as of the Subsequent
         Cut-off Date:

<TABLE>
<CAPTION>
                                                            LOAN GROUP 1           LOAN GROUP 2
                                                            ------------           ------------
<S>                                                           <C>                    <C>
Average Stated Principal Balance......................        $182,742               $397,547
Weighted Average Mortgage Rate........................               7.1                    6.7
                                                                   02%                    22%
Weighted Average Loan-to-Value Ratio..................              78.1                   79.9
                                                                    2%                     1%
Weighted Average Remaining Term to Maturity...........      356 months             357 months
Weighted Average Credit Bureau
Risk Score............................................             606                    633
Mortgage Loans with Prepayment Penalties at                         78.1                   84.7
Origination...........................................              1%                     1%
Aggregate Principal Balance of Fixed Rate                 $101,695,217            $26,948,695
Mortgage Loans........................................
Aggregate Principal Balance of Adjustable Rate            $246,611,812            $77,208,581
Mortgage Loans........................................
</TABLE>

                  (viii) neither the Seller nor the Depositor is insolvent and
         neither the Seller nor the Depositor will be rendered insolvent by the
         conveyance of Subsequent Mortgage Loans on such Subsequent Transfer
         Date; and

                  (ix) the Trustee and the Underwriter will each be provided
         with an Opinion of Counsel, which Opinion of Counsel shall not be at
         the expense of either the Trustee or the Trust Fund, addressed to the
         Trustee, to the effect that such purchase of Subsequent Mortgage Loans
         will not (i) result in the imposition of the tax on "prohibited
         transactions" on the Trust Fund or contributions after the Startup
         Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
         respectively or (ii) cause the Trust Fund to fail to qualify as a
         REMIC, such opinion to be delivered as provided in Section 2.01(f).

                                       63

<PAGE>

                  (x) The Trustee shall not be required to investigate or
         otherwise verify compliance with these conditions, except for its own
         receipt of documents specified above, and shall be entitled to rely on
         the required Officer's Certificate.

         (f) Within five Business Days after each Subsequent Transfer Date, upon
(1) delivery to the Trustee by the Depositor of the Opinions of Counsel referred
to in Section 2.01(e)(i) and (e)(ix), (2) delivery to the Trustee by the Seller
of a Loan Number and Borrower Identification Mortgage Loan Schedule reflecting
the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date and (3)
delivery to the Trustee by the Depositor of an Officer's Certificate confirming
the satisfaction of each of the conditions precedent set forth in this Section
2.01(f), the Trustee shall pay the Seller the Subsequent Transfer Date Aggregate
Transfer Amount from such funds that were set aside in the Pre-Funding Account
pursuant to Section 2.01(d). On the Business Day preceding the Distribution Date
next following such Subsequent Transfer Date, the Trustee shall deposit the
Capitalized Interest Account Requirement with respect to the Subsequent Mortgage
Loans in the Distribution Account. The positive difference, if any, between the
Subsequent Transfer Date Aggregate Transfer Amount and the Subsequent Transfer
Date Aggregate Purchase Amount shall be re-invested by the Trustee in the
Pre-Funding Account.

         The Trustee shall not be required to investigate or otherwise verify
compliance with the conditions set forth in the preceding paragraph, except for
its own receipt of documents specified above, and shall be entitled to rely on
the required Officer's Certificate.

         (g) Within thirty days after each Subsequent Transfer Date, the
Depositor shall deliver to the Trustee a letter of a nationally recognized firm
of independent public accountants stating whether or not the Subsequent Mortgage
Loans conveyed on such Subsequent Transfer Date conform to the characteristics
described in Section 2.01(e)(vi) and (vii).

         (h) 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;

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<PAGE>

                  (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-ECC1, CWABS, Inc., by The Bank
         of New York, a New York banking corporation, as trustee under the
         Pooling and Servicing Agreement dated as of June 1, 2004, without
         recourse" (each such assignment, when duly and validly completed, to be
         in recordable form and sufficient to effect the assignment of and
         transfer to the assignee thereof, under the Mortgage to which such
         assignment relates);

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

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

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

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

                                       65

<PAGE>

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 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

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<PAGE>

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 (in the case of the Initial Mortgage Loans)
or Subsequent Transfer Date (in the case of the Subsequent Mortgage Loans), 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 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

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<PAGE>

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 Initial Mortgage Loans) or the Subsequent
Transfer Date (in the case of the Subsequent Mortgage Loans), the Trustee shall,
in accordance with the provisions of Section 2.02, send a Delay Delivery
Certification substantially in the form annexed hereto as Exhibit G-3 (with any
applicable exceptions noted thereon) for all Delay Delivery Mortgage Loan
delivered within thirty (30) days after such date. The Trustee will promptly
send a copy of such Delay Delivery Certification to each Rating Agency.

         Section 2.02 Acceptance of the Mortgage Loans.

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

         The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Master Servicer and the Seller an Initial Certification
substantially in the form annexed hereto as Exhibit G 1 to the effect that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), the documents described in
Section 2.01(g)(i) and, in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the documents described in Section 2.01(g)(iii), with respect to
such Mortgage Loan are in the Trustee's possession, and based on its review and
examination and only as to the foregoing documents, such documents appear
regular on their face and relate to such Mortgage Loan. The Trustee agrees to
execute and deliver within 30 days after the Closing Date to the Depositor, the
Master Servicer and the Seller an Interim Certification substantially in the
form annexed hereto as Exhibit G-2 to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as not
covered by such certification), all documents required to be delivered to the
Trustee pursuant to this Agreement with respect to such Mortgage Loan are in its
possession (except those described in Section 2.01(g)(vi)) and based on its
review and examination and only as to the foregoing documents, (i) such
documents appear regular on their face and relate to such Mortgage Loan, and
(ii) the information set forth in items (i), (iv), (v), (vi), (viii), (xi) and
(xiv) of the definition of the "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. On or before the thirtieth (30th)
day after the Closing Date (or if such thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee shall deliver to the Depositor, the Master
Servicer and the Seller a Delay Delivery Certification with respect to the
Mortgage Loans substantially in the form annexed hereto as Exhibit G-3, with any
applicable exceptions noted thereon. The Trustee shall be under no duty or
obligation to inspect, review or examine such documents, instruments,
certificates or other papers to determine that the same are

                                       68

<PAGE>

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.

         (b) The Trustee agrees to execute and deliver on the Subsequent
Transfer Date to the Depositor, the Master Servicer and the Seller an Initial
Certification substantially in the form annexed hereto as Exhibit G-4 to the
effect that, as to each Subsequent Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Subsequent Mortgage Loan paid in full or any Subsequent
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 Subsequent Mortgage Loan
are in its 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 Subsequent Mortgage Loan.

         The Trustee agrees to execute and deliver within 30 days after the
Subsequent Transfer 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 Subsequent Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Subsequent Mortgage Loan paid in full or any Subsequent
Mortgage Loan specifically identified in such certification as not covered by
such certification), all documents required to be delivered to it pursuant to
this Agreement with respect to such Subsequent 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 Subsequent Mortgage
Loan, and (ii) the information set forth in items (i), (iv), (v), (vi), (viii)
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 Subsequent Transfer 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 Subsequent Mortgage Loans substantially in the form annexed
hereto as Exhibit G-3, with any applicable exceptions noted thereon, together
with a Subsequent Certification substantially in the form annexed hereto as
Exhibit G-4. The Trustee, as applicable, 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 Subsequent Transfer Date, the Trustee
shall deliver to the Depositor, the Master Servicer, the Seller and to any
Certificateholder or Certificate Owner that so requests a Final Certification
with respect to the Subsequent Mortgage Loans substantially in the form annexed
hereto as Exhibit H-1, with any applicable exceptions noted thereon.

         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 or Certificate Owner that so requests)

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<PAGE>

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.

         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.

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         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.

         In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date (in the case of Initial Mortgage Loans) or
Subsequent Transfer Date (in the case of Subsequent Mortgage Loans) 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.

         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 Initial Mortgage Loans, and the related Subsequent Transfer Date
with respect to the Subsequent 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.

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

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

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

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

                        (vii) The Master Servicer is a member of MERS in good
            standing, and will comply in all material respects with the rules
            and procedures of MERS in connection with the servicing of the
            Mortgage Loans for as long as such Mortgage Loans are registered
            with MERS.

            (b) The Seller hereby represents and warrants to the Depositor, the
Master Servicer and the Trustee as of the Initial Cut-off Date in the case of
the Initial Mortgage Loans and as of the related Subsequent Cut-off Date in the
case of the Subsequent Mortgage Loans (unless otherwise

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indicated or the context otherwise requires, percentages with respect to the
Initial Mortgage Loans in a Loan Group are measured by the Initial Cut-off Date
Principal Balance of the Mortgage Loans in the related Loan Group):

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

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

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

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                        (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 Initial Mortgage Loan is true and correct in
            all material respects as of the Closing Date.

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

                        (ix) None of the Initial 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.

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                        (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 or Subsequent Transfer
            Date, as applicable, to the best of Seller's knowledge, each
            Mortgaged Property is free of material damage and is in good repair.

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

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

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

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

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

                        (xxii) The Mortgage Note and the related Mortgage are
            genuine, and each is the legal, valid and binding obligation of the
            maker thereof, enforceable in accordance with its terms and under
            applicable law, except that (a) the enforceability thereof may be
            limited by bankruptcy, insolvency, moratorium, receivership and
            other similar laws relating to creditors' rights generally and (b)
            the remedy of specific performance and injunctive and other forms of
            equitable relief may be subject to equitable defenses and to the
            discretion of the court before which any proceeding therefor may be
            brought. To the best of the Seller's knowledge, all parties to the
            Mortgage Note and the Mortgage had legal capacity to execute the
            Mortgage Note and the Mortgage and each Mortgage Note and Mortgage
            have been duly and properly executed by such parties.

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

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

                        (xxv) With respect to each Mortgage constituting a deed
            of trust, a trustee, duly qualified under applicable law to serve as
            such, has been properly designated and currently so serves and is
            named in such Mortgage, and no fees or expenses are or will

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            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 10.35% and 1.85% and
            of the Initial Mortgage Loans in Loan Group 1 and Loan Group 2,
            respectively, are secured by two- to four-family dwellings. No more
            than approximately 5.54% and 4.53% of the Initial Mortgage Loans in
            Loan Group 1 and Loan Group 2, respectively, are secured by
            condominium units. No more than approximately 0.49% and 0.39% of the
            Initial Mortgage Loans in Loan Group 1 and Loan Group 2,
            respectively, are secured by high rise condominium units. No less
            than approximately 77.67% and 83.75% of the Initial Mortgage Loans
            in Loan Group 1 and Loan Group 2, respectively, are secured by
            single family detached dwellings. None of the Initial Mortgage Loans
            in Loan Group 1 and Loan Group 2 are secured by manufactured
            housing. No more than approximately 5.09% and 8.04% of the Initial
            Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are
            secured by PUDs.

                        (xxxiii) No Initial Mortgage Loan in Loan Group 1 and
            Loan Group 2 had a principal balance in excess of $577,500 and
            $750,000, respectively, at origination.

                        (xxxiv) To the extent required under applicable law,
            each originator and subsequent mortgagee or servicer of the Mortgage
            Loan complied with all licensing requirements and was authorized to
            transact and do business in the jurisdiction in which the related
            Mortgaged Property is located at all times when it held or serviced
            the

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            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 Initial Mortgage Loan was originated on or
            after March 8, 2004;

                        (xxxvi) Each Two-Year Hybrid Mortgage Loan had an
            initial Adjustment Date no later than July 1, 2006; each Three-Year
            Hybrid Mortgage Loan had an initial Adjustment Date no later than
            July 1, 2007.

                        (xxxvii) Approximately 78.11% and 84.21% of the Initial
            Mortgage Loans in Loan Group 1 and Loan Group 2, respectively,
            provide for a prepayment penalty.

                        (xxxviii) On the basis of representations made by the
            Mortgagors in their loan applications, no less than approximately
            93.80% and 96.69% of the owner-occupied Initial Mortgage Loans in
            Loan Group 1 and Loan Group 2, respectively, are secured by
            owner-occupied Mortgaged Properties that are primary residences and
            no more than approximately 0.15% and 1.00% of the owner-occupied
            Initial Mortgage Loans in Loan Group 1 and Loan Group 2,
            respectively, 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,

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            and the Seller has received no notice that any premiums due and
            payable thereon have not been paid; the Mortgage obligates the
            Mortgagor thereunder to maintain all such insurance, including flood
            insurance, at the Mortgagor's cost and expense, and upon the
            Mortgagor's failure to do so, authorizes the holder of the Mortgage
            to obtain and maintain such insurance at the Mortgagor's cost and
            expense and to seek reimbursement therefor from the Mortgagor.

                        (xl) If the Mortgaged Property is in an area identified
            in the Federal Register by the Federal Emergency Management Agency
            as having special flood hazards, a flood insurance policy in a form
            meeting the requirements of the current guidelines of the Flood
            Insurance Administration is in effect with respect to such Mortgaged
            Property with a 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 August 1, 2004 with respect to the Initial
            Mortgage Loans and on or prior to September 1, 2004 with respect to
            the Subsequent Mortgage Loans.

                        (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

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            not exceed the original principal amount of the Mortgage Loan. The
            Mortgage Note does not permit or obligate the Master Servicer to
            make future advances to the Mortgagor at the option of the
            Mortgagor.

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

                        (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 Initial Mortgage
            Loans in Loan Group 1 as of the Cut-off Date ranged from 3.740% per
            annum to 12.640% per annum and the weighted average Mortgage Rate as
            of the Cut-off Date was 7.102% per annum. The Mortgage Rates borne
            by the Initial Mortgage Loans in Loan Group 2 as of the Cut-off Date
            ranged from 4.250% per annum to 10.640% per annum and the weighted
            average Mortgage Rate as of the Cut-off Date was 6.722% 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.

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                        (lii) The Gross Margins on the Adjustable Rate Mortgage
            Loans that are Initial Mortgage Loans in Loan Group 1 range from
            approximately 4.60% to 7.250% and the weighted average Gross Margin
            was approximately 6.231%. The Gross Margins on the Adjustable Rate
            Mortgage Loans that are Initial Mortgage Loans in Loan Group 2 range
            from approximately 4.500% to 7.400% and the weighted average Gross
            Margin was approximately 6.175%.

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

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

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

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

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

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            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 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

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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 such instruments of transfer or
assignment as have been prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the Seller, or its respective
designee, title to the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.

            For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Replacement Mortgage Loans as of the date of substitution is
less than the Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due (in the case of Actuarial Mortgage Loans)
in the month of substitution) of all such Deleted Mortgage Loans. An amount
equal to the aggregate of the deficiencies described in the preceding sentence
(such amount, the "Substitution Adjustment Amount") shall be forwarded by the
Seller to the Master Servicer and deposited by the Master Servicer into the
Certificate

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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.

                        (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.

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                        (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 or Subsequent Transfer
Date, as applicable, 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 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

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material respects and, if such breach is not so cured, shall repurchase or
replace the affected Mortgage Loan or Loans in accordance with the procedure set
forth in Section 2.03(c).

            Section 2.05 Delivery of Opinion of Counsel in Connection with
                         Substitutions and Repurchases.

            (a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee an Opinion of Counsel, addressed to the
Trustee, to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding. Any
Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such loan and
(b) receipt by the Trustee of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.

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

            Section 2.06 Authentication and Delivery of Certificates.

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

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            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 the 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

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

            In accordance with the standards of the preceding paragraph, the
Master Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.

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

            Section 3.02 Subservicing; Enforcement of the Obligations of Master
                         Servicer.

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

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

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            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.

            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; Pre-Funding 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

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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.

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

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

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

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

                        (iv) all Compensating Interest;

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

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

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

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

                        (ix) the Seller Shortfall Interest Requirement;

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                        (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 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);

                        (ii) the amount, if any, remaining in the Pre-Funding
            Account at the end of the Funding Period; and

                        (iii) 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.

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            (d) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Pre-Funding Account. On the Closing Date the Seller
shall remit the Pre-Funded Amount to the Trustee for deposit in the Pre-Funding
Account.

            On each Subsequent Transfer Date, upon satisfaction of the
conditions in Section 2.01(e), the Trustee shall withdraw from the Pre-Funding
Account 100% of the aggregate of the Cut-off Date Principal Balances of the
Subsequent Mortgage Loans sold to the Trust Fund on the Subsequent Transfer Date
and pay that amount to the order of the Seller.

            On the Business Day before the Distribution Date following the end
of the Funding Period, the Trustee shall (i) withdraw the Unused Pre-Funded
Amount from the Pre-Funding Account, (ii) promptly deposit such amount in the
Distribution Account, and (iii) distribute such amount to the Certificates on
the Distribution Date pursuant to Section 4.04.

            The amount deposited in the Distribution Account pursuant to the
preceding paragraph shall be net of any investment earnings on the amounts on
deposit in the Pre-Funding Account.

            (e) No later than 1:00 p.m. Pacific time on the Business Day prior
to each Master Servicer Advance Date, 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.

            (f) Each institution that maintains the Certificate Account, the
Distribution Account or the Pre-Funding 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 and the Pre-Funding 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
(i) Certificate Account, the Distribution Account and the Pre-Funding 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 and (ii) the Pre-Funding
Account, all income and gain net of any losses realized from any such investment
shall be for the benefit of the Seller and shall be remitted to the Seller as
provided herein. The amount of any losses incurred in the Certificate Account or
the Distribution Account in respect of any such investments shall be deposited
by the Master Servicer in the

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Certificate Account or paid to the Trustee for deposit into the Distribution
Account out of the Master Servicer's own funds immediately as realized. The
amount of any losses incurred in the Pre-Funding Account in respect of any such
investments shall be paid by the Seller to the Trustee for deposit into the
Pre-Funding Account out of the Seller'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 Pre-Funding 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 Pre-Funding Account, the Class P
Distribution Account, the Carryover Reserve Fund prior to any change thereof.

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

            Section 3.06 Collection of Taxes, Assessments and Similar Items;
                         Escrow Accounts.

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

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            Section 3.07 Access to Certain Documentation and Information
                         Regarding the Mortgage Loans.

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

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

            Section 3.08 Permitted Withdrawals from the Certificate Account,
                         Distribution Account and the Carryover Reserve Fund.

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

                        (i) to pay to the Master Servicer (to the extent not
            previously paid to or withheld by the Master Servicer), as servicing
            compensation in accordance with Section 3.15, that portion of any
            payment of interest that equals the Servicing Fee for the period
            with respect to which such interest payment was made, and, as
            additional servicing compensation, those 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;

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                        (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 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 each Loan Group 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

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paragraph of Section 8.11). In addition, the Trustee may from time to time make
withdrawals from the Distribution Account for the following purposes:

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

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

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

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

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

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

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

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            Section 3.09 [Reserved.]

            Section 3.10 Maintenance of Hazard Insurance.

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

            Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
                         Agreements.

            (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

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conditions contained in the Mortgage Note and Mortgage related thereto and the
consent of the mortgagee under such Mortgage Note or Mortgage is not otherwise
so required under such Mortgage Note or Mortgage as a condition to such
transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Master Servicer shall not be deemed to be in
default under this Section 3.11(a) by reason of any transfer or assumption that
the Master Servicer reasonably believes it is restricted by law from preventing.

            (b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall prepare
and deliver or cause to be prepared and delivered to the Trustee for signature
and shall direct, in writing, the Trustee to execute the assumption agreement
with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Maximum Mortgage Rate, the Minimum Mortgage Rate, the Gross Margin,
the Periodic Rate Cap, the Adjustment Date and any other term affecting the
amount or timing of payment on the Mortgage Loan) may be changed. In addition,
the substitute Mortgagor and the 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.

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            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 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

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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 any REMIC 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 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

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

            The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of liquidation proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second,
to reimburse the Master Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount) on the Mortgage Loan or
related REO Property, at the Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan.

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

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

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delivered to the Trustee an Officer's Certificate of a Servicing Officer
certifying as to the name and address of the Person to which the Mortgage File
or the documents therein were delivered and the purpose or purposes of such
delivery.

            Section 3.14 Documents, Records and Funds in Possession of Master
                         Servicer to be Held for the Trustee.

            Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds, Subsequent Recoveries
or Insurance Proceeds in respect of any Mortgage Loan. All Mortgage Files and
funds collected or held by, or under the control of, the Master Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including but not limited to,
any funds on deposit in the Certificate Account, shall be held by the Master
Servicer for and on behalf of the Trust Fund and shall be and remain the sole
and exclusive property of the Trust Fund, subject to the applicable provisions
of this Agreement. The Master Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Certificate Account, Distribution Account or Carryover Reserve Fund or in any
Escrow Account (as defined in Section 3.06), or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the Master
Servicer shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Master Servicer under this
Agreement.

            Section 3.15 Servicing Compensation.

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

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

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and shall not be entitled to reimbursement therefor except as specifically
provided in Sections 3.08 and 3.12 hereof.

            Section 3.16 Access to Certain Documentation.

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

            Section 3.17 Annual Statement as to Compliance.

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

            Section 3.18 Annual Independent Public Accountants' Servicing
                         Statement; Financial Statements.

            On or before the later of (i) the 80th day after the end of the
Master Servicer's fiscal year, commencing with its 2004 fiscal year or (ii)
within 30 days of the issuance of the annual audited financial statements
beginning with the audit for the period ending in 2003, 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,

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Depositor and the Seller in compliance with the Uniform Single Attestation
Program for Mortgage Bankers. Copies of such report shall be provided by the
Trustee to any Certificateholder upon request at the Master Servicer's expense,
provided such report is delivered by the Master Servicer to the Trustee. Upon
written request, the Master Servicer shall provide to the Certificateholders its
publicly available annual financial statements (or, for so long as Countrywide
Home Loans Servicing LP is the Master Servicer hereunder, the Master Servicer's
parent company's publicly available annual financial statements), if any,
promptly after they become available.

            Section 3.19 The Corridor Contracts.

            The Seller shall assign all of its right, title and interest in and
to the interest rate cap transactions evidenced by the Corridor Contracts to,
and shall cause all of its obligations in respect of such transaction to be
assumed by, the Trustee on behalf of the Trust Fund, on the terms and conditions
set forth in the Corridor Contract Assignment Agreement. The Corridor Contracts
will be assets of the Trust Fund but will not be assets of any REMIC. The Master
Servicer, on behalf of the Trustee, shall deposit any amounts received from time
to time with respect to the Corridor 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 Corridor Contract Assignment Agreements
and shall be fully protected in relying thereon. The representations made by the
Bank of New York as Assignee under the Corridor Contract Assignment Agreements
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 Corridor Contracts.

            The Master Servicer, on behalf of the Trustee, shall act as
calculation agent and/or shall terminate the Corridor 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 Corridor Contract
Counterparty will be obligated to pay the Trustee or the Master Servicer for the
benefit of the Trust Fund an amount in respect of such termination. Any amounts
received by the Trustee or the Master Servicer for the benefit of the Trust
Fund, as the case may be, in respect of such termination shall be deposited and
held in the Carryover Reserve Fund to pay Net Rate Carryover for the 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 Corridor Contract Termination Date. On the related
Corridor Contract Termination Date, after all other distributions on such date,
if any such amounts in respect of early termination remain in the Carryover
Reserve Fund, such amounts shall be distributed by the Trustee to the Class C
Certificateholder.

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            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
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

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

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

            Section 4.02 Reduction of Servicing Compensation in Connection with
                         Prepayment Interest Shortfalls.

            In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Master Servicer shall, to the extent of the Compensating
Interest for such Distribution Date, deposit into the Certificate Account, as a
reduction of the Servicing Fee 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) concurrently

                                    (A) from the Interest Funds for Loan Group 1
                        (and after the distribution of Interest Funds from Loan
                        Group 2 as provided in clause (B) below, from Interest
                        Funds for Loan Group 2), to the Class 1-A Certificates,
                        the Class 1-A Current Interest and any Class 1-A
                        Interest Carry Forward Amount, and

                                    (B) from the Interest Funds for Loan Group 2
                        (and after the distribution of Interest Funds from Loan
                        Group 1 as provided in clause (A) above, from Interest
                        Funds for Loan Group 1), to the Class 2-A-1, Class 2-A-2

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                        and Class 2-A-3 Certificates, pro rata, based on their
                        respective entitlements, the Current Interest and any
                        Interest Carry Forward Amount for each such Class;

                        (ii) from Interest Funds for both Loan Groups, to the
            Class M-1 Certificates, the Current Interest for such Class;

                        (iii) from the Interest Funds for both Loan Groups to
            the Class M-2 Certificates, the Current Interest for such Class;

                        (iv) from the Interest Funds for both Loan Groups to the
            Class M-3 Certificates, the Current Interest for such Class;

                        (v) from the Interest Funds for both Loan Groups to the
            Class M-4 Certificates, the Current Interest for such Class;

                        (vi) from the Interest Funds for both Loan Groups to the
            Class M-5 Certificates, the Current Interest for such Class;

                        (vii) from the Interest Funds for both Loan Groups to
            the Class M-6 Certificates, the Current Interest for such Class;

                        (viii) from the Interest Funds for both Loan Groups to
            the Class B Certificates, the Current Interest for such Class; and

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

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

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

            (d) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date with respect to each Loan Group 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:

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

                                    (A) concurrently, (i) from the Principal
                        Distribution Amount for Loan Group 1, sequentially to
                        the Class A-R Certificates and Class 1-A Certificates,
                        in that order, until the Certificate Principal Balance
                        of each such Class is reduced to zero and (ii) from the
                        Principal Distribution Amount for Loan Group 2,
                        sequentially, to the Class 2-A-1, Class 2-A-2 and Class
                        2-A-3 Certificates, in that order, until the Certificate
                        Principal Balance of each such Class is reduced to zero;
                        provided, however that (x) after the Certificate
                        Principal Balance of the Class 1-A Certificates has been
                        reduced to zero, the Principal Distribution Amount from
                        both Loan Groups will be applied sequentially to the
                        Class 2-A-1, Class 2-A-2, and Class 2-A-3 Certificates,
                        in that order, until the Certificate Principal Balance
                        of each such Class is reduced to zero and (y) after the
                        Certificate Principal Balances of the Class 2-A-1, Class
                        2-A-2 and Class 2-A-3 Certificates have been reduced to
                        zero, the Principal Distribution Amount from both Loan
                        Groups will be applied to the Class 1-A Certificates,
                        until the Certificate Principal Balance of each such
                        Class is reduced to zero;

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

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

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

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

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

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                                    (G) the remaining Principal Distribution
                        Amount for both Loan Groups, to the Class M-6
                        Certificates, until the Certificate Principal Balance
                        thereof is reduced to zero;

                                    (H) the remaining Principal Distribution
                        Amount for both Loan Groups, to the Class B
                        Certificates, until the Certificate Principal Balance
                        thereof is reduced to zero; and

                                    (I) 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) concurrently, (i) the Class 1-A
                        Principal Distribution Amount shall be distributed to
                        the Class 1-A Certificates, until the Certificate
                        Principal Balance thereof is reduced to zero and (ii)
                        the Class 2-A Principal Distribution Amount shall be
                        distributed sequentially to the Class 2-A-1, Class 2-A-2
                        and Class 2-A-3 Certificates, in that order, until the
                        Certificate Principal Balance of each such Class is
                        reduced to zero; provided, however that (x) after the
                        Certificate Principal Balance of the Class 1-A
                        Certificates has been reduced to zero, the Principal
                        Distribution Amount for Loan Group 1 will be applied
                        sequentially to the Class 2-A-1, Class 2-A-2 and Class
                        2-A-3 Certificates, in that order, up to the amount of
                        the Class 2-A Principal Distribution Amount remaining
                        undistributed until the Certificate Principal Balance of
                        each such Class is reduced to zero and (y) after the
                        Certificate Principal Balances of the Class 2-A-1, Class
                        2-A-2 and Class 2-A-3 Certificates have been reduced to
                        zero, the Principal Distribution Amount for Loan Group 2
                        will be applied to the Class 1-A Certificates up to the
                        amount of the Class 1-A Principal Distribution Amount
                        remaining undistributed;

                                    (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;

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

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

                                    (G) to the Class M-6 Certificates, the Class
                        M-6 Principal Distribution Amount, until the Certificate
                        Principal Balance thereof is reduced to zero;

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

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

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

                        (i) from Excess Cashflow from both Loan Groups, to the
            holders of the Class or Classes of Offered Certificates (other than
            the Class A-R 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 from both Loan
            Groups, sequentially to the holders of the Class M-1, Class M-2,
            Class M-3, Class M-4, Class M-5, Class M-6 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 from both Loan
            Groups, sequentially to the holders of the Class M-1, Class M-2,
            Class M-3, Class M-4, Class M-5, Class M-6 and Class B Certificates,
            in that order, in an amount equal to the Unpaid Realized Loss
            Amounts for such Class or Classes;

                        (iv) (a) from the Class 1-A Corridor Contract Payment
            Amount, to the Class 1-A Certificates, until the related Net Rate
            Carryover is reduced to zero, (b) from the Class 2-A Corridor
            Contract Payment Amount, to the Class 2-A-1, Class 2-A-2 and Class
            2-A-3 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 Class 2-A
            Corridor Contract Payment Amount remaining after such

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            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 and (c) from
            the Subordinated Corridor Contract Payment Amount, to the Class M-1,
            Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B
            Certificates, on a pro rata basis, based on the Certificate
            Principal Balances thereof, to the extent needed to pay any related
            Net Rate Carryover for each such class; provided that any
            Subordinated 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 from both Loan
            Groups and any remaining Corridor Contract Payment Amount as
            provided in clause (iv) above, to the Class 1-A, Class 2-A-1, Class
            2-A-2, Class 2-A-3, Class M-1, Class M-2, Class M-3, Class M-4,
            Class M-5, Class M-6 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 amounts 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 from both Loan
            Groups, to the Class C Certificates, (x) the Current Interest for
            such Class and (y) any remaining Excess Cashflow shall be paid to
            the Class C Certificates;

                        (vii) from any remaining Excess Cashflow from both Loan
            Groups and any remaining Corridor Contract Payment Amount, if (x)
            the Corridor Contracts have not been terminated or (y) on any
            Distribution Date on or after the Corridor Contract Termination
            Date, to the Class C Certificates; and

                        (viii) any remaining Excess Cashflow from both Loan
            Groups, 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.

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

            (h) [reserved]

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

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

                        (ii) to the Class M-6 Certificates until the Class M-6
            Certificate Principal Balance is reduced to zero;

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

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

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

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

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

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

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

            Section 4.05 Monthly Statements to Certificateholders.

            (a) Not later than each Distribution Date, the Trustee shall prepare
and cause to be forwarded by first class mail to each Holder of a Class of
Certificates of the Trust Fund, the Master Servicer, the Seller and the
Depositor a statement setting forth for the Certificates:

                        (i) the amount of the related distribution to Holders of
            each Class allocable to principal, separately identifying (A) the
            aggregate amount of any Principal Prepayments included therein and
            (B) the aggregate of all scheduled payments of principal included
            therein;

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

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

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

                        (v) the aggregate of the Stated Principal Balances of
            the Mortgage Loans for the Mortgage Pool and each Loan Group;

                        (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) the Seller Shortfall Interest Requirement (if
            any) for the related Master Servicer Advance Date;

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                        (ix) the amount of Advances for each Loan Group included
            in the distribution on such Distribution Date;

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

                        (xi) [reserved];

                        (xii) the number and aggregate principal amounts of
            Mortgage Loans in each Loan Group: (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;

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

                        (xiv) 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;

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

                        (xvi) with respect to any Liquidated Loan in each Loan
            Group, the loan number and Stated Principal Balance relating
            thereto;

                        (xvii) whether a Trigger Event is in effect;

                        (xviii) 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;

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

                        (xx) with respect to the July 2004 Distribution Date,
            (A) the amount on deposit in the Pre-Funding Account (if any) on the
            related Determination Date and (B) the aggregate Stated Principal
            Balances of the Subsequent Mortgage Loans for Subsequent Transfer
            Dates occurring during the related Due Period;

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                        (xxi) with respect to the August 2004 Distribution Date,
            (A) the remaining amounts in Pre-Funding Account (if any) at the end
            of the Funding Period that are included in the Principal
            Distribution Amount and (B) the aggregate Stated Principal Balances
            of the Subsequent Mortgage Loans for Subsequent Transfer Dates
            occurring during the related Due Period; and

                        (xxii) the amount, if any, due and the amount received
            under the Corridor Contracts for such Distribution Date.

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

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

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

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

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

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

                        (iv) The original issue discount (or, in the case of the
            Mortgage Loans, market discount) or premium accrued or amortized
            through the end of such calendar quarter with respect to each
            related Class of regular or residual interests created hereunder

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            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.

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

            (c) Funds in the Carryover Reserve Fund may be invested in Permitted
Investments. Any earnings on such amounts shall be payable to the Class C
Certificates. The Class C Certificates shall evidence ownership of the Carryover
Reserve Fund for federal tax purposes and the Holders thereof evidencing not
less than 50% of the Voting Rights of such Class shall direct the Trustee in

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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) On each Distribution Date, the Trustee shall cause
in the following order of priority, the following amounts to 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:

                        With respect to the Group 1 Mortgage Loans:

                        (1)(i) to the Holders of REMIC I Regular Interest LT-1,
            REMIC I Regular Interest LT-1PF, REMIC I Regular Interest LTP and
            REMIC I Regular Interest LT-R in an amount equal to (A) the
            Uncertificated Accrued Interest for each REMIC I Regular Interest
            for such Distribution Date, plus (B) any amounts in respect thereof
            remaining unpaid from previous Distribution Dates; and

                        (ii) to the Holders of REMIC I Regular Interest 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 until $100 has been
            distributed pursuant to this clause;

                        (2) to the Holders of REMIC I Regular Interest LT-1 and
            REMIC I Regular Interest LT-1PF, in an amount equal to the remainder
            of the Available Funds for such Distribution Date after the
            distributions made pursuant to clause (1) above, allocated as
            follows:

                                    (a) to the Holders of REMIC I Regular
                        Interest LT-1, until the Uncertificated Principal
                        Balance of REMIC I Regular Interest LT-1 is reduced to
                        zero;

                                    (b) to the Holders of REMIC I Regular
                        Interest LT-1PF, until the Uncertificated Principal
                        Balance of REMIC I Regular Interest LT-1PF is reduced to
                        zero; and

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

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                        With respect to the Group II Mortgage Loans:

                        (1) to the Holders of REMIC I Regular Interest LT-2 and
            REMIC I Regular Interest LT-2PF in an amount equal to (A) the
            Uncertificated Accrued Interest for each REMIC I Regular Interest
            for such Distribution Date, plus (B) any amounts in respect thereof
            remaining unpaid from previous Distribution Dates;

                        (2) to the Holders of REMIC I Regular Interest LT-2 and
            REMIC I Regular Interest LT-2PF, in an amount equal to the remainder
            of the Available Funds for such Distribution Date after the
            distributions made pursuant to clause (1) above, allocated as
            follows:

                                    (a) to the Holders of REMIC I Regular
                        Interest LT-2, until the Uncertificated Principal
                        Balance of REMIC I Regular Interest LT-2 is reduced to
                        zero;

                                    (b) to the Holders of REMIC I Regular
                        Interest LT-2PF, until the Uncertificated Principal
                        Balance of REMIC I Regular Interest LT-2PF is reduced to
                        zero; and

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

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

            (i) first, (a) to Holders of REMIC II Regular Interest LT-AA, REMIC
            II Regular Interest LT-1A, REMIC II Regular Interest LT-2A1, REMIC
            II Regular Interest LT-2A2, REMIC II Regular Interest LT-2A3, REMIC
            II Regular Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC II
            Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC II
            Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II
            Regular Interest LT-B, REMIC II Regular Interest LT-ZZ, REMIC II
            Regular Interest LT-P and REMIC II 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 II Regular
            Interest LT-ZZ shall be reduced and deferred when the REMIC II
            Overcollateralized Amount is less than the REMIC II
            Overcollateralization Target Amount, by the lesser of (x) the amount
            of such difference and (y) the REMIC II Regular Interest LT- ZZ
            Maximum Interest Deferral Amount and such amount will be payable to
            the Holders of REMIC II Regular Interest LT-

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            1A, REMIC II Regular Interest LT-2A1, REMIC II Regular Interest
            LT-2A2, REMIC II Regular Interest LT-2A3, REMIC II Regular Interest
            LT-M1, REMIC II Regular Interest LT-M2, REMIC II Regular Interest
            LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular Interest
            LT-M5, REMIC II Regular Interest LT-M6 and REMIC II Regular Interest
            LT-B in the same proportion as the Overcollateralization Increase
            Amount is allocated to the Corresponding Certificates and the
            Uncertificated Principal Balance of REMIC II Regular Interest LT-ZZ
            shall be increased by such amount; and

            (2) to Holders of REMIC II Regular Interest LT-1SUB, REMIC II
Regular Interest LT-1GRP, REMIC II Regular Interest LT-2SUB, REMIC II Regular
Interest LT-2GRP and REMIC II Regular Interest LT-XX, 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

            (b) second, to the Holders of REMIC II Regular Interests, in an
amount equal to the remainder of the REMIC II Marker Allocation Percentage of
Available Funds for such Distribution Date after the distributions made pursuant
to clause (i) above, allocated as follows:

                        (i)         to the Holders of REMIC II Regular Interest
                                    LT-AA and REMIC II Regular Interest LT-P,
                                    98.00% of such remainder (other than amounts
                                    payable under clause (d) below), until the
                                    Uncertificated Principal Balance of such
                                    REMIC II Regular Interest is reduced to
                                    zero, provided, however, that REMIC II
                                    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 II
                                    Regular Interest LT-P, until $100 has been
                                    distributed pursuant to this clause;

                        (b) to the Holders of REMIC II Regular Interest LT-1A,
            REMIC II Regular Interest LT-2A1, REMIC II Regular Interest LT-2A2,
            REMIC II Regular Interest LT-2A3, REMIC II Regular Interest LT-M1,
            REMIC II Regular Interest LT-M2, REMIC II Regular Interest LT-M3,
            REMIC II Regular Interest LT-M4, REMIC II Regular Interest LT-M5,
            REMIC II Regular Interest LT-M6, REMIC II Regular Interest LT-B,
            1.00% of such remainder (other than amounts payable under clause (d)
            below), in the same proportion as principal payments are allocated
            to the Corresponding Certificates, until the Uncertificated
            Principal Balances of such REMIC II Regular Interests are reduced to
            zero;

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

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                        (d) any remaining amount to the Holders of the Class AR
            Certificates (in respect of the Class R-II 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 II Regular Interest LT-AA and REMIC II Regular Interest
LT-P, in that order and (ii) REMIC II Regular Interest LT-ZZ, respectively;
provided that REMIC II 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 II 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 II to the Holders of REMIC II Regular
Interest LT-P. The payment of the foregoing amounts to the Holders of REMIC II
Regular Interest LT-P shall not reduce the Uncertificated Principal Balance
thereof.

                        (ii) third, to the Holders of REMIC II Regular
            Interests, in an amount equal to the remainder of the REMIC II Sub
            WAC Allocation Percentage of Available Funds for such Distribution
            Date after the distributions made pursuant to clause (i) above,
            allocated as follows:

                        (a) Distributions of principal shall be deemed to be
            made to the REMIC II Regular Interests first, so as to keep the
            Uncertificated Principal Balance of each REMIC II Regular Interest
            ending with the designation "GRP" equal to 0.01% of the aggregate
            Stated Principal Balance of the Mortgage Loans in the related Group;
            second, to each REMIC II Regular Interest ending with the
            designation "SUB," so that the Uncertificated Principal Balance of
            each such REMIC II Regular Interest is equal to 0.01% of the excess
            of (x) the aggregate Stated Principal Balance of the Mortgage Loans
            in the related Group over (y) the Certificate Principal Balance of
            the Class A Certificate in the related Group (except that if any
            such excess is a larger number than in the preceding distribution
            period, the least amount of principal shall be distributed to such
            REMIC II Regular Interests such that the REMIC II Subordinated
            Balance Ratio is maintained); and third, any remaining principal to
            REMIC II Regular Interest LT-XX.

                        (b) Notwithstanding the distributions described in this
            Section 4.09, distribution of funds shall be made only in accordance
            with Section 4.04.

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            Section 4.10 [Reserved].

            Section 4.11 Allocation of Realized Losses on the REMIC II Regular
                         Interests.

            (a) All Realized Losses on the Group 1 Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the REMIC I Regular
Interest LT-1 and REMIC I Regular Interest LT-1PF until the Uncertificated
Principal Balance of each such REMIC I Regular Interest has been reduced to
zero; provided however, with respect to the first two Distribution Dates, all
Realized Losses on the Initial Group 1 Mortgage Loans shall be allocated to
REMIC I Regular Interest LT-1 until the Uncertificated Principal Balance of each
such REMIC I Regular Interest has been reduced to zero, and all Realized Losses
on the Subsequent Group 1 Mortgage Loans shall be allocated to REMIC I Regular
Interest LT-1PF until the Uncertificated Principal Balance thereof has been
reduced to zero. All Realized Losses on the Group 2 Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the REMIC I Regular
Interest LT-2 and REMIC I Regular Interest LT-2PF until the Uncertificated
Principal Balance of each such REMIC I Regular Interest has been reduced to
zero; provided however, with respect to the first two Distribution Dates, all
Realized Losses on the Initial Group 2 Mortgage Loans shall be allocated to
REMIC I Regular Interest LT-2 until the Uncertificated Principal Balance of each
such REMIC I Regular Interest has been reduced to zero, and all Realized Losses
on the Subsequent Group 2 Mortgage Loans shall be allocated to REMIC I Regular
Interest LT-2PF until the Uncertificated Principal Balance thereof has been
reduced to zero.

            (b) The REMIC II Marker Percentage of all Realized Losses on the
Mortgage Loans shall be allocated by the Trustee on each Distribution Date to
the following REMIC II Regular Interests in the specified percentages, as
follows: first, to Uncertificated Interest payable to the REMIC II Regular
Interest LT-AA and REMIC II Regular Interest LT-ZZ up to an aggregate amount
equal to the REMIC II Interest Loss Allocation Amount, 98% and 2%, respectively;
second, to the Uncertificated Principal Balances of the REMIC II Regular
Interest LT-AA and REMIC II Regular Interest LT-ZZ up to an aggregate amount
equal to the REMIC II Principal Loss Allocation Amount, 98% and 2%,
respectively; third, to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-B and REMIC II Regular
Interest LT-ZZ, 98%, 1.00% and 1%, respectively, until the Uncertificated
Principal Balances of REMIC II Regular Interest LT-B has been reduced to zero;
fourth to the Uncertificated Principal Balances of REMIC II Regular Interest
LT-AA, REMIC II Regular Interest LT-M6 and REMIC II Regular Interest LT-ZZ, 98%,
1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC II
Regular Interest LT-M6 has been reduced to zero; fifth to the Uncertificated
Principal Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest
LT-M5 and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC II Regular Interest LT-M5 has been
reduced to zero; sixth to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-M4 and REMIC II Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC II Regular Interest LT-M4 has been reduced to zero; seventh to
the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC
II Regular Interest LT-M3 and REMIC II Regular

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

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

            Section 4.12 The Class P Certificates.

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

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<PAGE>

                                    ARTICLE V

                                THE CERTIFICATES

            Section 5.01 The Certificates.

            The Certificates shall be substantially in the forms attached hereto
as Exhibits A-1 through A-8, 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:

<TABLE>
<CAPTION>
                                    Minimum              Integral Multiples in            Original Certificate
              Class               Denomination             Excess of Minimum               Principal Balance
              -----               ------------             -----------------               -----------------
<S>                                  <C>                        <C>                         <C>
                1-A                  $20,000                    $1,000                      $ 341,700,000.00
              2-A-1                  $20,000                    $1,000                      $  48,932,000.00
              2-A-2                  $20,000                    $1,000                      $  40,993,000.00
              2-A-3                  $20,000                    $1,000                      $  12,250,000.00
               A-R                   $99.95(1)                   N/A                        $         100.00
               M-1                   $20,000                    $1,000                      $  34,450,000.00
               M-2                   $20,000                    $1,000                      $  10,600,000.00
               M-3                   $20,000                    $1,000                      $  17,225,000.00
               M-4                   $20,000                    $1,000                      $   7,420,000.00
               M-5                   $20,000                    $1,000                      $   5,830,000.00
               M-6                   $20,000                    $1,000                      $   5,300,000.00
                B                    $20,000                    $1,000                      $   5,300,000.00
                C                        20%                        1%                      $           0.00
                P                        20%                        1%                      $         100.00
</TABLE>

            (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

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<PAGE>

delivered hereunder. All Certificates shall be dated the date of their
authentication. On the Closing Date, the Trustee shall authenticate the
Certificates to be issued at the written direction of the Depositor, or any
affiliate thereof.

            Section 5.02 Certificate Register; Registration of Transfer and
                         Exchange of Certificates.

            (a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, 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

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<PAGE>

provide to any Holder of a Private Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Trustee and
the Master Servicer shall cooperate with the Depositor in providing the Rule
144A information referenced in the preceding sentence, including providing to
the Depositor such information regarding the Certificates, the Mortgage Loans
and other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring 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

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<PAGE>

Trustee or the Trust Fund, addressed to the Trustee to the effect that the
purchase and holding of such ERISA-Restricted Certificate is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Depositor, the Seller, the Master Servicer or Trustee to any
obligation, or liability (including liabilities or obligations under ERISA or
Section 4975 of the Code) in addition to those expressly undertaken in this
Agreement or to any liability. For purposes of the preceding sentence, with
respect to an ERISA-Restricted Certificate that is not a Book-Entry Certificate
or a Class A-R Certificate, in the event the representation letter referred to
in the preceding sentence is not so furnished, such representation shall be
deemed to have been made to the Trustee by the transferee's (including an
initial acquiror's) acceptance of such ERISA-Restricted Certificate.
Notwithstanding anything else to the contrary herein, any purported transfer of
an ERISA-Restricted Certificate or a Subordinate Certificate to or on behalf of
an employee benefit plan subject to ERISA or the Code without the delivery to
the Trustee of an opinion of counsel satisfactory to the Trustee as described
above shall be void and of no effect. Any purported beneficial owner whose
acquisition or holding of the Certificate or interest therein was effected in
violation of the conditions described in this paragraph shall indemnify and hold
harmless the Depositor, the Trustee, the Master Servicer, the Seller, any
Subservicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by those parties as a result of that acquisition or
holding.

            To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of Transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the Transfer was
registered by the Trustee in accordance with the foregoing requirements.

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

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

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

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<PAGE>

                        (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
            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

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<PAGE>

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. 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

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<PAGE>

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 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.

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<PAGE>

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

            Section 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, 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.

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<PAGE>

            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.

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                                   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

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<PAGE>

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
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

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replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.

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                                   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

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            (vi) the Master Servicer shall fail to reimburse in full the Trustee
not later than 6:00 P.M., New York time on the Business Day following the
related Distribution Date Date 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

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Master Servicer would have been entitled to if the Master Servicer had continued
to act hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any successor Master Servicer
shall be an institution that is a Fannie Mae and Freddie Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000,
and that is willing to service the Mortgage Loans and executes and delivers to
the Depositor and the Trustee an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer
(other than liabilities of the Master Servicer under Section 6.03 hereof
incurred prior to termination of the Master Servicer under Section 7.01), with
like effect as if originally named as a party to this Agreement; and provided
further that each Rating Agency acknowledges that its rating of the Certificates
in effect immediately prior to such assignment and delegation will not be
qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Master Servicer hereunder shall be effective
until the Trustee shall have consented thereto, and written notice of such
proposed appointment shall have been provided by the Trustee to each
Certificateholder. The Trustee shall not resign as servicer until a successor
servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided that no such compensation shall be in excess of
that permitted the Master Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other successor
servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused by the failure of the Master
Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.

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

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

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

            Section 7.03 Notification to Certificateholders.

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

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

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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

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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

            (vi) 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;

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

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

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

                        (ix) the Trustee shall be under no obligation to
            exercise any of the trusts or powers vested in it by this Agreement
            or to make any investigation of matters arising hereunder or to
            institute, conduct or defend any litigation hereunder or in relation
            hereto at the request, order or direction of any of the
            Certificateholders, pursuant to the provisions of this Agreement,
            unless such Certificateholders shall have offered to the Trustee
            reasonable security or indemnity against the costs, expenses and
            liabilities that may be incurred therein or thereby.

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

            Section 8.03 Trustee Not Liable for Mortgage Loans.

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

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            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 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

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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 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.

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            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.

            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.

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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 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.

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            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, REMIC II
and REMIC III 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 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

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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-6
Certificates (pro rata), third, to the Class M-5 Certificates (pro rata),
fourth, to the Class M-4 Certificates (pro rata), fifth, to the Class M-3
Certificates (pro rata), sixth, to the Class M-2 Certificates (pro rata),
seventh, to the Class M-1 Certificates (pro rata), and eighth, to the Class 1-A
Certificates and Class 2-A 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

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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 1-A, Class 2-A-1,
Class 2-A-2, Class 2-A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6 and Class B Certificateholders to receive payments from the Carryover
Reserve Fund as rights in the three interest rate cap contracts written by the
Corridor Contract Counterparty with respect to the Net Rate Carryover funded by
the Corridor 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 REMIC II
Regular Interests, but also ownership of an interest in an interest rate cap
contract. For purposes of determining the issue price of the REMIC III Regular
Interests, the Trustee shall assume that the Class 1-A Corridor Contract, the
Class 2-A Corridor Contract and Subordinated Corridor Contract have values of
$466,000, $137,000 and $258,000 respectively .

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                                   ARTICLE IX

                                   TERMINATION

            Section 9.01 Termination upon Liquidation or Repurchase of all
                         Mortgage Loans.

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

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

            Section 9.02 Final Distribution on the Certificates.

            If on any Determination Date, (i) the Master Servicer determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to each
Certificateholder or (ii) the Trustee determines that a Class of Certificates
shall be retired after a final distribution on such Class, the Trustee shall
notify the related Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the related Certificates at
the Corporate Trust Office of the

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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 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 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. Notwithstanding the
reduction of the Certificate Principal Balance of any Class of Certificates to
zero, such Class will be outstanding hereunder (solely for the purpose of
receiving distribution (if any), to which it may be entitled pursuant to the
terms of this Agreement and not for any other purpose)until the termination of
the respective obligations and responsibilities of the Depositor, each Seller,
the Master Servicer and the Trustee hereunder in accordance with Article IX.

            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

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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 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. Notwithstanding the foregoing, no amendment that
significantly changes the permitted activities of the trust created by this
Agreement may be made without the consent of Certificateholders representing not
less than 51% of the Voting Rights of each Class of Certificates affected by
such amendment.

            The Trustee, the Depositor, the Master Servicer and the Seller may
also at any time and from time to time amend this Agreement, without the consent
of the Certificateholders, to modify, eliminate or add to any of its provisions
to such extent as shall be necessary or appropriate to maintain the
qualification of the Trust Fund as a REMIC under the Code or to avoid or
minimize the risk of the imposition of any tax on the Trust Fund pursuant to the
Code that would be a claim against the Trust Fund at any time prior to the final
redemption of the Certificates, provided that the Trustee have been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee, to the
effect that such action is necessary or appropriate to maintain such
qualification or to avoid or minimize the risk of the imposition of such a tax.

            This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Seller and the Trustee and the Holders of
each Class of Certificates adversely affected thereby evidencing not less than a
majority Percentage Interest of the Voting Rights of such Class for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided that no such amendment pursuant to this
paragraph shall (i) reduce in any manner the amount of, or delay the timing of,
payments required to be distributed on any Certificate without the 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

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consent of the Holders of Certificates of such Class evidencing 66% or more of
the Voting Rights of such Class, or (iii) reduce the aforesaid percentages of
Certificates the Holders of which are required to consent to any such amendment
without the consent of the Holders of all such Certificates then outstanding.

            Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall be an expense of
the party requesting such amendment but in any case shall not be an expense of
the Trustee, to the effect that such amendment will not cause the imposition of
any tax on the Trust Fund or the Certificateholders or cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding.

            Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.

            It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

            Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.

            Section 10.02 Recordation of Agreement; Counterparts.

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

            For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

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            Section 10.03 Governing Law.

            THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

            Section 10.04 Intention of Parties.

            It is the express intent of the parties hereto that the conveyance
of the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement (within the
meaning of the Uniform Commercial Code of the State of New York) with respect to
all such assets and security interests and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant pursuant to the
terms of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.

            The Depositor for the benefit of the Certificateholders shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.

            Section 10.05 Notices.

            (a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:

                        (i) Any material change or amendment to this Agreement;

                        (ii) The occurrence of any Event of Default that has not
            been cured;

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

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

                        (v) The final payment to Certificateholders.

            In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:

                        (i) Each report to Certificateholders described in
            Section 4.05;

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

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

            (b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the Depositor,
CWABS, Inc., 4500 Park Granada, Calabasas, California 91302, Attention: Josh
Adler, with a copy to the same address, Attention: Legal Department; (ii) in the
case of the Seller, Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas,
California 91302, Attention: Josh Adler, with a copy to the same address,
Attention: Legal Department, or such other address as may be hereafter furnished
to the Depositor and the Trustee by the Master Servicer in writing; (iii) in the
case of the Master Servicer, Countrywide Home Loans Servicing LP, 400
Countrywide Way, Simi Valley, California 93065, Attention: Mark Wong or such
other address as may be hereafter furnished to the Depositor and the Trustee by
the Master Servicer in writing; (iv) in the case of the Trustee, The Bank of New
York, 101 Barclay Street, New York, New York 10286 Attention: Corporate Trust
MBS Administration, CWABS, Series 2004-ECC1, 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) Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., Attention: Mortgage Surveillance
Group, 25 Broadway, 12th Floor, New York, New York 10004, (y) Fitch Ratings, One
State Street Plaza, 32nd Floor, New York, New York, 10004, Attention: Alla
Sirotic, Residential Mortgage, or such other address as may hereinafter be
furnished to the Depositor in writing by Fitch Ratings and (z) Moody's Investors
Service, Inc., Residential Mortgage Monitoring Department, 99 Church Street, New
York, New York 10007, or such other address as may hereinafter be furnished to
the Depositor in writing by Moody's. Notices to Certificateholders shall be
deemed given when mailed, first class postage prepaid, to their respective
addresses appearing in the Certificate Register.

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            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 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

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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 Nonassessable and Fully Paid.

            It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

                           *            *            *

                                      160
<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/ Michael Schloessmann
                                           -------------------------------------
                                        Name:       Michael Schloessmann
                                        Title:      Vice President

                                        COUNTRYWIDE HOME LOANS, INC.,
                                        as Seller

                                        By:/s/ Michael Schloessmann
                                           -------------------------------------
                                        Name:       Michael Schloessmann
                                        Title:      Vice President

                                        COUNTRYWIDE HOME LOANS
                                        SERVICING LP,
                                        as Master Servicer

                                        By:         COUNTRYWIDE GP, INC.

                                        By:/s/ Michael Schloessmann
                                           -------------------------------------
                                        Name:       Michael Schloessmann
                                        Title:      Senior Vice President

                                        THE BANK OF NEW YORK,
                                        not in its individual capacity,
                                        but solely as Trustee

                                        By:/s/ Courtney A. Bartholomew
                                           -------------------------------------
                                        Name:       Courtney A. Bartholomew
                                        Title:      Vice President

                                       161

<PAGE>

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

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

                                      162
<PAGE>

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

            On this 25th day of June, 2004, before me, a notary public in and
for said State, appeared Michael Schloessmann, personally known to me on the
basis of satisfactory evidence to be a Vice President of Countrywide Home Loans,
Inc., one of the corporations that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation and
acknowledged to me that such corporation executed the within instrument.

            IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                _________________________
                                                      Notary Public

[Notarial Seal]

                                      163
<PAGE>

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

            On this 25th day of June, 2004, before me, a notary public in and
for said State, appeared Michael Schloessmann, personally known to me on the
basis of satisfactory evidence to be a Senior 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]

                                      164
<PAGE>

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

            On this 25th day of June, 2004, before me, a notary public in and
for said State, appeared Michael Schloessmann, personally known to me on the
basis of satisfactory evidence to be a Vice President of 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]

                                      165
<PAGE>

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

            On this 25th day of June, 2004, before me, a notary public in and
for said State, appeared Courtney A. Bartholomew, personally known to me on the
basis of satisfactory evidence to be a Vice President 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]

                                      166

<PAGE>

                                                                     Exhibit A-1

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

                [See appropriate documents delivered at closing]

                                      A-1

<PAGE>

                                                                     Exhibit A-2

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

                [See appropriate documents delivered at closing.]

                                      A-2

<PAGE>

                                                                     Exhibit A-3

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

                [See appropriate documents delivered at closing]

                                      A-3

<PAGE>

                                                                     Exhibit A-4

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

                [See appropriate documents delivered at closing.]

                                      A-4

<PAGE>

                                                                     Exhibit A-5

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

                [See appropriate documents delivered at closing]

                                      A-5

<PAGE>

                                                                     Exhibit A-6

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

                [See appropriate documents delivered at closing.]

                                      A-6

<PAGE>

                                                                     Exhibit A-7

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

                [See appropriate documents delivered at closing]

                                      A-7

<PAGE>

                                                                     Exhibit A-8

                           Exhibit A-8 is a photocopy
                          of the Class M-6 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      A-8

<PAGE>

                                                                     Exhibit A-9

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

                [See appropriate documents delivered at closing]

                                      A-9

<PAGE>

                                                                       Exhibit B

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

                [See appropriate documents delivered at closing]

                                      B-1

<PAGE>

                                                                       Exhibit C

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

                [See appropriate documents delivered at closing]

                                      C-1

<PAGE>

                                                                     Exhibit D-1

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

                [See appropriate documents delivered at closing]

                                      D-1

<PAGE>

                                                                       Exhibit E

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

                [See appropriate documents delivered at closing]

                                      E-1

<PAGE>

                                                             Exhibit F-1 and F-2

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

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

                                   F-1 and F-2

<PAGE>

                                   EXHIBIT G-1

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Seller]

[Master Servicer]

                  Re:      Pooling and Servicing Agreement dated as of June 1,
                           2004 among CWABS, Inc., as Depositor, Countrywide
                           Home Loans, Inc., as Seller, Countrywide Home Loans
                           Servicing LP, as Master Servicer and The Bank of New
                           York, as Trustee, relating to the Asset-Backed
                           Certificates, Series 2004-ECC1
                           ----------------------------------------------------

Gentlemen:

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

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

                                     G-1-1

<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                           The Bank of New York,
                                             as Trustee

                                           By:______________________________
                                              Name:
                                              Title:

                                     G-1-2

<PAGE>

                                   EXHIBIT G-2

                    FORM OF INTERIM CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Seller]

[Master Servicer]

                  Re:      Pooling and Servicing Agreement dated as of June 1,
                           2004 among CWABS, Inc., as Depositor, Countrywide
                           Home Loans, Inc., as Seller, Countrywide Home Loans
                           Servicing LP, as Master Servicer and The Bank of New
                           York, as Trustee, relating to the Asset-Backed
                           Certificates, Series 2004-ECC1___
                           ----------------------------------------------------

Gentlemen:

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

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

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

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

                                     G-2-1

<PAGE>

                  ECC1, CWABS, Inc., by The Bank of New York, a New York banking
                  corporation, as trustee under the Pooling and Servicing
                  Agreement dated as of June 1, 2004, without recourse", or, in
                  the case of each Mortgage Loan with respect to property
                  located in the State of California that is not a MERS Mortgage
                  Loan, a duly executed assignment of the Mortgage in blank
                  (each such assignment, when duly and validly completed, to be
                  in recordable form and sufficient to effect the assignment of
                  and transfer to the assignee thereof, under the Mortgage to
                  which such assignment relates);

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

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

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

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

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

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.

                                     G-2-2

<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                         The Bank of New York,
                                              as Trustee

                                         By:
                                            ---------------------------------
                                            Name:
                                            Title:

                                     G-2-3

<PAGE>

                                  EXHIBIT G-3

                      FORM OF DELAY DELIVERY CERTIFICATION

                                     [Date]

[Depositor]

[Seller]

[Master Servicer]

         Re:      Pooling and Servicing Agreement dated as of June 1, 2004 (the
                  "Pooling and Servicing Agreement") among CWABS, Inc., as
                  Depositor, Countrywide Home Loans, Inc., as Seller,
                  Countrywide Home Loans Servicing LP, as Master Servicer and
                  The Bank of New York, as Trustee, relating to the Asset-Backed
                  Certificates, Series 2004-ECC1___________________
                  --------------------------------------------------------------

Gentlemen:

         Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement. The
undersigned hereby certifies that as to each Delay Delivery Mortgage Loan listed
on the Schedule A attached hereto (other than any Mortgage Loan paid in full or
listed on Schedule B attached hereto) the Trustee has received:

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

                  in the case of each Mortgage Loan that is not a MERS Mortgage
         Loan, a duly executed assignment of the Mortgage to "Asset-Backed
         Certificates, Series 2004-ECC1, CWABS, Inc., by The Bank of New York, a
         New York banking corporation, as trustee under the Pooling and
         Servicing Agreement dated as of June 1, 2004, without recourse", or, in
         the case of each Mortgage Loan with respect to property located in the
         State of California that is not a MERS Mortgage Loan, a duly executed
         assignment of the Mortgage in blank (each such assignment, when duly
         and validly completed, to be in

                                     G-3-1

<PAGE>

         recordable form and sufficient to effect the assignment of and transfer
         to the assignee thereof, under the Mortgage to which such assignment
         relates).

         Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                                     THE BANK OF NEW YORK,
                                                     as Trustee

                                                     By:______________________
                                                     Name:
                                                     Title:

                                     G-3-2

<PAGE>

                                   EXHIBIT G-4

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE

                           (Subsequent Mortgage Loans)

                                     [Date]

[Depositor]

[Seller]

[Master Servicer]

         Re:      Pooling and Servicing Agreement dated as of June 1, 2004 (the
                  "Pooling and Servicing Agreement") among CWABS, Inc., as
                  Depositor, Countrywide Home Loans, Inc., as Seller,
                  Countrywide Home Loans Servicing LP, as Master Servicer and
                  The Bank of New York, as Trustee, relating to the Asset-Backed
                  Certificates, Series 2004-ECC1___________________
                  --------------------------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies hat, as to
each Mortgage Loan listed in the Mortgage Loan Schedule other than any Mortgage
Loan paid in full or listed in the attached ist of exceptions) the Co-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", 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) a duly executed assignment of the Mortgage in the form permitted
by Section 2.01 of the Pooling and Servicing Agreement referred to above.

         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,

                                      G-4-1

<PAGE>

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.

         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-4-2
<PAGE>

                                    EXHIBIT H

                     FORM OF FINAL CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Master Servicer]

[Seller]

         Re:      Pooling and Servicing Agreement dated as of June 1, 2004 (the
                  "Pooling and Servicing Agreement") among CWABS, Inc., as
                  Depositor, Countrywide Home Loans, Inc., as Seller,
                  Countrywide Home Loans Servicing LP, as Master Servicer and
                  The Bank of New York, as Trustee, relating to the Asset-Backed
                  Certificates, Series 2004-ECC1_______
                  --------------------------------------------------------------

Gentlemen:

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

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

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

         (iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed Certificates,
Series 2004-ECC1, CWABS, Inc., by The Bank of New York, a New York banking
corporation, as trustee under the

                                      H-1
<PAGE>

Pooling and Servicing Agreement dated as of June 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>

                                       I-6

                                    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 June 1, 2004 (the
"Agreement"), by and among CWABS, Inc., as depositor (the "Depositor"),
Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans Servicing LP, as
Master Servicer and The Bank of New York, as Trustee. Capitalized terms used,
but not defined herein or in Exhibit 1 hereto, shall have the meanings ascribed
to such terms in the Agreement. The transferee has authorized the undersigned to
make this affidavit on behalf of the transferee.

         2. Either (a) the transferee is not an employee benefit plan that is
subject to Section 406 of ERISA or to section 4975 of the Internal Revenue Code
of 1986, nor is it acting on behalf of or with plan assets of any such plan, or
(b) the transferee has provided the opinion of counsel specified in Section
5.02(b) of the Agreement. The transferee is, as of the date hereof, and will be,
as of the date of the Transfer, a Permitted Transferee. The transferee is
acquiring its Ownership Interest in the Certificate for its own account.

         3. The transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent transferee furnished to such Person an affidavit that
such subsequent transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.

         4. The transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a

                                      I-1
<PAGE>

partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)

         5. The transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the transferee contemplated hereby null and void.

         6. The transferee agrees to require a Transfer Affidavit from any
Person to whom the transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
transferee is acting as nominee, trustee or agent, and the transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the transferee, the
transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit I to the Agreement (a "Transferor Certificate") to the
effect that such transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.

         7. The transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the Class
A-R Certificates.

         8. The transferee's taxpayer identification number is
__________________.

         9. The transferee is a U.S. Person as defined in Code section
7701(a)(30).

         10. The transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.

         11. The transferee has provided financial statements or other financial
information requested by the Transferor in connection with the transfer of the
Class A-R Certificates to permit the Transferor to assess the financial
capability of the transferee to pay such taxes.

                                      * * *

                                      I-2
<PAGE>

         IN WITNESS WHEREOF, the transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this __th day of _______, 20__.

                                                     [NAME OF TRANSFEREE]

                                                     By:________________________
                                                     Name:
                                                     Title:

[Corporate Seal]

ATTEST:

-------------------------
[Assistant] Secretary

         Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the _____________________ of the transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
transferee.

         Subscribed and sworn before me this __th day of _______, 20__.

                                           ____________________________________
                                                        NOTARY PUBLIC

                                           My Commission expires the ___ day of

                                           _______________________, 20__.

                                      I-3
<PAGE>

                                                                       EXHIBIT 1

                               Certain Definitions

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

         "Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.

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

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

                                      I-4
<PAGE>

Section 5.02(c) of the Agreement
--------------------------------

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

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

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

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

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Class A-R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported transferee. If any purported transferee
         shall become a Holder of a Class A-R Certificate in violation of the
         provisions of this Section 5.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Class A-R
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Class A-R Certificate that is in fact
         not permitted by Section 5.02(b) and

                                      I-5
<PAGE>

         Section 5.02(c) or for making any payments due on such Certificate to
         the Holder thereof or taking any other action with respect to such
         Holder under the provisions of this Agreement so long as the Transfer
         was registered after receipt of the related Transfer Affidavit,
         Transferor Certificate and either the Rule 144A Letter or the
         Investment Letter. The Trustee shall be entitled but not obligated to
         recover from any Holder of a Class A-R Certificate that was in fact not
         a Permitted Transferee at the time it became a Holder or, at such
         subsequent time as it became other than a Permitted Transferee, all
         payments made on such Class A-R Certificate at and after either such
         time. Any such payments so recovered by the Trustee shall be paid and
         delivered by the Trustee to the last preceding Permitted Transferee of
         such Certificate.

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

                  The restrictions on Transfers of a Class A-R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Seller or the Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Class A-R Certificate hereby
consents to any amendment of this Agreement that, based on an Opinion of Counsel
furnished to the Trustee, is reasonably necessary (a) to ensure that the record
ownership of, or any beneficial interest in, a Class A-R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class A-R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.

                                      I-6
<PAGE>

                                      J-1-1

                                   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-ECC1
                           ------------------------------

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 June 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York, as Trustee.

                                            Very truly yours,

                                            ___________________________________
                                            Name of Transferor

                                            By: _______________________________
                                                Name:
                                                Title:

                                     J-1-1

<PAGE>

                                   EXHIBIT J-2

                       FORM OF TRANSFEROR CERTIFICATE FOR
                              PRIVATE CERTIFICATES

                                                            Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-ECC1, 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 June 1,
2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer and The Bank of New
York, as Trustee.

                                           Very truly yours,

                                           __________________________________
                                           Name of Transferor

                                           By: _______________________________
                                                 Name:
                                                 Title:

                                     J-2-1

<PAGE>

                                    EXHIBIT K

                    FORM OF INVESTMENT LETTER (NON-RULE 144A)

                                                             Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2004-ECC1, Class [   ]
                           --------------------------------------

Ladies and Gentlemen:

         In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has permitted the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we

                                      K-2
<PAGE>

will at our expense provide an opinion of counsel satisfactory to the addressees
of this Certificate that such sale, transfer or other disposition may be made
pursuant to an exemption from the Act, (2) the purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially the
same effect as this certificate, and (3) the purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling and
Servicing Agreement.

         All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
June 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer and The Bank of
New York, as Trustee.

                                             Very truly yours,

                                             ----------------------------------
                                             Name of Transferee

                                             By: _______________________________
                                                   Authorized Officer

<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-ECC1, Class [   ]
                           --------------------------------------

Ladies and Gentlemen:

         In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has permitted the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement (e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and the purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of

                                      L-1

<PAGE>

the Securities Act or require registration pursuant thereto, nor will act, nor
has authorized or will authorize any person to act, in such manner with respect
to the Certificates, (f) we are a "qualified institutional buyer" as that term
is defined in Rule 144A under the Securities Act and have completed either of
the forms of certification to that effect attached hereto as Annex 1 or Annex 2.
We are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.

         All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
June 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer and The Bank of
New York, as Trustee.

                                      L-2

<PAGE>

                              ANNEX 1 TO EXHIBIT L
                              --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

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

                  2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis either at least $100,000 in securities
or, if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis
at least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.

                  ___      CORPORATION, ETC. The Buyer is a corporation (other
                           than a bank, savings and loan association or similar
                           institution), Massachusetts or similar business
                           trust, partnership, or charitable organization
                           described in Section 501(c)(3) of the Internal
                           Revenue Code of 1986, as amended.

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

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

                                      L-3

<PAGE>

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

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

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

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

                  ___      INVESTMENT ADVISOR. The Buyer is an investment
                           advisor registered under the Investment Advisors Act
                           of 1940.

                  ___      SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small
                           business investment company licensed by the U.S.
                           Small Business Administration under Section 301(c) or
                           (d) of the Small Business Investment Act of 1958.

                  ___      BUSINESS DEVELOPMENT COMPANY. Buyer is a business
                           development company as defined in Section 202(a)(22)
                           of the Investment Advisors Act of 1940.

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

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated

                                      L-4

<PAGE>

subsidiary of another enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934, as amended.

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

                  6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                ________________________________________________
                                                 Print Name of Buyer

                                By:
                                   ---------------------------------------------
                                Name:
                                Title:

                                Date:
                                      ------------------------------------------

                                      L-5

<PAGE>

                                                            ANNEX 2 TO EXHIBIT L
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That are Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

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

                  2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.

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

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

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

                                      L-6

<PAGE>

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

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

                  6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.

                                  ______________________________________________
                                          Print Name of Buyer or Adviser

                                  By: __________________________________________
                                  Name:
                                  Title:

                                  IF AN ADVISER:

                                  ______________________________________________
                                               Print Name of Buyer

                                  Date: ________________________________________

                                      L-7

<PAGE>

                                    EXHIBIT M

                               REQUEST FOR RELEASE
                                  (for Trustee)

Loan Information
----------------

         Name of Mortgagor:
                                          --------------------------------------
         Master Servicer
         Loan No.:
                                          --------------------------------------
Trustee
-------

         Name:
                                          --------------------------------------
         Address:
                                          --------------------------------------
         Trustee
         Mortgage File No.:
                                          --------------------------------------

         The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Asset-Backed Certificates, Series 2004-ECC1, 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 June 1, 2004 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, and the
Trustee.

(  )     Mortgage Note dated ___________, ____, in the original principal sum of
         $________, made by __________________, payable to, or endorsed to the
         order of, the Trustee.

(   )    Mortgage recorded on _________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         ________________, State of _______________ in book/reel/docket
         _______________ of official records at page/image

(   )    Deed of Trust recorded on _________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         ________________, State of _______________ in book/reel/docket
         _______________ of official records at page/image

                                      M-1

<PAGE>

(  )     Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
         _________________ as instrument no. __________ in the County Recorder's
         Office of the County of __________, State of _______________ in
         book/reel/docket _______________ of official records at page/image
         _____________.

(  )     Other documents, including any amendments, assignments or other
         assumptions of the Mortgage Note or Mortgage.

(  )     ----------------------------------------------

(  )     ----------------------------------------------

(  )     ----------------------------------------------

(  )     ----------------------------------------------

         The undersigned Master Servicer hereby acknowledges and agrees as
follows:

                  (1) The Master Servicer shall hold and retain possession of
         the Documents in trust for the benefit of the Trust Fund, solely for
         the purposes provided in the Agreement.

                  (2) The Master Servicer shall not cause or knowingly permit
         the Documents to become subject to, or encumbered by, any claim, liens,
         security interest, charges, writs of attachment or other impositions
         nor shall the Master Servicer assert or seek to assert any claims or
         rights of setoff to or against the Documents or any proceeds thereof.

                  (3) The Master Servicer shall return each and every Document
         previously requested from the Mortgage File to the Trustee when the
         need therefor no longer exists, unless the Mortgage Loan relating to
         the Documents has been liquidated and the proceeds thereof have been
         remitted to the Certificate Account and except as expressly provided in
         the Agreement.

                  (4) The Documents and any proceeds thereof, including any
         proceeds of proceeds, coming into the possession or control of the
         Master Servicer shall at all times be earmarked for the account of the
         Trust Fund, and the Master Servicer shall keep the Documents and any
         proceeds separate and distinct from all other property in the Master
         Servicer's possession, custody or control.

                                                     [Master Servicer]

                                                     By  _______________________

                                                     Its _______________________

Date: _________________, ____

                                      M-2

<PAGE>

                                    EXHIBIT N

                               REQUEST FOR RELEASE
             [Mortgage Loans Paid in Full, Repurchased or Replaced]

                     OFFICER'S CERTIFICATE AND TRUST RECEIPT
                           ASSET-BACKED CERTIFICATES,
                                Series 2004-ECC1

__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]

LOAN NUMBER:_______________                 BORROWER'S NAME:_____________

COUNTY:____________________

[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]

I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

____________      _____________________              DATED:____________

/ /      VICE PRESIDENT

/ /      ASSISTANT VICE PRESIDENT

                                      N-1

<PAGE>

                                                                       Exhibit O

                            Exhibit O is a photocopy
                           of the Depository Agreement
                                  as delivered.

                [see appropriate documents delivered at closing]

                                      O-1

<PAGE>

                                    EXHIBIT P

                       FORM OF MORTGAGE NOTE AND MORTGAGE

                             [Provide Upon Request]

                                      P-1

<PAGE>

                                    EXHIBIT Q

                     [FORM OF SUBSEQUENT TRANSFER AGREEMENT]

         SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 2004 (this
"Subsequent Transfer Agreement"), among CWABS, INC., a Delaware corporation, as
depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York
corporation, in its capacity as seller under the Pooling and Servicing Agreement
referred to below ( the "Seller") and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee");

         WHEREAS, the Depositor, the Seller, the Trustee and CHL, as Master
Servicer, have entered in the Pooling and Servicing Agreement, dated as of
August 1, 2001 (the "Pooling and Servicing Agreement"), relating to the CWABS,
Inc. Asset-Backed Certificates, Series 2004-ECC1 (capitalized terms not
otherwise defined herein are used as defined in the Pooling and Servicing
Agreement);

         WHEREAS, Section 2.01(b) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer Agreement
in accordance with the terms and conditions of the Pooling and Servicing
Agreement;

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged
the parties hereto agree as follows:

         (a) The "Subsequent Transfer Date" with respect to this Subsequent
Transfer Agreement shall be ________ __, 2004.

         (b) The "Subsequent Transfer Date Aggregate Purchase Amount" with
respect to this Subsequent Transfer Agreement shall be $_______________;
provided, however, that such amount shall not exceed the amount on deposit in
the Pre-Funding Account.

         (c) [Reserved]

         (d) [Reserved]

         (e) The Subsequent Mortgage Loans conveyed on the Subsequent Transfer
Date shall be determined by the Seller as follows.

                  (i) The Seller shall list all funded mortgage loans then owned
by it eligible for inclusion in the Trust Fund that qualify for inclusion in the
Trust Fund by the date on which they were funded, and for each date, the
Mortgagors shall be listed alphabetically.

         Beginning with the earliest date, sequentially by date and within a
date alphabetically, the listed loans shall be transferred to the Trust Fund
until either their aggregate Stated

                                      Q-1

<PAGE>

         Principal Balance is as close as possible or to equal to the Subsequent
Transfer Date Aggregate Purchase Amount without exceeding it or all of the
listed loans have been transferred. No fixed rate mortgage loan that would be a
Credit Comeback Loan is eligible for conveyance to the Trust Fund on a
Subsequent Transfer Date occurring after ____, 2001.

         Once the potential Subsequent Mortgage Loans are identified in this
manner, the total potential Mortgage Loans shall be tested for compliance with
the Pool Characteristics as provided in Section 2.01(e)(vii) of the Pooling and
Servicing Agreement after taking into account the addition of such potential
Subsequent Mortgage Loans. If, as a result of the potential addition of
Subsequent Mortgage Loans described in the preceding sentence, any Pool
Characteristic is outside any permitted parameter, then beginning with the last
mortgage loan initially added as a potential Subsequent Mortgage Loan and
progressing in reverse order, any potential Subsequent Mortgage Loan having a
characteristic that is outside of the permitted parameters of a parameter
violated by the total potential Mortgage Pool shall be removed. Then additional
mortgage loans shall be added as provided in the preceding paragraph except that
no mortgage loan shall be added if it has a Pool Characteristic that is outside
of the permitted parameters of a parameter violated by the total potential
Mortgage Pool. This procedure shall be repeated until the Pool Characteristics
are satisfied after taking into account the addition of the potential Subsequent
Mortgage Loans.

         (f) In case any provision of this Subsequent Transfer Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions or obligations shall not in any way be affected or
impaired thereby.

         (g) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail.

         (h) This Subsequent Transfer Agreement shall be governed by, and shall
be construed and enforced in accordance with the laws of the State of New York.

         (i) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.

                                      Q-2

<PAGE>

                  IN WITNESS WHEREOF, the parties to this Subsequent Transfer
Agreement 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: __________________________
                                                 Name:
                                                 Title:

                                                 COUNTRYWIDE HOME LOANS, INC.,
                                                          as Seller
                                                 By: __________________________
                                                 Name:
                                                 Title:

                                                 THE BANK OF NEW YORK,
                                                 not in its individual capacity,
                                                 but solely as Trustee

                                                   By: ________________________
                                                   Name:
                                                   Title

                                      Q-3

<PAGE>

                                       R-1

                                    EXHIBIT R

                            FORM OF CORRIDOR CONTRACT

                                      R-1

<PAGE>

                                    EXHIBIT S

                 FORM OF CORRIDOR CONTRACT ASSIGNMENT AGREEMENT

                              ASSIGNMENT AGREEMENT

         ASSIGNMENT AGREEMENT, dated as of ________________ (the "Assignment
Effective Date"), among _______________________ ("Assignor"),
____________________________________ ("Assignee") by ___________________, not in
its individual capacity but as trustee for Assignee, and Bank of America, N.A.
("Remaining Party") (the "Assignment Agreement").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, Assignor desires to assign all of its rights and delegate all
of its duties and obligations to Assignee in that certain confirmation dated
__________________ (the "Assigned Transaction"), a copy of such Assigned
Transaction being attached hereto as Exhibit I;

         WHEREAS, Assignor and Remaining Party have executed and delivered an
ISDA Master Agreement dated __________________ (the "Assignor Swap Agreement");

         WHEREAS, Assignee and Remaining Party have agreed that, from and after
the Assignment Effective Date, the Assigned Transaction shall supplement, form a
part of and be subject to an ISDA Master Agreement, as defined in paragraph 2
below (the "Assignee Swap Agreement") and, for the avoidance of doubt, shall not
supplement, form a part of or be subject to the Assignor Swap Agreement;

         WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction, by the incorporation of such Assigned Transaction under the
Assignee Swap Agreement; and

         WHEREAS, Assignor desires to obtain the written consent of Remaining
Party to the assignment, delegation, and assumption and Remaining Party desires
to grant such consent in accordance with the terms hereof;

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:

         1. Assignment and Assumption. Effective as of and from the Assignment
Effective Date, Assignor hereby assigns all of its rights and delegates all of
its duties and obligations to Assignee and Assignee hereby assumes all the
Assignor's rights, duties, and obligations under the Assigned Transaction
arising on or after the Assignment Effective Date (subject to Paragraph 3
below); provided, however, that as of and from the Assignment Effective Date,
the Assigned

<PAGE>

Transaction shall supplement, form part of and be subject to the Assignee Swap
Agreement (as defined in paragraph 2 below) and the Assigned Transaction shall
accordingly constitute a Transaction and a Confirmation as such terms are
defined in the Assignee Swap Agreement.

         2. Assignee Swap Agreement. The Assignee and Remaining Party hereby
agree that the Assigned Transaction will supplement, form a part of, and be
subject to an agreement in the form of the 1992 ISDA Master Agreement
(Multicurrency-Cross Border) between the Assignee and the Remaining Party as if
the parties had executed an agreement in such form (but without any Schedule
except for the election of (i) the laws of the State of New York (without
reference to choice of law doctrine) as the governing law and (ii) USD as the
Termination Currency, and the items specified in paragraph 11 below) on the
Assignment Effective Date. In the event of any inconsistency between the
provisions of that agreement and the Assigned Transaction, the Assigned
Transaction will prevail.

         3. Payments. Each party hereby agrees that the Assignee or the
Remaining Party, as the case may be, shall be responsible for all payments
accruing from the Calculation Period that begins on _________________ and the
Assignor or the Remaining Party, as the case may be, shall be responsible for
all payments accruing prior to such Calculation Period. All payments remitted by
Remaining Party under the Assigned Transaction shall be made by wire transfer
according to the following instructions:

                                    ____________________
                                    ABA # ______________
                                    GLA # ______________
                                    For Further Credit: _____
                                    Attn:    ______________

         4. Release. Effective as of and from the Assignment Effective Date,
Remaining Party and Assignor hereby release one another from all duties and
obligations owed under and in respect of the Assigned Transaction, and Assignor
hereby terminates its rights under and in respect of the Assigned Transaction.

         5. Consent and Acknowledgment of Remaining Party. Remaining Party
hereby consents to the assignment and delegation by Assignor to Assignee of all
the rights, duties, and obligations of the Assignor under the Assigned
Transaction pursuant to this Assignment Agreement.

         6. Representations. Each party hereby represents and warrants to the
other parties as follows:

         (a)      It is duly organized, validly existing and in good standing
                  under the laws of its organization or incorporation;
         (b)      It has the power to execute and deliver this Assignment
                  Agreement; and

<PAGE>

         (c)      Its obligations under this Assignment Agreement constitute its
                  legal, valid and binding obligations, enforceable in
                  accordance with their respective terms; except as enforcement
                  thereof may be limited by bankruptcy, insolvency,
                  reorganization, moratorium, receivership, conservatorship, or
                  other laws affecting the enforcement or creditors' rights
                  generally or by general equity principles.

     As of the Assignment Effective Date, each of Assignor and Remaining Party
     represent that no event or condition has occurred and is continuing that
     constitutes an Event of Default, a Potential Event of Default or to the
     party's knowledge, a Termination Event (as such terms are defined in the
     Assignor Swap Agreement), with respect to the party, and no such event
     would occur as a result of the party's entering into or performing its
     obligations under this Assignment Agreement.

         8. Indemnity. Each of the Assignor and the Remaining Party hereby
agrees to indemnify and hold harmless the Assignee with respect to any and all
claims arising under the Assigned Transaction prior to the Assignment Effective
Date (subject to paragraph 3 above). Each of the Assignee and the Remaining
Party hereby agrees to indemnify and hold harmless the Assignor with respect to
any and all claims arising under the Assigned Transaction on or after the
Assignment Effective Date (subject to paragraph 3 above).

         9. Governing Law. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York without reference
to the conflict of laws provisions thereof (except Section 5-1401 of the New
York General Obligations Law).

         10. Counterparts. This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission or electronically
sent via the Internet using such encoding and security procedures as may be
specified by the parties by subsequent agreement), each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same instrument.

         11. Provisions Deemed Incorporated into the Assignee Swap Agreement.

         (a) Limitation on Liability. Assignee and Remaining Party agree to the
following: (i) the sole recourse in respect of the obligations of Assignee
hereunder and under the Assigned Transaction shall be to the Trust Fund (as
defined in the Pooling and Servicing Agreement, dated as of _____________, among
_____________, as depositor, Assignor, as seller, _____________, as master
servicer, and _____________________________, as trustee (the "Pooling and
Servicing Agreement")); (ii) _____________ is entering into this Assignment

<PAGE>

Agreement solely in its capacity as trustee and not in its individual capacity
under the Pooling and Servicing Agreement; and (iii) in no case shall
_______________ (or any person acting as successor trustee under the Pooling and
Servicing Agreement) be personally liable for or on account of any of the
statements, representations, warranties, covenants or obligations stated to be
those of Assignee under the terms of the Assigned Transaction, all such
liability, if any, being expressly waived by Assignee and Remaining Party and
any person claiming by, through or under either such party. Notwithstanding the
foregoing (or anything to the contrary in this Assignment Agreement),
_____________shall be liable for its own negligence, willful misconduct, bad
faith and/or fraud.

         (b) Limitation on Events of Default. Notwithstanding the terms of
Sections 5 and 6 of the Assignee Swap Agreement, if at any time and so long as
the Assignee has satisfied in full all its payment obligations under Section
2(a)(i) of the Assignee Swap Agreement and has at the time no future payment
obligations, whether absolute or contingent, under such Section, then unless
Remaining Party is required pursuant to appropriate proceedings to return to the
Assignee or otherwise returns to the Assignee upon demand of the Assignee any
portion of any such payment, (a) the occurrence of an event described in Section
5(a)(i) of the Assignee Swap Agreement with respect to the Assignee shall not
constitute an Event of Default or Potential Event of Default with respect to the
Assignee as Defaulting Party and (b) Remaining Party shall be entitled to
designate an Early Termination Date pursuant to Section 6 of the Assignee Swap
Agreement only as a result of the occurrence of a Termination Event set forth in
either Section 5(b)(i) or 5(b)(ii) of the Assignee Swap Agreement with respect
to Remaining Party as the Affected Party or Section 5(b)(iii) with respect to
Remaining Party as the Burdened Party.

         (c) Address for Notices:

         Address for notices or communications to the Assignee:

         Address: ___________________________________________________________
         Attention: ________________
         Facsimile: ________________
         Phone: ___________________

         (For all purposes).

         (d) Non-Petition. Remaining Party hereby irrevocably and
unconditionally agrees that it will not institute against, or join any other
person in instituting against, the Assignee, any bankruptcy, reorganization,
arrangement, insolvency, or similar proceeding under the laws of the United
States, the Cayman Islands or any other jurisdiction for the non-payment of any
amount due hereunder or any other reason until the payment in full of the
Offered Certificates (as defined in the Pooling and Servicing Agreement) and the
expiration of a period of one year plus one day (or, if longer, the applicable
preference period) following such payment. Nothing herein shall prevent
Remaining Party from participating in any such proceeding once commenced.

<PAGE>

         (e) Additional Provisions. Notwithstanding the terms of Sections 5 and
6 of the Assignee Swap Agreement, the provisions of Sections 5(a)(ii) and
5(a)(iv) and shall not apply to Remaining Party or the Assignee.

         (f) No Set-off. Notwithstanding any provision of this Assignment
Agreement or any other existing or future agreement, each party irrevocably
waives any and all rights it may have to set off, recoup or otherwise withhold
or suspend or condition payment or performance of any obligation between it and
the other party hereunder against any obligation between it and the other party
under any other agreements. The provisions for Set-off set forth in Section 6(e)
of the Agreement shall not apply for purposes of this Transaction.

         (g) Section 3 of the Assignee Swap Agreement is hereby amended by
adding at the end thereof the following subsection (g):

         "(g) Relationship Between Parties.

                  Each of Assignor, Assignee and Remaining Party represents to
the other on each date when it enters into a Transaction that:

                  (1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction (whether written or
oral), other than the representations expressly made in this Agreement or the
Confirmation in respect of that Transaction.

                  (2) Evaluation and Understanding.

                           (a) It has the capacity to evaluate (internally or
through independent professional advice) the Transaction and has made its own
decision to enter into the Transaction; and

                           (b) It understands the terms, conditions and risks of
the Transaction and is willing and able to accept those terms and conditions and
to assume those risks, financially and otherwise.

                  (3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its underlying
assets or liabilities or in connection with a line of business.

                  (4) Principal. It is entering into the Transaction as
principal, and not as agent or in any other capacity, fiduciary or otherwise.

                  (5) Eligible Contract Participant. It constitutes an "eligible
contract participant" as such term is defined in Section 1(a)12 of the Commodity
Exchange Act, as amended."

         (h) Substitution Event. If at any time the long-term senior unsecured
deposit ratings of Remaining Party shall be rated below "____" by Standard &
Poor's Ratings Service, below

<PAGE>

"____" by Moody's Investors Service, Inc., and below "____" by Fitch, Inc., and
within ten (10) Local Business Days following the publication date(s) of such
ratings, Remaining Party, using its good faith efforts, fails to find an entity
acceptable to the Assignee, which acceptance shall not be unreasonably withheld
or delayed, to whom all of Remaining Party's interests and obligations under
this Agreement shall be assigned at no cost to the Assignee, and following which
Remaining Party shall be released from all further obligations under this
Agreement, then, at the option of the Assignee, such failure shall constitute an
Additional Termination Event with Remaining Party as the Affected Party.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement as of the date first above written.

                                            [NAME]

                                            By:     ___________________
                                            Name: _____________________
                                            Title:   __________________

                                            [NAME]

                                            By:      __________________
                                            Name:  ____________________
                                            Title:    _________________

                                            [NAME]

                                            By: _______________________
                                            Name:  ____________________
                                            Title:    _________________

<PAGE>

                                    EXHIBIT T

                OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS

                           ASSET-BACKED CERTIFICATES,
                                Series 2004-ECC1

                                     [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 June 1, 2004, (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as Seller, Countrywide Home
Loans Servicing LP, as Master Servicer and The Bank of New York, as Trustee.
Capitalized terms used herein shall have the meanings ascribed to such terms in
the Pooling and Servicing Agreement.

                  __________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:

                  With respect to the Distribution Date in _________ 20[ ] and
each Mortgage Loan set forth in the attached schedule:

                  1. A Principal Prepayment in full or in part was received
during the related Prepayment Period;

                  2. Any Prepayment Charge due under the terms of the Mortgage
Note with respect to such Principal Prepayment was or was not, as indicated on
the attached schedule using "Yes" or "No", received from the Mortgagor and
deposited in the Certificate Account;

                  3. As to each Mortgage Loan set forth on the attached schedule
for which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:

                           (i) the Master Servicer's determination that such
         waiver would maximize recovery of Liquidation Proceeds for such
         Mortgage Loan, taking into account the value of such Prepayment Charge,
         or

<PAGE>

                           (ii)(A) the enforceability thereof is limited (1) by
         bankruptcy, insolvency, moratorium, receivership, or other similar law
         relating to creditors' rights generally or (2) due to acceleration in
         connection with a foreclosure or other involuntary payment, or (B) the
         enforceability is otherwise limited or prohibited by applicable law;
         and

                  4. We certify that all amounts due in connection with the
waiver of a Prepayment Charge inconsistent with clause 3 above which are
required to be deposited by the Servicer pursuant to Section 3.20 of the Pooling
and Servicing Agreement, have been or will be so deposited.

                                           COUNTRYWIDE HOME LOANS SERVICING LP,
                                             as Master Servicer

                                           By:  COUNTRYWIDE GP, INC.

                                           By:
                                              ----------------------------------
                                             Name:
                                             Title:

<PAGE>

         SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
                      DURING THE RELATED PREPAYMENT PERIOD

<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------- --------------------------------------
LOAN NUMBER                              CLAUSE 2:  YES/NO                      CLAUSE 3:  (I) OR (II)
---------------------------------------- -------------------------------------- --------------------------------------
<S>                                      <C>                                    <C>

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

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

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

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

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

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

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

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

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

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

---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>

<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

----------------------------------------------------- ------------------------------------------------------------------
STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
----------------------------------------------------- ------------------------------------------------------------------
<S>                                                   <C>
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
----------------------------------------------------- ------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------
                                     STANDARD & POOR'S COVERED LOAN CATEGORIZATION

----------------------------------------------------- ------------------------------------------------------------------
STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
----------------------------------------------------- ------------------------------------------------------------------
Georgia (Oct. 1, 2002-March 6, 2003)                  Covered Loan
----------------------------------------------------- ------------------------------------------------------------------

<PAGE>

----------------------------------------------------- ------------------------------------------------------------------
New Jersey                                            Covered Home Loan
----------------------------------------------------- ------------------------------------------------------------------
                                      STANDARD & POOR'S HOME LOAN CATEGORIZATION
----------------------------------------------------- ------------------------------------------------------------------
STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
----------------------------------------------------- ------------------------------------------------------------------
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>BEAR STEARNS ASSET BACKED SECURITIES I LLC,

                                   Depositor,

                            EMC MORTGAGE CORPORATION,

                           Seller and Master Servicer,

                                       and

                       LASALLE BANK NATIONAL ASSOCIATION,

                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT

                            Dated as of June 1, 2004

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

              BEAR STEARNS ASSET BACKED SECURITIES I TRUST 2004-HE5

                   ASSET-BACKED CERTIFICATES, SERIES 2004-HE5

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               PAGE
<S>                                                                                                            <C>

                                                     ARTICLE I

                                                    DEFINITIONS
         Section 1.01      DEFINED TERMS..........................................................................5
         Section 1.02      ALLOCATION OF CERTAIN INTEREST SHORTFALLS.............................................48

                                                    ARTICLE II

                                             CONVEYANCE OF TRUST FUND
                                          REPRESENTATIONS AND WARRANTIES
         Section 2.01      CONVEYANCE OF TRUST FUND..............................................................50
         Section 2.02      ACCEPTANCE OF THE MORTGAGE LOANS......................................................51
         Section 2.03      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER SERVICER
                           AND THE SELLER........................................................................54
         Section 2.04      REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.......................................58
         Section 2.05      DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH SUBSTITUTIONS
                           AND REPURCHASES.......................................................................60
         Section 2.06      COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.........................................60

                                                    ARTICLE III

                                ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
         Section 3.01      THE MASTER SERVICER TO ACT AS MASTER SERVICER.........................................62
         Section 3.02      DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS............................................63
         Section 3.03      SUBSERVICERS..........................................................................64
         Section 3.04      DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE MASTER SERVICER
                           TO BE HELD FOR TRUSTEE................................................................65
         Section 3.05      MAINTENANCE OF HAZARD INSURANCE.......................................................65
         Section 3.06      PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS......................................66
         Section 3.07      MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES................................66
         Section 3.08      FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.........................................67
         Section 3.09      REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION OF
                           EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES; REPURCHASES OF CERTAIN
                           MORTGAGE LOANS........................................................................67
         Section 3.10      SERVICING COMPENSATION................................................................70
         Section 3.11      REO PROPERTY..........................................................................70
         Section 3.12      LIQUIDATION REPORTS...................................................................70
         Section 3.13      ANNUAL CERTIFICATE AS TO COMPLIANCE...................................................71
         Section 3.14      ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' SERVICING REPORT.....................71
         Section 3.15      BOOKS AND RECORDS.....................................................................71
         Section 3.16      REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.................................72
         Section 3.17      UCC...................................................................................74

                                                         i

<PAGE>

         Section 3.18      OPTIONAL PURCHASE OF CERTAIN MORTGAGE LOANS...........................................74
         Section 3.19      OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF MORTGAGE RATES
                           AND SCHEDULED PAYMENTS................................................................74
         Section 3.20      RESERVE FUND..........................................................................75
         Section 3.21      ADVANCING FACILITY....................................................................76

                                                    ARTICLE IV

                                                     ACCOUNTS
         Section 4.01      COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED ACCOUNT...............................78
         Section 4.02      PERMITTED WITHDRAWALS FROM THE PROTECTED ACCOUNT......................................80
         Section 4.03      COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW
                           ACCOUNTS..............................................................................82
         Section 4.04      DISTRIBUTION ACCOUNT..................................................................82
         Section 4.05      PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION ACCOUNT.....................83
         Section 4.06      CLASS P CERTIFICATE ACCOUNT...........................................................83

                                                     ARTICLE V

                                            DISTRIBUTIONS AND ADVANCES
         Section 5.01      ADVANCES..............................................................................84
         Section 5.02      COMPENSATING INTEREST PAYMENTS........................................................85
         Section 5.03      REMIC DISTRIBUTIONS...................................................................85
         Section 5.04      DISTRIBUTIONS.........................................................................85
         Section 5.04A     ALLOCATION OF REALIZED LOSSES.........................................................90
         Section 5.05      MONTHLY STATEMENTS TO CERTIFICATEHOLDERS..............................................92
         Section 5.06      REMIC DESIGNATIONS AND REMIC DISTRIBUTIONS............................................95

                                                    ARTICLE VI

                                                 THE CERTIFICATES
         Section 6.01      THE CERTIFICATES......................................................................98
         Section 6.02      CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF
                           CERTIFICATES..........................................................................99
         Section 6.03      MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES....................................102
         Section 6.04      PERSONS DEEMED OWNERS................................................................103
         Section 6.05      ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES............................103
         Section 6.06      BOOK-ENTRY CERTIFICATES..............................................................103
         Section 6.07      NOTICES TO DEPOSITORY................................................................104
         Section 6.08      DEFINITIVE CERTIFICATES..............................................................104
         Section 6.09      MAINTENANCE OF OFFICE OR AGENCY......................................................105

                                                    ARTICLE VII

                                       THE DEPOSITOR AND THE MASTER SERVICER
         Section 7.01      LIABILITIES OF THE DEPOSITOR AND THE MASTER SERVICER.................................105

                                                        ii

<PAGE>

         Section 7.02      MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER SERVICER......................106
         Section 7.03      INDEMNIFICATION OF THE TRUSTEE AND THE MASTER SERVICER...............................106
         Section 7.04      LIMITATIONS ON LIABILITY OF THE DEPOSITOR, THE MASTER SERVICER AND
                           OTHERS...............................................................................106
         Section 7.05      MASTER SERVICER NOT TO RESIGN........................................................108
         Section 7.06      SUCCESSOR MASTER SERVICER............................................................108
         Section 7.07      SALE AND ASSIGNMENT OF MASTER SERVICING..............................................108

                                                   ARTICLE VIII

                                      DEFAULT; TERMINATION OF MASTER SERVICER
         Section 8.01      EVENTS OF DEFAULT....................................................................109
         Section 8.02      TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.............................................111
         Section 8.03      NOTIFICATION TO CERTIFICATEHOLDERS...................................................112
         Section 8.04      WAIVER OF DEFAULTS...................................................................112

                                                    ARTICLE IX

                                              CONCERNING THE TRUSTEE
         Section 9.01      DUTIES OF TRUSTEE....................................................................113
         Section 9.02      CERTAIN MATTERS AFFECTING THE TRUSTEE................................................114
         Section 9.03      TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS................................116
         Section 9.04      TRUSTEE MAY OWN CERTIFICATES.........................................................117
         Section 9.05      TRUSTEE'S FEES AND EXPENSES..........................................................117
         Section 9.06      ELIGIBILITY REQUIREMENTS FOR TRUSTEE.................................................117
         Section 9.07      INSURANCE............................................................................118
         Section 9.08      RESIGNATION AND REMOVAL OF TRUSTEE...................................................118
         Section 9.09      SUCCESSOR TRUSTEE....................................................................119
         Section 9.10      MERGER OR CONSOLIDATION OF TRUSTEE...................................................119
         Section 9.11      APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE........................................119
         Section 9.12      TAX MATTERS..........................................................................120

                                                     ARTICLE X

                                                    TERMINATION
         Section 10.01     TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL MORTGAGE LOANS.....................123
         Section 10.02     FINAL DISTRIBUTION ON THE CERTIFICATES...............................................123
         Section 10.03     ADDITIONAL TERMINATION REQUIREMENTS..................................................125

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS
         Section 11.01     AMENDMENT............................................................................125
         Section 11.02     RECORDATION OF AGREEMENT; COUNTERPARTS...............................................127
         Section 11.03     GOVERNING LAW........................................................................127

                                                        iii

<PAGE>

         Section 11.04     INTENTION OF PARTIES.................................................................127
         Section 11.05     NOTICES..............................................................................128
         Section 11.06     SEVERABILITY OF PROVISIONS...........................................................129
         Section 11.07     ASSIGNMENT...........................................................................129
         Section 11.08     LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...........................................129
         Section 11.09     INSPECTION AND AUDIT RIGHTS..........................................................130
         Section 11.10     CERTIFICATES NONASSESSABLE AND FULLY PAID............................................130
</TABLE>

                                                        iv

<PAGE>

EXHIBITS

Exhibit A-1       Form of Class A Certificates
Exhibit A-2       Form of Class M Certificates
Exhibit A-3       Form of Class P Certificates
Exhibit A-4       Form of Class CE Certificates
Exhibit A-5       Form of Class R Certificates
Exhibit B         Mortgage Loan Schedule
Exhibit C         [Reserved]
Exhibit D         Form of Transfer Affidavit
Exhibit E         Form of Transferor Certificate
Exhibit F         Form of Investment Letter (Non-Rule 144A)
Exhibit G         Form of Rule 144A and Related Matters Certificate
Exhibit H         Form of Request for Release
Exhibit I         DTC Letter of Representations
Exhibit J         Schedule of Mortgage Loans with Lost Notes
Exhibit K         Form of Custodial Agreement
Exhibit L         Form of Back-Up Certification
Exhibit M         Form of Mortgage Loan Purchase Agreement

                                        v

<PAGE>

                  POOLING AND SERVICING AGREEMENT, dated as of June 1, 2004,
among BEAR STEARNS ASSET BACKED SECURITIES I LLC, a Delaware limited liability
company, as depositor (the "Depositor"), EMC MORTGAGE CORPORATION, a Delaware
corporation, as seller (in such capacity, the "Seller") and as master servicer
(in such capacity, the "Master Servicer") and LASALLE BANK NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity, but solely as
trustee (the "Trustee").

                              PRELIMINARY STATEMENT

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

                                     REMIC I
                                     -------

                  As provided herein, the Trustee will 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 and the
Yield Maintenance Agreements) as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC I". The Class R-1
Certificates 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 Uncertificated REMIC I Pass-Through
Rate, the initial Uncertificated Principal Balance and, solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests (as defined herein).
None of the REMIC I Regular Interests will be certificated.

<TABLE>
<CAPTION>
                                  Uncertificated
                                      REMIC I                Initial Uncertificated            Latest Possible
        Designation              Pass-Through Rate             Principal Balance              Maturity Date (1)
        -----------              -----------------             -----------------              -----------------
<S>                                <C>                          <C>                            <C>
AA                                 Variable(2)                  $516,717,849.96                July 25, 2034
I-A-1                              Variable(2)                  $    634,675.00                July 25, 2034
I-A-2                              Variable(2)                  $    103,885.00                July 25, 2034
II-A                               Variable(2)                  $    831,070.00                July 25, 2034
III-A                              Variable(2)                  $  2,664,295.00                July 25, 2034
M-1                                Variable(2)                  $    313,720.00                July 25, 2034
M-2                                Variable(2)                  $    253,085.00                July 25, 2034
M-3                                Variable(2)                  $     71,180.00                July 25, 2034
M-4                                Variable(2)                  $     60,635.00                July 25, 2034
M-5                                Variable(2)                  $     52,725.00                July 25, 2034
M-6                                Variable(2)                  $     52,725.00                July 25, 2034
M-7                                Variable(2)                  $     92,270.00                July 25, 2034
ZZ                                 Variable(2)                  $  5,414,997.24                July 25, 2034

                                                        -1-

<PAGE>

P                                    0.00%(2)                   $        100.00                July 25, 2034
1A                                   Variable(2)                $      3,623.81                July 25, 2034
1B                                   Variable(2)                $     18,395.01                July 25, 2034
2A                                   Variable(2)                $      4,077.74                July 25, 2034
2B                                   Variable(2)                $     20,699.14                July 25, 2034
3A                                   Variable(2)                $     13,072.58                July 25, 2034
3B                                   Variable(2)                $     66,358.48                July 25, 2034
XX                                   Variable(2)                $527,136,885.46                July 25, 2034
</TABLE>
---------------------------
(1)      Solely 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 "Uncertificated REMIC I
         Pass-Through Rate" herein.

                                    REMIC II
                                    --------

                  As provided herein, the Trustee will make an election to treat
the segregated pool of assets consisting of the REMIC I Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC II". The Class R-2 Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.

                  The following table irrevocably sets forth the Class
designation, Pass-Through Rate and Initial Certificate Principal Balance for
each Class of Certificates that represents one or more of the "regular
interests" in REMIC II created hereunder.

<TABLE>
<CAPTION>
                                                          Initial Certificate Principal        Latest Possible
        Designation              Pass Through Rate                   Balance                   Maturity Date(1)
        -----------              -----------------                   -------                   ----------------
<S>                                  <C>                        <C>                              <C>
           I-A-1                     Variable(2)                $126,935,000                     July 25, 2034
           I-A-2                     Variable(2)                $ 20,777,000                     July 25, 2034
           II-A                      Variable(2)                $166,214,000                     July 25, 2034
           III-A                     Variable(2)                $532,859,000                     July 25, 2034
            M-1                      Variable(2)                $ 62,744,000                     July 25, 2034
            M-2                      Variable(2)                $ 50,617,000                     July 25, 2034
            M-3                      Variable(2)                $ 14,236,000                     July 25, 2034
            M-4                      Variable(2)                $ 12,127,000                     July 25, 2034
            M-5                      Variable(2)                $ 10,545,000                     July 25, 2034
            M-6                      Variable(2)                $ 10,545,000                     July 25, 2034
            M-7                      Variable(2)                $ 18,454,000                     July 25, 2034
     Class CE Interest               Variable(2)(3)             $ 28,473,224.41                  July 25, 2034
     Class P Interest                0.00%(4)                   $        100.00                  July 25, 2034
</TABLE>
-------------------

                                       -2-

<PAGE>

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

                                    REMIC III
                                    ---------

                  As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the Class CE Interest as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III." The Class R-3 Interest represents the sole class
of "residual interests" in REMIC III for purposes of the REMIC Provisions.

                  The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Initial Certificate Principal Balance for the
indicated Class of Certificates that represents a "regular interest" in REMIC
III created hereunder:

<TABLE>
<CAPTION>
                                                                Initial Aggregate
                                                              Certificate Principal              Latest Possible
      Class Designation           Pass-Through Rate                  Balance                    Maturity Date(1)
      -----------------           -----------------                  -------                    ----------------
<S>                                  <C>                         <C>                              <C>
    Class CE Certificates            Variable(2)                 $28,473,224.41                   July 25, 2034
</TABLE>
---------------
(1)  Solely 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 the Class CE Certificates.
(2)  The Class CE Certificates will receive 100% of amounts received in respect
     of the Class CE Interest.

                                    REMIC IV
                                    --------

                  As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the Class P Interest as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC IV." The Class R-4 Interest represents the sole class of
"residual interests" in REMIC IV for purposes of the REMIC Provisions.

                  The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Initial Certificate Principal Balance for the
indicated Class of Certificates that represents a "regular interest" in REMIC IV
created hereunder:

<TABLE>
<CAPTION>
                                                                  Initial Aggregate
                                                                Certificate Principal            Latest Possible
      Class Designation             Pass-Through Rate                  Balance                  Maturity Date(1)
      -----------------             -----------------                  -------                  ----------------
<S>                                     <C>                            <C>                        <C>
    Class P Certificates                0.00%(2)                       $100.00                    July 25, 2034
</TABLE>

                                      -3-
<PAGE>

---------------
(1)      Solely 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 the Class P
         Certificates.
(2)      The Class P  Certificates  will  receive  100% of amounts  received  in
         respect of the Class P Interest.

                  The Trust Fund shall be named, and may be referred to as, the
"Bear Stearns Asset Backed Securities I Trust 2004-HE5." The Certificates issued
hereunder may be referred to as "Asset-Backed Certificates, Series 2004-HE5"
(including for purposes of any endorsement or assignment of a Mortgage Note or
Mortgage).

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

                                      -4-
<PAGE>

                                   ARTICLE I

                                  DEFINITIONS

         Section 1.01 DEFINED TERMS.

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

         ACCEPTED SERVICING PRACTICES: With respect to each Mortgage Loan, those
mortgage servicing practices (including collection procedures) that are in
accordance with all applicable statutes, regulations and prudent mortgage
banking practices for similar mortgage loans.

         ACCOUNT:  The Distribution  Account,  the Reserve Account,  the Class P
Certificate Account and the Protected Account.

         ACCRUAL PERIOD: With respect to the Certificates (other than the Class
CE, Class P and the Residual Certificates) and any Distribution Date, the period
from and including the immediately preceding Distribution Date (or with respect
to the first Accrual Period, the Closing Date) to and including the day prior to
such Distribution Date. With respect to the Class CE Certificates and any
Distribution Date, the calendar month immediately preceding such Distribution
Date. All calculations of interest on the Certificates (other than the Class CE,
Class P and the Residual Certificates) will be made on the basis of the actual
number of days elapsed in the related Accrual Period. All calculations of
interest on the Class CE Certificates will be made on the basis of a 360- day
year consisting of twelve 30-day months.

         ADVANCE: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Master Servicer as
provided in Section 5.01 hereof.

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

         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.

         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.

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

                                      -5-
<PAGE>

Subsequent Recoveries and Insurance Proceeds received in respect of such
Mortgage Loans after the last day of the related Prepayment Period.

         APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date and
a Class of Offered Certificates, the sum of the Realized Losses with respect to
the Mortgage Loans which have been applied in reduction of the Certificate
Principal Balance of that Class of Certificates pursuant to Section 5.04A of
this Agreement which have not previously been reimbursed.

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

         BASIS RISK SHORTFALL CARRY FORWARD AMOUNT: With respect to any
Distribution Date and any Class of Offered Certificates, equals the sum of (A)
the excess, if any, of (a) the amount of Current Interest that such Class would
have been entitled to receive on such Distribution Date had the Pass- Though
Rate applicable to such Class been calculated at a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin, over (b) the amount of
Current Interest that such Class received on such Distribution Date at a per
annum rate equal to the Net Rate Cap and (B) the amount in clause (A) for all
previous Distribution Dates not previously paid, together with interest thereon
at a rate equal to the related Pass-Through Rate for such Distribution Date.

         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 6.06). As of the Closing
Date, each Class of Regular Certificates (other than the Class M-7, Class CE and
Class P 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 City of New York, New York, Chicago,
Illinois, Minneapolis, Minnesota or the city in which the Corporate Trust Office
of the Trustee or the principal office of the Master Servicer is located are
authorized or obligated by law or executive order to be closed.

         CALENDAR QUARTER: January 1 to March 31, April 1 to June 30, July 1 to
September 30, or October 1 to December 31, as applicable.

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

                                      -6-
<PAGE>

         CERTIFICATE MARGIN: With respect to the Class I-A-1 Certificates and,
for purposes of the definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest I-A-1, 0.190%.

         With respect to the Class I-A-2 Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
I-A-2, 0.500% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 1.000% in the case of each
Distribution Date thereafter.

         With respect to the Class II-A Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest
II-A, 0.255% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 0.510% in the case of each
Distribution Date thereafter.

         With respect to the Class III-A Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest
III-A, 0.275% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 0.550% in the case of each
Distribution Date thereafter.

         With respect to the Class M-1 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-1,
0.570% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 0.855% in the case of each Distribution
Date thereafter.

         With respect to the Class M-2 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-2,
1.250% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 1.875% in the case of each Distribution
Date thereafter.

         With respect to the Class M-3 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-3,
1.550% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 2.325% in the case of each Distribution
Date thereafter.

         With respect to the Class M-4 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-4,
1.950% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 2.925% in the case of each Distribution
Date thereafter.

         With respect to the Class M-5 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-5,
2.150% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 3.225% in the case of each Distribution
Date thereafter.

         With respect to the Class M-6 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-6,
3.750% in the case of each Distribution

                                      -7-
<PAGE>

Date through and including the first possible Optional Termination Date and
5.625% in the case of each Distribution Date thereafter.

         With respect to the Class M-7 Certificates and, for purposes of the
definition of "One-Month LIBOR Pass-Through Rate", REMIC I Regular Interest M-7,
4.000% in the case of each Distribution Date through and including the first
possible Optional Termination Date and 6.000% in the case of each Distribution
Date thereafter.

         CERTIFICATE NOTIONAL BALANCE: With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Principal Balance of the REMIC I
Regular Interests (other than REMIC I Regular Interest P) for such Distribution
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 any
Class CE Certificate or Class R Certificate) and as of any Distribution Date,
the Initial Certificate Principal Balance of such Certificate plus, in the case
of a Class M Certificate, any Subsequent Recoveries added to the Certificate
Principal Balance of such Certificate pursuant to Section 5.04(b), 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 5.04, and (ii) any Applied Realized Loss Amounts allocated
to such Certificate on previous Distribution Dates.

         CERTIFICATE REGISTER:  The register maintained pursuant to Section 6.02
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 Book- Entry Certificates).

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

         CLASS A  CERTIFICATES:  The Class I-A-1,  Class  I-A-2,  Class II-A and
Class III-A Certificates.

         CLASS A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the Principal Distribution Amount for such
Distribution Date and (y) the excess, if any, of (i) the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date, over (ii) the lesser of (a) the product of (1) 60.60% and (2)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period, and (b) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $5,272,631.

         CLASS I-A CERTIFICATE: Any of the Class I-A-1 Certificates or the Class
I-A-2 Certificates.

         CLASS I-A-1 CERTIFICATE: Any Certificate designated as a "Class I-A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of

                                      -8-
<PAGE>

distributions provided for the Class I-A-1 Certificates as set forth herein and
evidencing a Regular Interest in REMIC II.

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

         CLASS I-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
with respect to the Class I-A Certificates and any Distribution Date, is the
product of the Class A Principal Distribution Amount and a fraction, the
numerator of which is the Principal Funds for Loan Group I for such Distribution
Date and the denominator of which is the Principal Funds for all Loan Groups for
such Distribution Date.

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

         CLASS II-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
with respect to the Class II-A Certificates and any Distribution Date, is the
product of the Class A Principal Distribution Amount and a fraction, the
numerator of which is the Principal Funds for Loan Group II for such
Distribution Date and the denominator of which is the Principal Funds for all
Loan Groups for such Distribution Date.

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

         CLASS III-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
with respect to the Class III-A Certificates and any Distribution Date, is the
product of the Class A Principal Distribution Amount and a fraction, the
numerator of which is the Principal Funds for Loan Group III for such
Distribution Date and the denominator of which is the Principal Funds for all
Loan Groups for such Distribution Date.

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

         CLASS CE DISTRIBUTION AMOUNT: With respect to any Distribution Date,
the sum of (i) the Current Interest for the Class CE Interest for such
Distribution Date and (ii) any Overcollateralization Release Amount for such
Distribution Date; provided, however that on any Distribution Date after the
Distribution Date on which the Certificate Principal Balances of the Class

                                      -9-
<PAGE>

A Certificates and Class M Certificates have been reduced to zero, the Class CE
Distribution Amount shall include the Overcollateralization Amount.

         CLASS CE INTEREST: An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class CE Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.

         CLASS CE NOTIONAL AMOUNT:   $1,054,526,224.41.

         CLASS M CERTIFICATE: Any one of the Class M-1 Certificates, the Class
M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
Class M-5 Certificates, the Class M-6 Certificates and the Class M-7
Certificates.

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

         CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of (1) the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the distribution of the Class A Principal Distribution
Amount on such Distribution Date and (2) the Certificate Principal Balance of
the Class M-1 Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 72.50% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $5,272,631.

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

         CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount and the Class M-1 Principal Distribution Amount and (y) the
excess, if any, of (a) the sum of (1) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Class A Principal Distribution Amount on such Distribution Date), (2) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (3) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 82.10% and (y) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period, and (2) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,272,631.

                                      -10-
<PAGE>

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

         CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount and the Class
M-2 Principal Distribution Amount and (y) the excess, if any, of (a) the sum of
(1) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the distribution of the Class A Principal
Distribution Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (4) the Certificate Principal
Balance of the Class M-3 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 84.80% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $5,272,631.

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

         CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal Distribution Amount
and (y) the excess, if any, of (a) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (2) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date) and (5) the Certificate Principal
Balance of the Class M-4 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 87.10% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $5,272,631.

         CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of

                                      -11-
<PAGE>

distributions provided for the Class M-5 Certificates as set forth herein and
evidencing a Regular Interest in REMIC II.

         CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount and
the Class M-4 Principal Distribution Amount and (y) the excess, if any, of (a)
the sum of (1) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (2) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (4) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (6) the Certificate Principal
Balance of the Class M-5 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 89.10% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $5,272,631.

         CLASS M-6 CERTIFICATE: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-6 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount and the Class M-5 Principal Distribution
Amount and (y) the excess, if any, of (a) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (3) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date), (5) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date), (6) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the distribution of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (7) the Certificate Principal
Balance of the Class M-6

                                      -12-
<PAGE>

Certificates immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 91.10% and (y) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period, and (2) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,272,631.

         CLASS M-7 CERTIFICATE: Any Certificate designated as a "Class M-7
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-7 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-7 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount, the Class M-5 Principal Distribution
Amount and the Class M-6 Principal Distribution Amount and (y) the excess, if
any, of (a) the sum of (1) the aggregate Certificate Principal Balance of the
Class A Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (2) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (4) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) (7) the Certificate Principal Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date) and (8) the Certificate Principal Balance of
the Class M-7 Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 94.60% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $5,272,631.

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

         CLASS P INTEREST: An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class P Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.

                                      -13-
<PAGE>

         CLASS P CERTIFICATE ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.05 in the name of the Trustee
for the benefit of the Class P Certificateholders.

         CLASS R-1 CERTIFICATE: Any Certificate designated a "Class R-1
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-5 hereto, evidencing the Residual Interest in REMIC I and representing the
right to the Percentage Interest of distributions provided for the Class R-1
Certificates as set forth herein.

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

         CLASS RX CERTIFICATE: Any Certificate designated a "Class RX
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-5 hereto, evidencing the ownership of the Class R-3 Interest and the Class R-4
Interest and representing the right to the Percentage Interest of distributions
provided for the Class RX Certificates as set forth herein.

         CLASS R-3 INTEREST: The uncertificated Residual Interest in REMIC III.

         CLASS R-4 INTEREST: The uncertificated Residual Interest in REMIC IV.

         CLOSING DATE: June 30, 2004.

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

         COMPENSATING INTEREST: An amount, not to exceed the Servicing Fee, to
be deposited in the Protected Account by the Master Servicer to the payment of a
Prepayment Interest Shortfall on a Mortgage Loan subject to this Agreement.

         CORPORATE TRUST OFFICE: The designated office of the Trustee where at
any particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at 135 South LaSalle Street, Suite 1625, Chicago, Illinois,
Attention: Global Securitization Trust Services Group - Bear Stearns Asset
Backed Securities I LLC, Series 2004-HE5, or at such other address as the
Trustee may designate from time to time.

         CORRESPONDING CERTIFICATE: With respect to each Uncertificated REMIC I
Regular Interest, the Certificate with the corresponding designation.

         CURRENT INTEREST: As of any Distribution Date, with respect to the
Certificates of each Class (other than the Class P Certificates and the Residual
Certificates), (i) the interest accrued on the Certificate Principal Balance or
Certificate Notional Balance or Uncertificated Notional Balance, as applicable,
during the related Accrual Period at the applicable Pass-Through Rate plus any
amount

                                      -14-
<PAGE>

previously distributed with respect to interest for such Certificate that has
been recovered as a voidable preference by a trustee in bankruptcy minus (ii)
the sum of (a) any Prepayment Interest Shortfall for such Distribution Date, to
the extent not covered by Compensating Interest and (b) any Relief Act Interest
Shortfalls during the related Due Period, provided, however, that for purposes
of calculating Current Interest for any such Class, amounts specified in clause
(ii) hereof for any such Distribution Date shall be allocated first to the Class
CE Certificates and Residual Certificates in reduction of amounts otherwise
distributable to such Certificates on such Distribution Date and then any excess
shall be allocated to each Class of Offered Certificates pro rata based on the
respective amounts of interest accrued pursuant to clause (i) hereof for each
such Class on such Distribution Date.

         CURRENT SPECIFIED ENHANCEMENT PERCENTAGE: With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class M Certificates and (ii) the
Overcollateralization Amount, in each case prior to the distribution of the
Principal Distribution Amount on such Distribution Date, by (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the end of the related Due
Period.

         CUSTODIAL AGREEMENT: An agreement dated as of June 30, 2004 among the
Depositor, the Seller, the Master Servicer, the Trustee and the Custodian in
substantially the form of Exhibit K hereto.

         CUSTODIAN: Wells Fargo Bank, National Association, or any successor
custodian appointed pursuant to the provisions hereof and the Custodial
Agreement.

         CUT-OFF DATE: The close of business on June 1, 2004.

         CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date. The aggregate Cut-off
Date Principal Balance of the Mortgage Loans is $1,054,526,224.41.

         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.

         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.

         DEFINITIVE CERTIFICATES: As defined in Section 6.06.

                                      -15-
<PAGE>

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

         DELINQUENCY EVENT: A Delinquency Event shall have occurred and be
continuing if at any time, (x) the percent equivalent of a fraction, the
numerator of which is the aggregate Stated Principal Balance of the Mortgage
Loans that are 60 days or more Delinquent (including for this purpose any such
Mortgage Loans in bankruptcy or foreclosure and Mortgage Loans with respect to
which the related Mortgaged Property is REO Property), and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans as
of the last day of the related Due Period exceeds (y) 33% of the Current
Specified 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 Principal Balance of this Certificate".

         DEPOSITOR: Bear Stearns Asset Backed Securities I LLC, a Delaware
limited liability company, or its successor in interest.

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

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

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

         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.

                                      -16-
<PAGE>

         DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.04 in the name of the Trustee
for the benefit of the Certificateholders designated "LaSalle Bank National
Association, in trust for registered holders of Bear Stearns Asset Backed
Securities I LLC, Asset-Backed Certificates, Series 2004-HE5". Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.

         DISTRIBUTION  ACCOUNT  DEPOSIT  DATE:  The  Business  Day prior to each
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 July 2004.

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

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

         ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (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, so long as 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, as evidenced in writing. Eligible Accounts
may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.

         EMC:  EMC  Mortgage  Corporation,  a  Delaware  corporation,   and  its
successors and assigns.

         ENCORE: Encore Credit Corp., and its successors and assigns.

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

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

                                      -17-
<PAGE>

         EVENT OF DEFAULT: As defined in Section 8.01 hereof.

         EXCESS CASHFLOW: With respect to any Distribution Date, an amount, if
any, equal to the sum of (a) the Remaining Excess Spread for such Distribution
Date and (b) the Overcollateralization Release Amount for such Distribution
Date.

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

         EXCESS SPREAD: With respect to any Distribution Date, the excess, if
any, of (i) the Interest Funds for such Distribution Date over (ii) the sum of
Current Interest on the Offered Certificates and Interest Carry Forward Amounts
on the Class A Certificates (other than Interest Carry Forward Amounts paid
pursuant to Section 5.04(a)(4)(A)), in each case for such Distribution Date.

         EXEMPTION: Prohibited Transaction Exemption 90-30, as amended from time
to time.

         EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the lesser of (i) the excess, if any, of the Overcollateralization Target
Amount for such Distribution Date over the Overcollateralization Amount for such
Distribution Date (after giving effect to distributions of principal on the
Certificates other than any Extra Principal Distribution Amount) and (ii) the
Excess Spread for such Distribution Date.

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

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

         FINAL  CERTIFICATION:  The  certification  substantially in the form of
Exhibit Three to the Custodial Agreement.

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

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

         FIXED RATE MORTGAGE LOAN: Each of the Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is not subject to
adjustment.

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

                                      -18-
<PAGE>

         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 Mortgage Loan.

         GROUP I LOANS:  The Mortgage  Loans  identified as such on the Mortgage
Loan Schedule.

         GROUP I PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the product of the Principal Distribution Amount for such Distribution
Date and a fraction, the numerator of which is the Principal Funds for the Loan
Group I for such Distribution Date and the denominator of which is the Principal
Funds for all Loan Groups for such Distribution Date.

         GROUP II LOANS:  The Mortgage Loans  identified as such on the Mortgage
Loan Schedule.

         GROUP II PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the product of the Principal Distribution Amount for such
Distribution Date and a fraction, the numerator of which is the Principal Funds
for the Loan Group II for such Distribution Date and the denominator of which is
the Principal Funds for all Loan Groups for such Distribution Date.

         GROUP III LOANS:  The Mortgage Loans identified as such on the Mortgage
Loan Schedule.

         GROUP III PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the product of the Principal Distribution Amount for such
Distribution Date and a fraction, the numerator of which is the Principal Funds
for the Loan Group III for such Distribution Date and the denominator of which
is the Principal Funds for all Loan Groups for such Distribution Date.

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

         INDEX: With respect to each Adjustable Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.

         INITIAL CERTIFICATION: The certification substantially in the form of
Exhibit One to the Custodial Agreement.

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

         INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.

         INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage Loans
pursuant to any Required Insurance Policy and 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

                                      -19-
<PAGE>

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 any insurance policy with respect
to the Mortgage Loans.

         INTEREST CARRY FORWARD AMOUNT: As of any Distribution Date and with
respect to each Class of Class A Certificates and Class M Certificates, the sum
of (i) the excess of (a) the Current Interest for such Class with respect to
such Distribution Date and any prior Distribution Dates over (b) the amount
actually distributed to such Class of Certificates with respect to interest on
such Distribution Dates and (ii) interest thereon (to the extent permitted by
applicable law) at the applicable Pass- Through Rate for such Class for the
related Accrual Period including the Accrual Period relating to such
Distribution Date.

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

         INTEREST FUNDS: With respect to each Loan Group and any Distribution
Date (i) the sum, without duplication, of (a) all scheduled interest collected
during the related Due Period with respect to the related Mortgage Loans less
the Servicing Fee, the Trustee Fee and the LPMI Fee, if any, (b) all Advances
relating to interest with respect to the related Mortgage Loans made on or prior
to the related Distribution Account Deposit Date, (c) all Compensating Interest
with respect to the related Mortgage Loans and required to be remitted by the
Master Servicer pursuant to this Agreement with respect to such Distribution
Date, (d) Liquidation Proceeds and Subsequent Recoveries with respect to the
related Mortgage Loans collected during the related Prepayment Period (to the
extent such Liquidation Proceeds and Subsequent Recoveries relate to interest),
and (e) all amounts relating to interest with respect to each Mortgage Loan in
such Loan Group repurchased by the Seller pursuant to Sections 2.02 and 2.03, by
EMC pursuant to Section 3.18 and by Encore pursuant to Section 8 of the Mortgage
Loan Purchase Agreement, in each case to the extent remitted by the Master
Servicer to the Distribution Account pursuant to this Agreement minus (ii) all
amounts relating to interest required to be reimbursed pursuant to Sections 4.02
and 4.05 or as otherwise set forth in this Agreement.

         INTERIM CERTIFICATION: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.

         LAST SCHEDULED  DISTRIBUTION  DATE:  Solely for purposes of the face of
the Certificates,  as follows: with respect to (i) the Certificates,  other than
the  Class  I-A-1  Certificates,   July  25,  2034  and  (ii)  the  Class  I-A-1
Certificates, August 25, 2031.

         LATEST POSSIBLE MATURITY DATE: The Distribution Date in the month
following the final scheduled maturity date of the Mortgage Loan in the Trust
Fund having the latest scheduled maturity date as of the Cut-off Date. For
purposes of the Treasury Regulations under Code section 860A

                                      -20-
<PAGE>

through 860G, the latest possible maturity date of each regular interest issued
by REMIC I, REMIC II, REMIC III and REMIC IV shall be the Latest Possible
Maturity Date.

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

         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 made a Final Recovery
Determination with respect thereto.

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

         LOAN-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.

         LOAN GROUP: Any of Loan Group I, Loan Group II or Loan Group III.

         LOAN GROUP I: The Mortgage  Loans included as such on the Mortgage Loan
Schedule.

         LOAN GROUP II: The Mortgage Loans included as such on the Mortgage Loan
Schedule.

         LOAN GROUP III:  The  Mortgage  Loans  included as such on the Mortgage
Loan Schedule.

         LPMI FEE: The fee payable to the insurer for each Mortgage Loan subject
to an LPMI Policy as set forth in such LPMI Policy.

         LPMI POLICY: A policy of mortgage guaranty insurance issued by an
insurer meeting the requirements of Fannie Mae and Freddie Mac in which the
Master Servicer or the related subservicer of the related Mortgage Loan is
responsible for the payment of the LPMI Fee thereunder from collections on the
related Mortgage Loan.

         MARKER RATE: With respect to the Class CE Interest and any Distribution
Date, a per annum rate equal to two (2) times the weighted average of the
Uncertificated REMIC I Pass-Through Rate for each of REMIC I Regular Interest
I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest II-A, REMIC I
Regular Interest III-A, REMIC I Regular Interest M-1, REMIC I Regular Interest
M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular
Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular Interest M-7 and
REMIC I Regular

                                      -21-
<PAGE>

Interest ZZ, with the rate on each such REMIC I Regular Interest (other than
REMIC I Regular Interest ZZ) subject to a cap equal to the lesser of (i) the
related One-Month LIBOR Pass-Through Rate for the Corresponding Certificate and
(ii) the Net Rate Cap for the Corresponding Certificate for the purpose of this
calculation for such Distribution Date and with the rate on REMIC I Regular
Interest ZZ subject to a cap of zero for the purpose of this calculation.

         MASTER SERVICER: EMC Mortgage Corporation, in its capacity as master
servicer, and its successors and assigns.

         MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by the Master 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 superceded 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.

         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.

         MAXIMUM UNCERTIFICATED ACCRUED INTEREST DEFERRAL AMOUNT: With respect
to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I Regular Interest
ZZ for such Distribution Date on a balance equal to the Uncertificated Principal
Balance of REMIC I Regular Interest ZZ minus the REMIC I Overcollateralized
Amount, in each case for such Distribution Date, over (ii) Uncertificated
Accrued Interest on REMIC I Regular Interest I-A-1, REMIC I Regular Interest
I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest III-A, REMIC I
Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest
M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular
Interest M-6 and REMIC I Regular Interest M-7 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 One-Month LIBOR Pass-Through Rate for the Corresponding
Certificate and (ii) the Net Rate Cap for the Corresponding Certificate for the
purpose of this calculation for such Distribution Date.

         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.

                                      -22-
<PAGE>

         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 STATEMENT:  The statement  delivered to the  Certificateholders
pursuant to Section 5.05.

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

         MORTGAGE: The mortgage, deed of trust or other instrument creating a
first or second lien on or first or second 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 Custodian to be added to the Mortgage File pursuant to this Agreement and
the Custodial Agreement.

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

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement,
dated as of June 30, 2004, among the Seller, as seller and the Depositor, as
purchaser and Encore Credit Corp., in the form attached hereto as Exhibit L.

         MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.

         MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Seller or 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, the initial Mortgage
Loan Schedule being attached hereto as Exhibit B, setting forth the following
information with respect to each Mortgage Loan:

                  (i) the loan number;

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

                                      -23-
<PAGE>

                  (iii) the Servicing Fee Rate;

                  (iv) the Trustee Fee Rate;

                  (v) the LPMI Fee, if applicable;

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

                  (vii) the maturity date;

                  (viii) the original principal balance;

                  (ix) the Cut-off Date Principal Balance;

                  (x) the original term;

                  (xi) the remaining term;

                  (xii) the property type;

                  (xiii) the MIN with respect to each MOM Loan;

                  (xiv) with respect to each Adjustable Rate Mortgage Loan, the
         Minimum Mortgage Rate;

                  (xv) with respect to each Adjustable Rate Mortgage Loan, the
         Maximum Mortgage Rate;

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

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

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

                  (xix) the Loan Group; and

                  (xx) a code indicating whether such Mortgage Loan is a first
         lien Mortgage Loan or a second lien Mortgage Loan.

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

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

                                      -24-
<PAGE>

         MORTGAGE RATE: With respect to each fixed rate Mortgage Loan, the rate
set forth in the related Mortgage Note. With respect to each Adjustable Rate
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 (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, to equal the sum, rounded to the next
highest or nearest 0.125% (as provided in the Mortgage Note), of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.

         MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan.

         MORTGAGOR: The obligors on a Mortgage Note.

         NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the sum of (i) the Servicing Fee
Rate, (ii) the Trustee Fee Rate and (iii) the rate at which the LPMI Fee is
calculated, if any.

         NET RATE CAP: With respect to the Class I-A-1 Certificates and Class
I-A-2 Certificates and any Distribution Date, a rate per annum equal to the
product of (x) the weighted average of the Net Mortgage Rates on the then
outstanding Mortgage Loans in Loan Group I, 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 Accrual Period. For federal income tax purposes, however, such rate
shall be the economic equivalent of the foregoing, expressed as the weighted
average of (adjusted for the actual number of days elapsed in the related
Accrual Period) the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest 1B, weighted on the basis of the Uncertificated Principal Balance of
such REMIC I Regular Interest.

         With respect to the Class II-A Certificates and any Distribution Date,
a rate per annum equal to the product of (x) the weighted average of the Net
Mortgage Rates on the then outstanding Mortgage Loans in Loan Group II, 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 Accrual Period. For federal income
tax purposes, however, such rate shall be the economic equivalent of the
foregoing, expressed as the weighted average of (adjusted for the actual number
of days elapsed in the related Accrual Period) the Uncertificated REMIC I Pass-
Through Rate on REMIC I Regular Interest 2B, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interest.

         With respect to the Class III-A Certificates and any Distribution Date,
a rate per annum equal to the product of (x) the weighted average of the Net
Mortgage Rates on the then outstanding

                                      -25-
<PAGE>

Mortgage Loans in Loan Group III, 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
Accrual Period. For federal income tax purposes, however, such rate shall be the
economic equivalent of the foregoing, expressed as the weighted average of
(adjusted for the actual number of days elapsed in the related Accrual Period)
the Uncertificated REMIC I Pass- Through Rate on REMIC I Regular Interest 3B,
weighted on the basis of the Uncertificated Principal Balance of such REMIC I
Regular Interest.

         With respect to the Class M Certificates and any Distribution Date, a
rate per annum equal to the product of (x) the weighted average of the weighted
average of the Net Mortgage Rates on the then outstanding Mortgage Loans in each
Loan Group, weighted in proportion to the results of subtracting from the
aggregate Stated Principal Balance of each such Loan Group as of the first day
of the calendar month preceding the month in which the Distribution Date, the
Current Principal Amount of the related Class or Classes of Senior Certificates
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 Accrual Period. For federal
income tax purposes, however, such rate shall be the economic equivalent of the
foregoing, expressed as the weighted average of (adjusted for the actual number
of days elapsed in the related Accrual Period) the Uncertificated REMIC I
Pass-Through Rates on (a) REMIC I Regular Interest 1A, subject to a cap and a
floor equal to the weighted average of the Uncertificated REMIC I Pass-Through
Rate on REMIC I Regular Interest 1B, (b) REMIC I Regular Interest 2A, subject to
a cap and a floor equal to the weighted average of the Uncertificated REMIC I
Pass-Through Rate on REMIC I Regular Interest 2B, and (c) REMIC I Regular
Interest 3A, subject to a cap and a floor equal to the weighted average of the
Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest 3B,
weighted on the basis of the Uncertificated Balance of each such REMIC I Regular
Interest.

         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 pursuant to this Agreement, that, in
the good faith judgment of the Master Servicer, will not or, in the case of a
proposed advance, would not, be ultimately recoverable by it from the related
Mortgagor, related Liquidation Proceeds, Insurance Proceeds or otherwise.

         OFFERED CERTIFICATES: The Class I-A-1, Class I-A-2, Class II-A, Class
III-A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6
Certificates and the Privately Offered Certificates.

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

                                      -26-
<PAGE>

case may be, and delivered to the Depositor, the Seller and/or the Trustee, as
the case may be, as required by this Agreement.

         ONE-MONTH LIBOR: With respect to any Accrual Period, 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 for the first Accrual Period shall equal 1.33% 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. The establishment of One-Month LIBOR
on each Interest Determination Date by the Trustee and the Trustee's calculation
of the rate of interest applicable to the Offered Certificates for the related
Accrual Period shall, in the absence of manifest error, be final and binding.

         ONE-MONTH LIBOR PASS-THROUGH RATE: With respect to the Class I-A-1
Certificates and, for purposes of the definition of "Marker Rate" and "Maximum
Uncertificated Accrued Interest Deferral Amount", REMIC I Regular Interest
I-A-1, a per annum rate equal to One-Month LIBOR plus the related Certificate
Margin.

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

         With respect to the Class II-A Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest II-A, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.

         With respect to the Class III-A Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest III-A, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-1, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-2, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-3, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.

                                      -27-
<PAGE>

         With respect to the Class M-4 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-4, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-5, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-6, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-7, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.

         OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Seller, the Depositor or the Master Servicer, reasonably acceptable to
each addressee of such opinion; provided that with respect to Section 2.05,
7.05, 7.07 or 11.01, or the interpretation or application of the REMIC
Provisions, such counsel must (i) in fact be independent of the Seller,
Depositor and the Master Servicer, (ii) not have any direct financial interest
in the Seller, the Depositor or the Master Servicer or in any affiliate of
either, and (iii) not be connected with the Seller, 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 created
hereunder as a result of the purchase of all of the Mortgage Loans and any REO
Property pursuant to the last sentence of Section 10.01 hereof.

         OPTIONAL TERMINATION DATE: The Distribution Date on which the Stated
Principal Balance of all of the Mortgage Loans is equal to or less than 10% of
the Stated Principal Balance of all of the Mortgage Loans as of the Cut-off
Date.

         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 or the sales price of such property or, in the case of a
refinancing, on an appraisal.

         OTS: The Office of Thrift Supervision.

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

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

                                      -28-
<PAGE>

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

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

         OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date,
the excess, if any, of the aggregate Stated Principal Balances of the Mortgage
Loans as of the last day of the related Due Period (including any reduction due
to Realized Losses) over the Certificate Principal Balances of the Certificates
on such Distribution Date (after taking into account the payment of principal
other than any Extra Principal Distribution Amount on such Certificates).

         OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization Amount for
such Distribution Date (assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on such Distribution Date) over (ii) the
Overcollateralization Target Amount for such Distribution Date (with the amount
pursuant to clause (y) deemed to be $0 if the Overcollateralization Amount is
less than or equal to the Overcollateralization Target Amount on that
Distribution Date).

         OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any Distribution
Date, (a) prior to the Stepdown Date, 2.70% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, (b) on or after the
Stepdown Date and if a Trigger Event is not in effect, the greater of (i) 5.40%
of the then current aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period and (ii) $5,272,631 or (c) on or after
the Stepdown Date and if a Trigger Event is in effect, the Overcollateralization
Target Amount for the immediately preceding 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 Offered 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 Rate Cap for such Distribution Date. The Pass-Through Rates for the
Class I-A-1, Class I-A-2, Class II-A, Class III-A, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates for the initial
Distribution Date occurring in July 2004 will be 1.520%, 1.830%, 1.585%, 1.605%,
1.900%, 2.580%, 2.880%, 3.280%, 3.480%, 5.080% and 5.330%, respectively.

         With respect to the Class CE Interest 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 (a) through (m)
below, and the denominator of which is the aggregate Uncertificated Principal
Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I
Regular Interest I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest
III-A,

                                      -29-
<PAGE>

REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC
I Regular Interest M-6, REMIC I Regular Interest M-7 and REMIC I Regular
Interest ZZ. For purposes of calculating the Pass-Through Rate for the Class CE
Interest, the numerator is equal to the sum of the following components:

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

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

         (c)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest I-A-2 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest I-A-2;

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

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

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

         (g)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-2 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-2;

         (h)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-3 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-3;

         (i)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-4 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-4;

         (j)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-5 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-5;

                                      -30-
<PAGE>

         (k)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-6 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-6;

         (l)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-7 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-7; and

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

         With respect to the Class CE Certificates, 100% of the amounts
distributable to the Class CE Interest.

         With respect to the Class P Certificates, 0.00% per annum.

         PERCENTAGE INTEREST: With respect to any Certificate of a specified
Class, the Percentage Interest set forth on the face thereof or the percentage
obtained by dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of the such Class.

         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
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:  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 will not result in the downgrading or withdrawal of the
         ratings then assigned to the Certificates by each Rating Agency, as
         evidenced in writing;

                  (iii) [Reserved];

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

                                      -31-
<PAGE>

                  (v) certificates of deposit, demand or time deposits, or
         bankers' acceptances issued by any depository institution or trust
         company incorporated under the laws of the United States or of any
         state thereof and subject to supervision and examination by federal
         and/or state banking authorities (including the Trustee in its
         commercial banking capacity), provided that the commercial paper and/or
         long term unsecured debt obligations of such depository institution or
         trust company are then rated one of the two highest long-term and the
         highest short-term ratings of each such Rating Agency for such
         securities, or such lower ratings as will not result in the downgrading
         or withdrawal of the rating then assigned to the Certificates by any
         Rating Agency, as evidenced in writing;

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

                  (vii) 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;

                  (viii) 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 short term ratings of each Rating Agency (except if the
         Rating Agency is Moody's, such rating shall be the highest commercial
         paper rating of Moody's for any such securities), or such lower rating
         as will not result in the downgrading or withdrawal of the rating then
         assigned to the Certificates by any Rating Agency, as evidenced by a
         signed writing delivered by each Rating Agency;

                  (ix) interests in any money market fund (including any such
         fund managed or advised by the Trustee or any affiliate thereof) 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 short term rating by each Rating Agency or such lower rating
         as will not result in the downgrading or withdrawal of the ratings then
         assigned to the Certificates by each Rating Agency, as evidenced in
         writing;

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

                  (xi) such other investments having a specified stated maturity
         and bearing interest or sold at a discount acceptable to each Rating
         Agency and as will not result in the

                                      -32-
<PAGE>

         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 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 the Master Servicer, to the effect that such investment will not
adversely affect the status of any such REMIC as a REMIC under the Code or
result in imposition of a tax on any such REMIC. Permitted Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.

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

                                      -33-
<PAGE>

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

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

         PREPAYMENT CHARGE: 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 INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 3.18 or
10.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan immediately prior to such prepayment (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 less the sum of (a)
the Trustee Fee, (b) the Servicing Fee and (c) the LPMI Fee, if any.

         PREPAYMENT PERIOD: As to any Distribution Date, the period commencing
on the 16th day of the month prior to the month in which the related
Distribution Date occurs and ending on the 15th day of the month in which such
Distribution Date occurs.

         PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related security instrument, if any or any
replacement policy therefor through the related Accrual Period for such Class
relating to a Distribution Date.

         PRINCIPAL DISTRIBUTION AMOUNT: With respect to each Distribution Date,
an amount equal to (x) the Principal Funds for such Distribution Date plus (y)
any Extra Principal Distribution Amount for such Distribution Date, less (z) any
Overcollateralization Release Amount.

         PRINCIPAL FUNDS: With respect to each Loan Group and any Distribution
Date, (i) the sum, without duplication, of (a) all scheduled principal collected
during the related Due Period, (b) all Advances relating to principal made on or
before the Distribution Account Deposit Date, (c) Principal Prepayments
exclusive of prepayment charges or penalties collected during the related
Prepayment Period, (d) the Stated Principal Balance of each Mortgage Loan in the
related Loan Group that was repurchased by the Seller pursuant to Sections 2.02
and 2.03, by EMC pursuant to Section 3.18 and by Encore pursuant to Section 8 of
the Mortgage Loan Purchase Agreement, (e) the aggregate of all Substitution
Adjustment Amounts for the related Determination Date in connection with the
substitution of Mortgage Loans pursuant to Section 2.03(c), (f) all Liquidation

                                      -34-
<PAGE>

Proceeds and Subsequent Recoveries collected during the related Prepayment
Period (to the extent such Liquidation Proceeds and Subsequent Recoveries relate
to principal), in each case to the extent remitted by the Master Servicer to the
Distribution Account pursuant to this Agreement and (g) amounts in respect of
principal paid by EMC pursuant to Section 10.01, minus (ii) all amounts required
to be reimbursed pursuant to Sections 4.02 and 4.05 or as otherwise set forth in
this Agreement.

         PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 3.18 and 10.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Master Servicer, as appropriate, in
accordance with the terms of the related Mortgage Note.

         PRINCIPAL REMITTANCE AMOUNT: With respect to each Distribution Date,
the sum of the amounts listed in clauses (a) through (f) of the definition of
Principal Funds.

         PRIVATE CERTIFICATEs: Each of the Class M-7, Class P, Class CE and
Residual Certificates.

         PRIVATELY OFFERED CERTIFICATES: The Class M-7 Certificates, offered
pursuant to the Private Placement Memorandum, dated June 30, 2004.

         PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated June 25, 2004
relating to the public offering of the Class I-A-1, Class I-A-2, Class II-A,
Class III-A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6
Certificates.

         PROTECTED ACCOUNT: The account established and maintained by the Master
Servicer with respect to the Mortgage Loans and REO Property in accordance with
Section 4.01 hereof.

         PUD: A Planned Unit Development.

         PURCHASE PRICE: With respect to any Mortgage Loan (x) required to be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof or (y) that
EMC has a right to purchase pursuant to Section 3.18 hereof, an amount equal to
the sum of (i) 100% of the outstanding principal balance of the Mortgage Loan as
of the date of such purchase plus (ii) accrued interest thereon at the
applicable Mortgage Rate through the first day of the month in which the
Purchase Price is to be distributed to Certificateholders, reduced by any
portion of the Servicing Fee, Servicing Advances and Advances payable to the
purchaser of the Mortgage Loan plus (iii) any costs and damages (if any)
incurred by the Trust in connection with any violation of such Mortgage Loan of
any predatory lending laws.

         QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.

         RATING AGENCY: Each of Moody's and S&P. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization,

                                      -35-
<PAGE>

or other comparable Person, designated by the Depositor, notice of which
designation shall be given to the Trustee. References herein to a given rating
category of a Rating Agency shall mean such rating category without giving
effect to any modifiers.

         REALIZED LOSS: With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the 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, minus (v) 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 Master Servicer pursuant to this Agreement. In
addition, to the extent the Master Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of the Realized Loss with respect to
that Mortgage Loan will be reduced to the extent such recoveries are applied to
reduce the Certificate Principal Balance of any Class of Certificates on any
Distribution Date.

         With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
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 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, minus (iv)
the aggregate of all unreimbursed Advances and Servicing Advances.

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

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

         RECORD DATE: With respect to any Distribution Date and the Offered
Certificates, so long as the Offered Certificates are Book-Entry Certificates,
the Business Day preceding such Distribution

                                      -36-
<PAGE>

Date, and otherwise, the close of business on the last Business Day of the month
preceding the month in which such Distribution Date occurs. With respect to the
Class M-7, Class CE, Class P and Residual Certificates and (a) the first
Distribution Date, the Closing Date and (b) with respect to any other
Distribution Date, the close of business on the last Business Day of the month
preceding the month in which such Distribution Date occurs.

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

         REFERENCE BANK RATE: With respect to any Accrual Period shall mean the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
0.03125%, of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in an amount approximately equal to the
aggregate Certificate Principal Balance of the Class A Certificates and Class M
Certificates for such Accrual Period, provided that at least two such Reference
Banks provide such rate. If fewer than two offered rates appear, the Reference
Bank Rate will be the arithmetic mean, rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%, of the rates quoted by one or more major
banks in New York City, selected by the Trustee, as of 11:00 a.m., New York City
time, on such date for loans in United States dollars to leading European banks
for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class A Certificates and Class M
Certificates for such Accrual Period.

         REGULAR CERTIFICATE: Any Certificate other than a Residual Certificate.

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

         RELIEF ACT: The Servicemembers Civil Relief Act, as amended, or similar
state law.

         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.

         REMAINING EXCESS SPREAD: With respect to any Distribution Date, the
Excess Spread less any Extra Principal Distribution Amount, in each case for
such Distribution Date.

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

         REMIC I: The segregated pool of assets described in Section 5.06(a).

                                      -37-
<PAGE>

         REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount (subject to adjustment based on the actual number
of days elapsed in the respective Accrual Period) equal to (a) the product of
(i) 50% of the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties then outstanding and (ii) the Uncertificated REMIC I Pass-Through
Rate for REMIC I Regular Interest AA minus the Marker Rate, divided by (b) 12.

         REMIC I MARKER ALLOCATION PERCENTAGE: 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I Regular Interest
I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest III-A, REMIC I
Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest
M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular
Interest M-6, REMIC I Regular Interest M-7 and REMIC I Regular Interest ZZ.

         REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests (other than REMIC I Regular Interest P) minus (ii)
the aggregate of the Uncertificated Principal Balances of REMIC I Regular
Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest II-A,
REMIC I Regular Interest III-A, REMIC I Regular Interest M-1, REMIC I Regular
Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4, REMIC
I Regular Interest M-5, REMIC I Regular Interest M-6 and REMIC I Regular
Interest M-7, in each case as of such date of determination.

         REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC I Regular Interest
I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest II-A, REMIC I
Regular Interest III-A, REMIC I Regular Interest M-1, REMIC I Regular Interest
M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular
Interest M-5, REMIC I Regular Interest M-6 and REMIC I Regular Interest M-7, and
the denominator of which is the aggregate of the Uncertificated Principal
Balances of REMIC I Regular Interest I-A-1, REMIC I Regular Interest I-A-2,
REMIC I Regular Interest II-A, REMIC I Regular Interest III-A, REMIC I Regular
Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest M-3, REMIC
I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest
M-6, REMIC I Regular Interest M-7 and REMIC I Regular Interest ZZ.

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

         REMIC I  REGULAR  INTEREST  AA:  One of the  separate  non-certificated
beneficial  ownership  interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC

                                      -38-
<PAGE>

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

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

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

         REMIC I REGULAR INTEREST II-A: 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 II-A shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST III-A: 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 III-A shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

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

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

                                      -39-
<PAGE>

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

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

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

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

         REMIC I REGULAR INTEREST M-7: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-7 shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

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

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

                                      -40-
<PAGE>

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

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

         REMIC I REGULAR INTEREST 1A: 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 1A shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST 1B: 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 1B shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST 2A: 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 2A shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST 2B: 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 2B shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

REMIC I REGULAR INTEREST 3A: 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 3A shall accrue interest at the
related Uncertificated REMIC I Pass-Through Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Principal Balance as set forth in the Preliminary Statement hereto.

                                      -41-
<PAGE>

         REMIC I REGULAR INTEREST 3B: 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 3B shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest 1A, REMIC I Regular Interest 1B, REMIC I Regular Interest 2A,
REMIC I Regular Interest 2B, REMIC I Regular Interest 3A, REMIC I Regular
Interest 3B and REMIC I Regular Interest XX.

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

         REMIC  I   REQUIRED   OVERCOLLATERALIZATION   AMOUNT:   0.50%   of  the
Overcollateralization Target Amount.

         REMIC II:  The segregated pool of assets described in Section 5.06(a).

         REMIC II CERTIFICATE:  Any Regular Certificate (other than the Class CE
Certificate and Class P Certificate) or Class R-2 Certificate.

         REMIC II CERTIFICATEHOLDER: The Holder of any REMIC II Certificate.

         REMIC II REGULAR INTEREST: Any Class A Certificate, Class M
Certificate, Class CE Interest or Class P Interest.

         REMIC III: The segregated pool of assets consisting of the Class CE
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Class CE Certificates and the Class RX Certificate (in respect of the Class R-3
Interest), with respect to which a separate REMIC election is to be made.

         REMIC III CERTIFICATE: Any Class CE Certificate or Class RX Certificate
(in respect of the Class R-3 Interest).

         REMIC IV: The segregated pool of assets consisting of the Class P
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Class P Certificates and the Class RX Certificate (in respect of the Class R-4
Interest), with respect to which a separate REMIC election is to be made.

         REMIC IV CERTIFICATE: Any Class P Certificate or Class RX Certificate
(in respect of the Class R-4 Interest).

                                      -42-
<PAGE>

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

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

         REMITTANCE DATE: Shall mean the Business Day immediately  preceding the
Distribution Account Deposit Date.

         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 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 or Mortgage Loans in the
aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a Request for Release, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) if the Replacement Mortgage Loan is a Fixed Rate Mortgage Loan, have a
fixed Mortgage Rate not less than or more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or higher credit
quality characteristics than that of the Deleted Mortgage Loan; (iv) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (v) have a
remaining term to maturity no greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (vi) not permit conversion of the
Mortgage Rate from a fixed rate to a variable rate; (vii) have the same lien
priority as the Deleted Mortgage Loan; (viii) constitute the same occupancy type
as the Deleted Mortgage Loan or be owner occupied; (ix) if the Replacement
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, (x) if the
Replacement 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, (xi) if the Replacement Mortgage Loan is an Adjustable Rate Mortgage Loan,
have a Gross Margin equal to or greater than the Gross Margin of the Deleted
Mortgage Loan, (xii) if the Replacement 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, (xiii) comply with each
representation and warranty set forth in Section 7 of the Mortgage Loan Purchase
Agreement and (xiv) the Custodian has delivered a Final Certification noting no
defects or exceptions.

                                      -43-
<PAGE>

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

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

         RESERVE  FUND:  Shall  mean the  separate  trust  account  created  and
maintained by the Trustee pursuant to Section 3.20 hereof.

         RESIDUAL CERTIFICATES: The Class R-1, Class R-2 and Class RX
Certificates (representing ownership of the Class R-3 Interest and Class R-4
Interest) each evidencing the sole class of "residual interests" (within the
meaning of Section 860G(a)(2) of the Code) in the related REMIC.

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

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

         S&P: Standard & Poor's, a division of The McGraw-Hill Companies,  Inc.,
and 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:  EMC  Mortgage  Corporation,  a Delaware  corporation,  and its
successors  and assigns,  in its capacity as seller of the Mortgage Loans to the
Depositor.

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

         SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Master Servicer of its servicing obligations hereunder,
including, but not limited to, the cost of (i) the preservation, restoration and
protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, and including any expenses incurred in
relation to any such proceedings that result from the Mortgage Loan being
registered in the MERS(R) System, (iii) the management and

                                      -44-
<PAGE>

liquidation of any REO Property (including, without limitation, realtor's
commissions) and (iv) compliance with any obligations under Section 3.07 hereof
to cause insurance to be maintained.

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

         SERVICING FEE RATE: 0.500% per annum.

         SERVICING MODIFICATION: With respect to any Mortgage Loan that is in
default or, in the reasonable judgment of the Master Servicer, as to which
default is reasonably foreseeable, any modification which is effected by the
Master Servicer in accordance with the terms of this Agreement which results in
any change in the outstanding Stated Principal Balance, any change in the
Mortgage Rate or any extension of the term of such Mortgage Loan.

         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.

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

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

         STEPDOWN DATE: The later to occur of (a) the Distribution Date in July
2007 and (b) the first Distribution Date on which the Current Specified
Enhancement Percentage is greater than or equal to 39.40%.

         SUBORDINATED   CERTIFICATES:   The  Class  M,  Class  CE  and  Residual
Certificates.

         SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts received by
the Master Servicer (net of any related expenses permitted to be reimbursed
pursuant to Section 4.02) or surplus amounts held by the Master Servicer to
cover estimated expenses (including, but not limited to,

                                      -45-
<PAGE>

recoveries in respect of the representations and warranties made by the Seller
pursuant to the Mortgage Loan Purchase Agreement) specifically related to a
Mortgage Loan that was the subject of a liquidation or final disposition of any
REO Property prior to the related Prepayment Period that resulted in a Realized
Loss.

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

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

         SUCCESSOR MASTER  SERVICER:  The meaning ascribed to such term pursuant
to Section 8.01.

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

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

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

         TRIGGER EVENT: With respect to any Distribution Date after the Stepdown
Date, a Trigger Event exists if (i) a Delinquency Event shall have occurred and
be continuing or (ii) the aggregate amount of Realized Losses on the Mortgage
Loans since the Cut-off Date as a percentage of the initial aggregate Stated
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
         -----------------                                    ----------
         July 2007 to June 2008                                  3.25%
         July 2008 to June 2009                                  5.00%
         July 2009 to June 2010                                  6.50%
         July 2010 and thereafter                                7.25%

         TRUST FUND: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest accruing and principal due with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Distribution Account, the Class
P Certificate Account, the Reserve Fund and the Protected Account and all
amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Required Insurance Policies with respect to the Mortgage Loans;
(v) the rights under the Yield Maintenance Agreements; (vi) the rights under the
Mortgage Loan Purchase Agreement; and (vii) all proceeds of the foregoing,
including proceeds of conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property.

                                      -46-
<PAGE>

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

         TRUSTEE FEE: As to each Mortgage Loan and any Distribution Date, a fee
per annum equal to 0.0017% multiplied by the Stated Principal Balance of such
Mortgage Loan as of the last day of the related Due Period.

         UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC I Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the Uncertificated REMIC I Pass- Through Rate on the Uncertificated Principal
Balance of such REMIC I Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls (allocated to such REMIC I Regular Interests as set forth in
Section 5.06).

         UNCERTIFICATED NOTIONAL BALANCE: With respect to the Class CE Interest
and any Distribution Date, the Uncertificated Principal Balance of the REMIC I
Regular Interests (other than REMIC I Regular Interest P) for such Distribution
Date.

UNCERTIFICATED PRINCIPAL BALANCE: The amount of the REMIC I Regular Interests
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Principal Balance of each REMIC I Regular Interest shall equal
the amount set forth in the Preliminary Statement hereto as its initial
uncertificated principal balance. On each Distribution Date, the Uncertificated
Principal Balance of 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 5.06 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 5.04A and the Uncertificated Principal Balance of
REMIC I Regular Interest ZZ shall be increased by interest deferrals as provided
in Section 5.06(b)(1)(i). The Uncertificated Principal Balance of each REMIC I
Regular Interest shall never be less than zero. With respect to the Class CE
Interest as of any date of determination, an amount equal to the excess, if any,
of (A) the then aggregate Uncertificated Principal Balances of the REMIC I
Regular Interests over (B) the then aggregate Certificate Principal Balances of
the Class A Certificates, the Class M Certificates and the Class P Interest then
outstanding.

         UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC I
Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I Regular Interest
I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest III-A, REMIC I
Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest
M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular
Interest M-6, REMIC I Regular Interest M-7, REMIC I Regular Interest ZZ, REMIC I
Regular Interest 1A, REMIC I Regular Interest 2A, REMIC I Regular Interest 3A
and REMIC I Regular Interest XX, the weighted average of the Net Mortgage Rates
of the Mortgage Loans. With respect to REMIC I Regular Interest 1B, the weighted
average of the Net Mortgage Rates of the Mortgage Loans in Loan Group I. With
respect to REMIC I Regular Interest 2B, the weighted average of the Net Mortgage
Rates of the Mortgage Loans in Loan Group II. With respect

                                      -47-
<PAGE>

to REMIC I Regular Interest 3B, the weighted average of the Net Mortgage Rates
of the Mortgage Loans in Loan Group III. With respect to REMIC I Regular
Interest P, 0.00%.

         UNDERWRITING AGREEMENT: The Underwriting Agreement, dated as of April
28, 2004, between the Depositor and Bear, Stearns & Co. Inc. ("Bear Stearns")
together with the related Terms Agreement, dated as of June 25, 2004 between the
Depositor and Bear Stearns.

         UNPAID REALIZED LOSS AMOUNT: With respect to any Class A Certificates
and as to any Distribution Date, is the excess of Applied Realized Loss Amounts
with respect to such Class over the sum of all distributions in reduction of the
Applied Realized Loss Amounts on all previous Distribution Dates. Any amounts
distributed to the Class A Certificates in respect of any Unpaid Realized Loss
Amount shall not be applied to reduce the Certificate Principal Balance of such
Class.

         VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions
hereunder. Voting Rights shall be allocated (i) 94% to the Offered Certificates,
(ii) 3% to the Class CE Certificates until paid in full, and (iii) 1% to each
Class of Residual Certificates (other than the Class RX Certificates) and Class
P Certificates, with the allocation among the Certificates (other than the Class
CE, Class P and the Residual Certificates) to be in proportion to the
Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes. Voting Rights will be allocated
among the Certificates of each such Class in accordance with their respective
Percentage Interests.

         YIELD MAINTENANCE AGREEMENTS: The three Yield Maintenance Agreements,
each dated June 30, 2004 between the Trust (on behalf of the Class I-A, Class
II-A and Class M Certificateholders) and Bear Stearns Financial Products Inc.

         Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.

         For purposes of calculating the amount of Current Interest for the
Class A Certificates, the Class M Certificates and the Class CE Certificates for
any Distribution Date, the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 5.02) 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 based on, and to the extent of, one month's
interest at the then applicable respective Pass-Through Rate on the Certificate
Notional Amount thereof and, thereafter, among the Offered Certificates, in each
case on a PRO RATA basis based on, and to the extent of, one month's interest at
the then applicable respective Pass-Through Rate on the respective Certificate
Principal Balance of each such Certificate.

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

         (a) The REMIC I Marker Allocation Percentage of the aggregate amount of
any Prepayment Interest Shortfalls (to the extent not covered by payments by the
Master Servicer pursuant to Section 5.02) and the REMIC I Marker Allocation
Percentage of 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-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest

                                      -48-
<PAGE>

II-A, REMIC I Regular Interest III-A, REMIC I Regular Interest M-1, REMIC I
Regular Interest M- 2, REMIC I Regular Interest M-3, REMIC I Regular Interest
M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular
Interest M-7 and REMIC I Regular Interest ZZ PRO RATA based on, and to the
extent of, one month's interest at the then applicable respective Uncertificated
REMIC I Pass-Through Rate on the respective Uncertificated Principal Balance of
each such REMIC I Regular Interest;

         (b) The REMIC I Sub WAC Allocation Percentage of the aggregate amount
of any Prepayment Interest Shortfalls (to the extent not covered by payments by
the Master Servicer pursuant to Section 5.02) and the REMIC I Sub WAC Allocation
Percentage of any Relief Act Interest Shortfalls incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated to Uncertificated
Accrued Interest payable to REMIC I Regular Interest 1A, REMIC I Regular
Interest 1B, REMIC I Regular Interest 2A, REMIC I Regular Interest 2B, REMIC I
Regular Interest 3A, REMIC I Regular Interest 3B and REMIC I Regular Interest
XX, pro rata based on, and to the extent of, one month's interest at the then
applicable respective Uncertificated REMIC I Pass- Through Rate on the
respective Uncertificated Principal Balance of each such REMIC I Regular
Interest; and

         (c) The aggregate amount of any Prepayment Interest Shortfalls (to the
extent not covered by payments by the Master Servicer pursuant to Section 5.02)
and any Relief Act Interest Shortfalls allocated to the Class CE Certificates
shall be deemed allocated to the Class CE Interest.

                                      -49-
<PAGE>

                                   ARTICLE II

                            CONVEYANCE OF TRUST FUND
                         REPRESENTATIONS AND WARRANTIES

         Section 2.01 CONVEYANCE OF TRUST FUND.

         Pursuant to the Mortgage Loan Purchase Agreement, the Seller sold,
transferred, assigned, set over and otherwise conveyed to the Depositor, without
recourse, all the right, title and interest of the Seller in and to the assets
in the Trust Fund.

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

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

         In connection with such sale, the Depositor has delivered to, and
deposited with, the Trustee or the Custodian, as its agent, the following
documents or instruments with respect to each Mortgage Loan so assigned: (i) the
original Mortgage Note, including any riders thereto, endorsed without recourse
to the order of "LaSalle Bank National Association, as Trustee for
certificateholders of Bear Stearns Asset Backed Securities I LLC Asset Backed
Certificates, Series 2004-HE5," and showing an unbroken chain of endorsements
from the original payee thereof to the Person endorsing it to the Trustee, (ii)
the original Mortgage and, if the related Mortgage Loan is a MOM Loan, noting
the presence of the MIN and language indicating that such Mortgage Loan is a MOM
Loan, which shall have been recorded (or if the original is not available, a
copy), with evidence of such recording indicated thereon (or if clause (x) in
the proviso below applies, shall be in recordable form), (iii) unless the
Mortgage Loan is a MOM Loan, the assignment (either an original or a copy, which
may be in the form of a blanket assignment if permitted in the jurisdiction in
which the Mortgaged Property is located) to the Trustee of the Mortgage with
respect to each Mortgage Loan in the name of "LaSalle Bank National Association,
as Trustee for certificateholders of Bear Stearns Asset Backed Securities I LLC
Asset Backed Certificates, Series 2004-HE5," which shall have been recorded (or
if clause (x) in the proviso below applies, shall be in recordable form) (iv) an
original or a copy of all intervening assignments of the Mortgage, if any, with
evidence of recording thereon, (v) the original policy of title insurance or
mortgagee's certificate of title insurance or commitment or binder for title
insurance, if available, or a copy thereof, or, in the event that such original
title insurance policy is unavailable, a photocopy thereof, or in lieu thereof,
a current lien search on the related Mortgaged Property and (vi) originals or
copies of all available assumption, modification or substitution agreements, if
any; provided, however, that in lieu of the foregoing, the Seller may deliver
the following documents, under the circumstances set forth below: (x) if any
Mortgage, assignment thereof to the Trustee or intervening assignments thereof
have been delivered or are being delivered to recording offices for recording
and have not been returned in time to permit their delivery as specified above,
the Depositor may deliver a true copy thereof with a certification by the

                                      -50-
<PAGE>

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

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

         Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.

         (a) Based on the Initial Certification received by it from the
Custodian, the Trustee acknowledges receipt of, subject to the further review
and exceptions reported by the Custodian pursuant to the procedures described
below, the documents (or certified copies thereof) delivered to the Trustee or
the Custodian on its behalf pursuant to Section 2.01 and declares that it holds
and

                                      -51-
<PAGE>

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

         (b) No later than 180 days after the Closing Date, the Trustee or the
Custodian on its behalf will review, for the benefit of the Certificateholders,
the Mortgage Files and will execute and deliver or cause to be executed and
delivered to the Seller, the Master Servicer and, if reviewed by the Custodian,
the Trustee, a Final Certification substantially in the form of Exhibit Three to
the Custodial Agreement. In conducting such review, the Trustee or the Custodian
on its behalf will ascertain whether each document required to be recorded has
been returned from the recording office with evidence of recording thereon and
the Trustee or the Custodian on its behalf has received either an original or a
copy thereof, as required in Section 2.01 (provided, however, that with respect
to

                                      -52-
<PAGE>

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

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

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

                                      -53-
<PAGE>

         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
and the Trustee as follows, as of the Closing Date:

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

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

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

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

                                      -54-
<PAGE>

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

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

                  (vii) The Master Servicer will transmit full-file credit
         reporting data for each Group II Loan pursuant to the Fannie Mae
         Selling Guide and that for each Mortgage Loan, the Master Servicer
         agrees it shall report one of the following statuses each month as
         follows: new origination, current, delinquent (30-, 60-, 90-days,
         etc.), foreclosed, or charged-off.

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

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

                  (ii) The Seller has the full corporate power and authority to
         sell each Mortgage Loan, and to execute, deliver and perform, and to
         enter into and consummate the transactions contemplated by this
         Agreement and has duly authorized by all necessary corporate action on
         the part of the Seller the execution, delivery and performance of this
         Agreement; and this Agreement, assuming the due authorization,
         execution and delivery hereof by the other parties hereto or thereto,
         as applicable, 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 the Mortgage
         Loan Purchase 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

                                      -55-
<PAGE>

         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)
         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 Seller is a party or by which it may be bound,
         or (C) constitute a 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 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) With respect to each Mortgage Loan as of the Closing
         Date (or such other date as may be specified in Section 7 of the
         Mortgage Loan Purchase Agreement), the Seller hereby remakes and
         restates each of the representations and warranties set forth in
         Section 7 of the Mortgage Loan Purchase Agreement to the Depositor and
         the Trustee to the same extent as if fully set forth herein.

         (c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in the Mortgage Loan Purchase Agreement
with respect to the Mortgage Loans that materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, the party discovering
such breach shall give prompt written notice thereof to the other parties. Any
breach of a representation or warranty contained in clauses (gg) through (ll) of
Section 7 of the Mortgage Loan Purchase Agreement in respect of a Group II Loan,
shall be deemed to materially adversely affect the interests of the
Certificateholders. The Seller hereby covenants with respect to the
representations and warranties set forth in Section 7 of the Mortgage Loan
Purchase Agreement, that within 90 days of the discovery of a breach of any
representation or warranty set forth therein that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, it shall
cure such breach in all material respects and, if such breach is not so cured,
(i) 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

                                      -56-
<PAGE>

Loan, in the manner and subject to the conditions set forth in this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at
the Purchase Price in the manner set forth below; provided that any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of an Opinion of Counsel if
required by Section 2.05 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. The Trustee shall give prompt written notice to the parties
hereto of the Seller's failure to cure such breach as set forth in the preceding
sentence. The Seller 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, the Seller shall, unless it
cures such breach in a timely fashion pursuant to this Section 2.03, promptly
notify the Master Servicer whether it intends either to repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties with respect to the Mortgage Loans that are made
to the best of the Seller's knowledge, if it is discovered by any of the
Depositor, the Master Servicer, the Seller, the Trustee or the Custodian that
the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan, notwithstanding the Seller's lack of knowledge with respect to the
substance of such representation or warranty, the Seller shall nevertheless be
required to cure, substitute for or repurchase the affected Mortgage Loan in
accordance with the foregoing.

         With respect to any Replacement Mortgage Loan or Loans, the Seller
shall deliver to the Trustee or the Custodian on its behalf for the benefit of
the Certificateholders such documents and agreements as are required by Section
2.01. No substitution will be made in any calendar month after the Determination
Date for such month. Scheduled Payments due with respect to Replacement Mortgage
Loans in the Due Period related to the Distribution Date on which such proceeds
are to be distributed shall not be part of the Trust Fund and will be retained
by the Seller. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The 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 and the
Custodian . Upon such substitution, the Replacement Mortgage Loan or Loans shall
be subject to the terms of this Agreement in all respects, and the Seller shall
be deemed to have made with respect to such Replacement Mortgage Loan or Loans,
as of the date of substitution, the representations and warranties set forth in
Section 7 of the Mortgage Loan Purchase Agreement with respect to such Mortgage
Loan. Upon any such substitution and the deposit into the Protected Account of
the amount required to be deposited therein in connection with such substitution
as described in the following paragraph and receipt by the Trustee of a Request
for Release for such Mortgage Loan, the Trustee or the Custodian shall release
to the Seller the Mortgage File relating to such Deleted Mortgage Loan and held
for the benefit of the Certificateholders and the Trustee shall execute and
deliver at the Seller's direction such instruments of transfer or assignment as
have been prepared by the Seller, in each case without recourse, representation
or warranty 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.

                                      -57-
<PAGE>

         For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer will determine
the amount (if any) by which the aggregate principal balance of all the
Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of such Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies, described in the
preceding sentence for any Distribution Date (such amount, the "Substitution
Adjustment Amount") shall be deposited into the Protected Account, by the Seller
delivering such Replacement Mortgage Loan on 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 the Seller shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited into the Protected Account, on
the Determination Date for the Distribution Date in the month following the
month during which the Seller became obligated to repurchase or replace such
Mortgage Loan and upon such deposit of the Purchase Price, the delivery of an
Opinion of Counsel if required by Section 2.05 and the receipt of a Request for
Release, the Trustee or the Custodian shall release the related Mortgage File
held for the benefit of the Certificateholders to the Seller, and the Trustee
shall execute and deliver at such Person's direction the related instruments of
transfer or assignment prepared by the Seller, in each case without recourse, as
shall be necessary to transfer title from the Trustee for the benefit of the
Certificateholders and transfer the Trustee's interest to the Seller to any
Mortgage Loan purchased pursuant to this Section 2.03. It is understood and
agreed that the obligation under this Agreement of the Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedies against the Seller respecting such
breach available to the Certificateholders, the Depositor or the Trustee.

         In addition, upon the discovery by any of the parties hereto of a
breach of a representation of warranty set forth in Section 8 of the Mortgage
Loan Purchase Agreement with respect to any Group II Loan, that materially and
adversely affects the interests of the Certificateholders' in such Group II
Loan, the party discovering such breach shall give prompt written notice thereof
to the other parties hereto and Encore, and the Trustee upon the receipt of such
notice shall enforce Encore's obligation to cure, substitute for, or repurchase
such Group II Loan in accordance with Section 8 of the Mortgage Loan Purchase
Agreement.

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

         Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

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

                  (i) The Depositor is duly organized and is validly existing as
         a limited liability company in good standing under the laws of the
         State of Delaware and has full power and

                                      -58-
<PAGE>

         authority necessary to own or hold its properties and to conduct its
         business as now conducted by it and to enter into and perform its
         obligations under this Agreement.

                  (ii) The Depositor has the full 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 certificate of formation or limited liability company agreement of
         the Depositor 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 Depositor is a party or
         by which it may be bound or (C) constitute a 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 or 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 thereby, or if any such consent, approval,
         authorization or order is required, the Depositor has obtained the
         same.

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

                                      -59-
<PAGE>

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

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

         (a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Seller delivers to the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of REMIC I, REMIC II, REMIC III or REMIC IV or contributions after the Closing
Date, as defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or
(ii) cause either REMIC I, REMIC II, REMIC III or REMIC IV 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 or 2.03) upon the earlier of (a) the occurrence of a default
or imminent default with respect to such Mortgage Loan and (b) receipt by the
Trustee of an Opinion of Counsel addressed to the Trustee 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 or the Master Servicer
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of section 860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in any event within 5 Business Days of discovery) give written
notice thereof to the other parties and the Trustee. In connection therewith,
the Trustee shall require the Seller, at the Seller's option, to either (i)
substitute, if the conditions in Section 2.03 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 in accordance with Section 2.03. The Trustee shall reconvey to the
Seller the Mortgage Loan to be released pursuant hereto (and the Custodian shall
deliver the related Mortgage File) 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 in accordance with Section 2.03.

         Section 2.06 COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.

         (a) The Trustee acknowledges the sale, transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has
executed, countersigned and delivered, to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement in
accordance with its terms.

                                      -60-
<PAGE>

         (b) The Depositor concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests, and the other assets of REMIC II for the
benefit of the holders of the REMIC II Regular Interests and the Class R-2
Certificates. The Trustee acknowledges receipt of the REMIC I Regular Interests
(which are uncertificated) and the other assets of REMIC II and declares that it
holds and will hold the same in trust for the exclusive use and benefit of the
holders of the REMIC II Regular Interests and the Class R-2 Certificates.

         (c) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class CE Interest for the benefit of the holders of the REMIC III
Certificates. The Trustee acknowledges receipt of the Class CE Interest (which
are uncertificated) and declares that it holds and will hold the same in trust
for the exclusive use and benefit of the holders of the REMIC III Certificates.

         (d) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class P Interest for the benefit of the holders of the REMIC IV
Certificates. The Trustee acknowledges receipt of the Class P Interest (which
are uncertificated) and declares that it holds and will hold the same in trust
for the exclusive use and benefit of the holders of the REMIC IV Certificates.

                                      -61-
<PAGE>

                                   ARTICLE III

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

         Section 3.01 THE MASTER SERVICER TO ACT AS MASTER SERVICER.

         The Master Servicer shall service and administer the Mortgage Loans in
accordance with customary and usual standards of practice of prudent mortgage
loan servicers in the respective states in which the related 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 3.03, to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any related Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance Proceeds and
other Liquidation Proceeds, and (iv) subject to Section 3.09, to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan; 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 or the Trustee under this Agreement.

         Without limiting the generality of the foregoing, the Master Servicer,
in its own name or in the name of the Trust, the Depositor or the Trustee, is
hereby authorized and empowered by the Trust, the Depositor and the Trustee,
when the 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.

         In accordance with the standards of the first paragraph of this Section
3.01, 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 5.03,
and further as provided in Section 5.02. 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.

                                      -62-
<PAGE>

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

         (a) Except as otherwise provided in this Section 3.02, 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
3.02(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the 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 3.02(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Master Servicer shall not be deemed to be in
default under this Section 3.02(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 3.02(a), 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 related 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 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 servicing 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

                                      -63-
<PAGE>

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 3.03 SUBSERVICERS.

         The Master Servicer shall perform all of its servicing responsibilities
hereunder or may cause a subservicer to perform any such servicing
responsibilities on its behalf, but the use by the Master Servicer of a
subservicer shall not release the Master Servicer from any of its obligations
hereunder and the Master Servicer shall remain responsible hereunder for all
acts and omissions of each subservicer as fully as if such acts and omissions
were those of the Master Servicer. The Master Servicer shall pay all fees of
each subservicer from its own funds, and a subservicer's fee shall not exceed
the Servicing Fee payable to the Master Servicer hereunder.

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

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

         Any subservicing agreement and any other transactions or services
relating to the Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and the Master Servicer alone, and the Trustee shall
not have any obligations, duties or liabilities with respect to such subservicer
including any obligation, duty or liability of the Trustee to pay such
subservicer's fees and expenses. Each subservicing agreement shall provide that
such agreement may be assumed or terminated without cause or penalty by the
Trustee or other Successor Master Servicer in the event the Master Servicer is
terminated in accordance with this Agreement. For purposes of remittances to the
Trustee pursuant to this Agreement, the Master Servicer shall be deemed to have
received a payment on a Mortgage Loan when a subservicer has received such
payment.

                                      -64-
<PAGE>

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

         Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee or the Custodian on behalf of 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 or Insurance Proceeds in respect of any such Mortgage Loan. All
Mortgage Files and funds collected or held by, or under the control of, the
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 Protected Account, shall be held by the
Master Servicer for and on behalf of the Trustee and shall be and remain the
sole and exclusive property of the Trustee, subject to the applicable provisions
of this 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
Protected Account or in any Escrow Account, or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, a Mortgage Loan, except, however, that the 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 3.05 MAINTENANCE OF HAZARD INSURANCE.

         The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance on buildings upon, or comprising part of, the Mortgaged
Property against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the related Mortgaged Property is
located with an insurer which is licensed to do business in the state where the
related Mortgaged Property is located. 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 4.01, 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 Protected 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
4.02. 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

                                      -65-
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program, the Master Servicer shall cause flood insurance to be maintained with
respect to such Mortgage Loan. Such flood insurance shall be in an amount equal
to the least of (i) the Stated Principal Balance of the related Mortgage Loan,
(ii) minimum amount required to compensate for damage or loss on a replacement
cost basis or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended.

         In the event that the Master Servicer shall obtain and maintain a
blanket policy insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first sentence of this Section 3.05, it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Master Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property a
policy complying with the first sentence of this Section 3.05, and there shall
have been a loss that would have been covered by such policy, deposit in the
Protected Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Such deposit shall be from the Master
Servicer's own funds without reimbursement therefor. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Master
Servicer agrees to present, on behalf of itself, the Depositor and the Trustee
for the benefit of the Certificateholders, claims under any such blanket policy.

         Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.

         The Master Servicer shall prepare and present on behalf of the Trustee
and the Certificateholders all claims under the Required 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 Required Insurance Policies. Any proceeds disbursed to the Master
Servicer in respect of such Required Insurance Policies shall be promptly
deposited in the Protected Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition precedent to the presentation of claims on the
related Mortgage Loan to the insurer under any applicable Required Insurance
Policy need not be so deposited (or remitted).

         Section 3.07 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

         (a) The Master 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 Master Servicer would have been covered
thereunder. The Master Servicer shall use its best efforts 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.
The Master 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 Mortgage Note and is required to be kept in force hereunder.

         (b) The Master Servicer agrees to present on behalf of the Trustee, 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

                                      -66-
<PAGE>

Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01, any
amounts collected by the Master Servicer under any Primary Mortgage Insurance
Policies shall be deposited in the Protected Account, subject to withdrawal
pursuant to Section 4.02 hereof.

         Section 3.08 FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.

         The Master Servicer shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy, with broad coverage
with responsible companies on all officers, employees or other persons acting in
any capacity with regard to the Mortgage Loans and who handle funds, money,
documents and papers relating to the Mortgage Loans. The fidelity bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Master Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such fidelity bond shall also protect and insure
the Master Servicer against losses in connection with the failure to maintain
any insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan which is not in accordance with Accepted
Servicing Practices. No provision of this Section 3.08 requiring the fidelity
bond and errors and omissions insurance shall diminish or relieve the Master
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by Accepted Servicing Practices. The
Master Servicer shall deliver to the Trustee a certificate from the surety and
the insurer as to the existence of the fidelity bond and errors and omissions
insurance policy and shall obtain a statement from the surety and the insurer
that such fidelity bond or insurance policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Trustee. The
Master Servicer shall notify the Trustee within five business days of receipt of
notice that such fidelity bond or insurance policy will be, or has been,
materially modified or terminated. The Trustee for the benefit of the
Certificateholders must be named as loss payees on the fidelity bond and as
additional insured on the errors and omissions policy.

         Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION
OF EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES; REPURCHASES 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 Insurance Proceeds, Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Protected Account pursuant to
Section 4.02). If the Master Servicer reasonably believes that Liquidation
Proceeds with respect to any such Mortgage Loan would not be increased as a
result of such foreclosure or other action, such

                                      -67-
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Mortgage Loan will be charged-off and will become a Liquidated Loan. The Master
Servicer will give notice of any such charge-off to the Trustee. The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; provided that such costs and expenses shall be Servicing
Advances and that it shall be entitled to reimbursement thereof from the
proceeds of liquidation of the related Mortgaged Property, as contemplated in
Section 4.02. If the 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 hereunder. 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 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 Protected 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
prior to three years after its acquisition by the Trust Fund or, at the expense
of the Trust Fund, 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 unless the Trustee shall have been supplied with an Opinion of Counsel
addressed to the Trustee (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 REMIC I, REMIC II, REMIC III or REMIC IV as
defined in section 860F of the Code or cause either REMIC I, REMIC II, REMIC III
or REMIC IV to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used for the production

                                      -68-
<PAGE>

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 either REMIC I, REMIC II, REMIC III or REMIC IV 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 the
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Protected Account. To the extent
the income received during a Prepayment Period is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan, such excess shall be considered to
be a partial Principal Prepayment for all purposes hereof.

         The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Master Servicer as provided above, shall be deposited in
the Protected Account on the next succeeding Determination Date following
receipt thereof for distribution on the related Distribution Date, except that
any Excess Liquidation 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 4.02 or this Section 3.09; second, to
reimburse the Master Servicer for any unreimbursed Advances, pursuant to Section
4.02 or this Section 3.09; third, to accrued and unpaid interest (to the extent
no Advance has been made for such amount) on the Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the Mortgage Loan.

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

         (c) The Master Servicer has no intent to foreclose on any Mortgage Loan
based on the delinquency characteristics as of the Closing Date; provided, that
the foregoing does not prevent the

                                      -69-
<PAGE>

Master Servicer from initiating foreclosure proceedings on any date hereafter if
the facts and circumstances of such Mortgage Loans including delinquency
characteristics in the Master Servicer's discretion so warrant such action.

         Section 3.10 SERVICING COMPENSATION.

         As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Protected Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund an amount equal to the
Servicing Fee.

         Additional servicing compensation in the form of any Excess Liquidation
Proceeds, assumption fees, late payment charges, all income and gain net of any
losses realized from Permitted Investments with respect to funds in or credited
to the Protected Account shall be retained by the Master Servicer to the extent
not required to be deposited in the Protected Account pursuant to Section 4.02.
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 3.05 and maintenance of
the other forms of insurance coverage required by Section 3.07) and shall not be
entitled to reimbursement therefor except as specifically provided in Section
4.02.

         Section 3.11 REO PROPERTY.

         (a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall sell any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement. Pursuant to its efforts to sell such REO Property, the Master
Servicer shall protect and conserve such REO Property in the manner and to the
extent required herein, in accordance with the REMIC Provisions.

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

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

         Section 3.12 LIQUIDATION REPORTS.

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

                                      -70-
<PAGE>

         Section 3.13 ANNUAL CERTIFICATE AS TO COMPLIANCE.

         (a) The Master Servicer will deliver to the Trustee and the Rating
Agencies not later than March 1, 2005 and not later than March 1 of each year
thereafter, a certificate of a Servicing Officer stating, as to each signatory
thereof, that (i) a review of the activities of the Master Servicer during the
preceding calendar year or portion thereof and of its performance 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 of its obligations under this Agreement in all material respects
throughout such year or portion thereof, 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 except for such defaults as such
officer in its good faith judgment believe to be immaterial.

         (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 3.14 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' SERVICING
REPORT.

         Not later than March 1, 2005 and not later than March 1 of each year
thereafter, the Master Servicer at its expense shall cause a firm of independent
public accountants which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Trustee, the Rating Agencies to
the effect that, with respect to the preceding calendar year, such firm has
examined certain documents and records relating to the Master Servicer's
servicing of mortgage loans of the same type as the Mortgage Loans pursuant to
servicing agreements substantially similar to this Agreement, which agreements
may include this Agreement, and that, on the basis of such an examination,
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, such firm is of the opinion that the Master
Servicer's servicing has been conducted in compliance with the agreements
examined pursuant to this Section 3.14, except for (i) such exceptions as such
firm shall believe to be immaterial,(ii) such other exceptions as shall be set
forth in such statement and (iii) such exceptions that the Uniform Single
Attestation Program for Mortgage Bankers 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 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 3.15 BOOKS AND RECORDS.

         The Master Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for the Mortgage Loans which shall
be appropriately identified in the Master Servicer's computer system to clearly
reflect the ownership of the Mortgage Loans by the Trust. In particular, the
Master Servicer shall maintain in its possession, available for inspection by
the Trustee and shall deliver to the Trustee upon demand, evidence of compliance
with all federal, state and local laws, rules and regulations. To the extent
that original documents are not required for

                                      -71-
<PAGE>

purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Master Servicer may be in the form of microfilm or microfiche
or such other reliable means of recreating original documents, including, but
not limited to, optical imagery techniques so long as the Master Servicer
complies with the requirements of Accepted Servicing Practices.

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

         Section 3.16 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.

         (a) 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
Trustee shall, in accordance with industry standards, file with the Commission
via the Electronic Data Gathering and Retrieval System ("EDGAR"), a Form 8-K
with a copy of the monthly statement to be furnished by the Trustee to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30 in each year commencing in 2005, the Trustee shall, in accordance
with industry standards, file a Form 15 Suspension Notice with respect to the
Trust Fund, if applicable. Prior to (i) March 15, 2005 and (ii) unless and until
a Form 15 Suspension Notice shall have been filed, prior to March 15 of each
year thereafter, the Master Servicer shall provide the Trustee with a Master
Servicer Certification, together with a copy of the annual independent
accountant's servicing report and annual statement of compliance to be delivered
by the Master Servicer pursuant to Sections 3.13 and 3.14. 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 Trustee shall, subject to
subsection (d) below, file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. Such Form 10-K shall include the
Master Servicer Certification and other documentation provided by the Master
Servicer pursuant to the second preceding sentence and the Form 10-K
certification signed by the Depositor. The Depositor hereby grants to the
Trustee 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 Trustee from the Depositor of written termination
of such power of attorney and (ii) the termination of the Trust Fund. The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement, the Mortgage Loans as the Trustee reasonably
deems appropriate to prepare and file all necessary reports with the Commission.
The Trustee shall have no responsibility to file any items other than those
specified in this Section 3.16; provided, however, the Trustee 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 amended (the "Exchange Act"). Copies of all reports filed by the
Trustee under the Exchange Act shall be sent to: the Depositor c/o Bear, Stearns
& Co. Inc., Attn: Managing Director-Analysis and Control, One Metrotech Center
North, Brooklyn, New York 11202-3859. Fees and expenses incurred by the Trustee
in connection with this Section 3.16 shall not be reimbursable from the Trust
Fund.

         (b) In connection with the filing of any 10-K hereunder, the Trustee
shall sign a certification (in the form attached hereto as Exhibit L) for the
Depositor regarding certain aspects of the Form 10-K certification signed by the
Depositor, provided, however, that the Trustee shall not

                                      -72-
<PAGE>

be required to undertake an analysis of any accountant's report attached as an
exhibit to the Form 10-K.

         (c) (i) The Trustee shall indemnify and hold harmless the Depositor and
its officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Trustee's obligations under this Section 3.16 or the Trustee's
negligence, bad faith or willful misconduct in connection therewith.
                  (ii) The Depositor shall indemnify and hold harmless the
Trustee and its officers, directors and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of the obligations of the Depositor under this Section 3.16 or the
Depositor's negligence, bad faith or willful misconduct in connection therewith.

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

                  (iv) If the indemnification provided for herein is unavailable
         or insufficient to hold harmless the Depositor or the Trustee, as
         applicable, then the defaulting party, in connection with a breach of
         its respective obligations under this Section 3.16 or its respective
         negligence, bad faith or willful misconduct in connection therewith,
         agrees that it shall contribute to the amount paid or payable by the
         other parties as a result of the losses, claims, damages or liabilities
         of the other party in such proportion as is appropriate to reflect the
         relative fault and the relative benefit of the Depositor on the one
         hand and the Trustee on the other.

         (d) Nothing shall be construed from the foregoing subsections (a), (b)
and (c) to require the Trustee or any officer, director or Affiliate thereof to
sign any Form 10-K or any certification contained therein. Furthermore, the
inability of the Trustee to file a Form 10-K as a result of the lack of required
information as set forth in Section 3.16(a) or required signatures on such Form
10-K or any certification contained therein shall not be regarded as a breach by
the Trustee of any obligation under this Agreement.

         (e) Notwithstanding the provisions of Section 11.01, this Section 3.16
may be amended without the consent of the Certificateholders.

                                      -73-
<PAGE>

         Section 3.17 UCC. The Trustee agrees to file continuation statements
for any Uniform Commercial Code financing statements which the Seller has
informed the Trustee were filed on the Closing Date in connection with the
Trust. The Seller shall file any financing statements or amendments thereto
required by any change in the Uniform Commercial Code.

         Section 3.18 OPTIONAL PURCHASE OF CERTAIN MORTGAGE LOANS.

         With respect to any Mortgage Loans which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right to purchase any Mortgage Loan from the Trust
which becomes 90 days or more delinquent or becomes an REO Property at a price
equal to the Purchase Price; provided however (i) that such Mortgage Loan is
still 90 days or more delinquent or is an REO Property as of the date of such
purchase and (ii) this purchase option, if not theretofore exercised, shall
terminate on the date prior to the last day of the related Calendar Quarter.
This purchase option, if not exercised, shall not be thereafter reinstated
unless the delinquency is cured and the Mortgage Loan thereafter again becomes
90 days or more delinquent or becomes an REO Property, in which case the option
shall again become exercisable as of the first day of the related Calendar
Quarter.

         In addition, EMC shall, at its option, purchase any Mortgage Loan from
the Trust if the first Due Date for such Mortgage Loan is subsequent to the
Cut-off Date and the initial Scheduled Payment is not made within thirty (30)
days of such Due Date. Such purchase shall be made at a price equal to the
Purchase Price.

         If at any time EMC remits to the Master Servicer a payment for deposit
in the Protected Account covering the amount of the Purchase Price for such a
Mortgage Loan, and EMC provides to the Trustee a certification signed by a
Servicing Officer stating that the amount of such payment has been deposited in
the Protected Account, then the Trustee shall execute the assignment of such
Mortgage Loan prepared and delivered to the Trustee, at the request of EMC,
without recourse, representation or warranty, to EMC which shall succeed to all
the Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. EMC will thereupon own such Mortgage, and all
such security and documents, free of any further obligation to the Trustee or
the Certificateholders with respect thereto.

         Section 3.19 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF MORTGAGE
RATES AND SCHEDULED PAYMENTS.

         In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Scheduled Payments or Stated Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee 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 Depositor and
any successor Master Servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement. Notwithstanding
the foregoing, this Section 3.19 shall not limit the ability of the Master
Servicer to seek recovery of any

                                      -74-
<PAGE>

such amounts from the related Mortgagor under the terms of the related Mortgage
Note and Mortgage, to the extent permitted by applicable law.

         Section 3.20 RESERVE FUND.

         (a) On or before the Closing Date, the Trustee shall establish a
Reserve Fund on behalf of the Holders of the Certificates. The Reserve Fund must
be an Eligible Account. The Reserve Fund shall be entitled "Reserve Fund,
LaSalle Bank National Association as Trustee for the benefit of holders of Bear
Stearns Asset Backed Securities I LLC, Asset-Backed Certificates, Series 2004-
HE5". The Trustee shall demand payment of all money payable by Bear Stearns
Financial Products Inc. (the "Counterparty") under the Yield Maintenance
Agreements. The Trustee shall deposit in the Reserve Fund all payments received
from the Counterparty pursuant to the Yield Maintenance Agreements. On each
Distribution Date the Trustee shall remit amounts received from the Counterparty
to the Holders of the Class I-A, Class II-A, Class M and Class CE Certificates
in the manner provided in clause (b) below. In addition, on each Distribution
Date as to which there is a Basis Risk Shortfall Carry Forward Amount payable to
any Class of Certificates, the Trustee shall deposit the amounts distributable
pursuant to clauses (C) and (D) of Section 5.04(a)(4) into the Reserve Fund and
the Trustee has been directed by the Class CE Certificateholder to distribute
such amounts to the Holders of the Offered Certificates in the amounts and
priorities set forth in clauses (C) and (D) of Section 5.04(a)(4). Any payments
to the Holders of Offered Certificates pursuant to the preceding sentence in
respect of Basis Risk Shortfall Carry Forward Amounts shall not be payments with
respect to a "regular interest" in a REMIC within the meaning of Code Section
860(G)(a)(1).

         (b) Amounts received from the Counterparty under the Yield Maintenance
Agreements shall be distributed in the following manner and order of priority:

                  (i) FIRST, (A) from amounts received under the Yield
                  Maintenance Agreement related to the Class I-A Certificates,
                  to the Class I-A Certificates, pro rata, based on the amount
                  of Basis Risk Shortfall Carryforward Amount for such Classes
                  of Certificates for such Distribution Date, the amount of any
                  Basis Risk Shortfall Carryforward Amount for such Classes of
                  Certificates for such Distribution Date; (B) from amounts
                  received under the Yield Maintenance Agreement related to the
                  Class II-A Certificates, to the Class II-A Certificates, the
                  amount of any Basis Risk Shortfall Carryforward Amount for
                  such Class of Certificates for such Distribution Date; and (C)
                  from amounts received under the Yield Maintenance Agreement
                  related to the Class M Certificates, sequentially to the Class
                  M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and
                  Class M-7 Certificates, in that order, the amount of any Basis
                  Risk Shortfall Carryforward Amount for such Classes of
                  Certificates for such Distribution Date;

                  (ii) SECOND, from any remaining amounts received under the
                  non-related Yield Maintenance Agreements, to the Class I-A,
                  Class II-A and Class M Certificates, as applicable, pro rata,
                  based on the aggregate amount of Basis Risk Shortfall
                  Carryforward Amounts for the Class I-A, Class II-A and Class M
                  Certificates, as applicable, for such Distribution Date to the
                  extent not covered in clause (i) above,

                                      -75-
<PAGE>

                  which amounts so allocated shall be paid in the case of the
                  Class A-I Certificates and the Class M Certificates in the
                  order of priority in clause (i) FIRST (A) and (C) above; and

                  (iii) THIRD, any remaining amounts received under the Yield
                  Maintenance Agreements, to the Class CE Certificates.

         (c) The Reserve Fund is an "outside reserve fund" within the meaning of
Treasury Regulation ss.1.860G-2(h) and shall be an asset of the Trust Fund but
not an asset of any REMIC. The Trustee on behalf of the Trust shall be the
nominal owner of the Reserve Fund. The Class CE Certificateholder shall be the
beneficial owner of the Reserve Fund, subject to the power of the Trustee to
transfer amounts under Section 5.04. Amounts in the Reserve Fund shall, at the
direction of the Class CE Certificateholder, be invested in Permitted
Investments that mature no later than the Business Day prior to the next
succeeding Distribution Date. All net income and gain from such investments
shall be distributed to the Class CE Certificateholder, not as a distribution in
respect of any interest in any REMIC, on such Distribution Date. All amounts
earned on amounts on deposit in the Reserve Fund shall be taxable to the Class
CE Certificateholder. Any losses on such investments shall be deposited in the
Reserve Fund by the Class CE Certificateholder out of its own funds immediately
as realized.

         (d) For federal tax return and information reporting, the right of the
holders of the Offered Certificates to receive payments from the Reserve Fund in
respect of any Basis Risk Shortfall Carry Forward Amount shall be assigned a
value of zero.

         Section 3.21 ADVANCING FACILITY.

         (a) The Master Servicer and/or the Trustee on behalf of the Trust Fund,
in either case, with the consent of the Master Servicer in the case of the
Trustee and, in each case, with prior notice to the Rating Agencies, is hereby
authorized to enter into a facility (the "Advancing Facility") with any Person
which provides that such Person (an "Advancing Person") may fund Advances and/or
Servicing Advances to the Trust Fund under this Agreement, although no such
facility shall reduce or otherwise affect the Master Servicer's obligation to
fund such Advances and/or Servicing Advances. If the Master Servicer enters into
such an Advancing Facility pursuant to this Section 3.21, upon reasonable
request of the Advancing Person, the Trustee shall execute a letter of
acknowledgment, confirming its receipt of notice of the existence of such
Advancing Facility. To the extent that an Advancing Person funds any Advance or
any Servicing Advance and provides the Trustee with notice acknowledged by the
Servicer that such Advancing Person is entitled to reimbursement, such Advancing
Person shall be entitled to receive reimbursement pursuant to this Agreement for
such amount to the extent provided in Section 3.21(b). Such notice from the
Advancing Person must specify the amount of the reimbursement, the Section of
this Agreement that permits the applicable Advance or Servicing Advance to be
reimbursed and the section(s) of the Advancing Facility that entitle the
Advancing Person to request reimbursement from the Trustee, rather than the
Master Servicer, and include the Master Servicer's acknowledgment thereto or
proof of an Event of Default under the Advancing Facility. The Trustee shall
have no duty or liability with respect to any calculation of any reimbursement
to be paid to an Advancing Person and shall be entitled to rely without
independent investigation on the Advancing Person's notice provided

                                      -76-
<PAGE>

pursuant to this Section 3.21. An Advancing Person whose obligations hereunder
are limited to the funding of Advances and/or Servicing Advances shall not be
required to meet the qualifications of a Master Servicer or a subservicer
pursuant to Section 8.02 hereof and will not be deemed to be a subservicer under
this Agreement.

         (b) If an Advancing Facility is entered into, then the Master Servicer
shall not be permitted to reimburse itself therefor under Section 4.02(a)(ii),
Section 4.02(a)(iii) and Section 4.02(a)(v) prior to the remittance to the Trust
Fund, but instead the Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 4.02. The Trustee
is hereby authorized to pay to the Advancing Person, reimbursements for Advances
and Servicing Advances from the Distribution Account to the same extent the
Master Servicer would have been permitted to reimburse itself for such Advances
and/or Servicing Advances in accordance with Section 4.02(a)(ii), Section
4.02(a)(iii) or Section 4.02(a)(v), as the case may be, had the Master Servicer
itself funded such Advance or Servicing Advance. The Trustee is hereby
authorized to pay directly to the Advancing Person such portion of the Servicing
Fee as the parties to any advancing facility agree.

         (c) All Advances and Servicing Advances made pursuant to the terms of
this Agreement shall be deemed made and shall be reimbursed on a "first in-first
out" (FIFO) basis.

         (d) Any amendment to this Section 3.21 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advancing Facility as described generally in this Section 3.21, including
amendments to add provisions relating to a successor master servicer, may be
entered into by the Trustee and the Master Servicer without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement.

                                      -77-
<PAGE>

                                   ARTICLE IV

                                    ACCOUNTS

         Section 4.01 COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED ACCOUNT.

         (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 and (ii) extend the due dates for payments due on a Mortgage Note for a
period not greater than 125 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, and shall be
entitled to reimbursement therefor in accordance with Section 5.01. 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. In addition, if (x) a Mortgage Loan is in
default or default is imminent and (y) the Master Servicer delivers to the
Trustee a certification addressed to the Trustee, based on the advice of counsel
or certified public accountants, in either case, that have a national reputation
with respect to taxation of REMICs, that a modification of such Mortgage Loan
will not result in the imposition of taxes on or disqualify either REMIC I,
REMIC II, REMIC III or REMIC IV, the Master Servicer may, (A) amend the related
Mortgage Note to reduce the Mortgage Rate applicable thereto, provided that such
reduced Mortgage Rate shall in no event be lower than 5.00% with respect to any
Mortgage Loan and (B) amend any Mortgage Note to extend to the maturity thereof.

         The Master Servicer shall not waive (or permit a sub-servicer to waive)
any Prepayment Charge unless: (i) the enforceability thereof shall have been
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally, (ii) the enforcement thereof is
illegal, or any local, state or federal agency has threatened legal action if
the prepayment penalty is enforced, (iii) the collectability thereof shall have
been limited due to acceleration in connection with a foreclosure or other
involuntary payment or (iv) such waiver is standard and customary in servicing
similar Mortgage Loans and relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of the Master Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan. In no event will the Master Servicer waive
a Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
not related to a default or a reasonably foreseeable default. If a Prepayment
Charge is waived, but does not meet the standards described above, then the
Master Servicer is required to pay the amount of such waived Prepayment Charge,
for the benefit of the Class P Certificates, by remitting such amount to the
Trustee by the Distribution Account Deposit Date.

                                      -78-
<PAGE>

         (b) The Master Servicer shall establish and maintain a Protected
Account (which shall at all times be an Eligible Account) with a depository
institution in the name of the Master Servicer for the benefit of the Trustee on
behalf of the Certificateholders and designated "EMC Mortgage Corporation, as
Master Servicer, for the benefit of LaSalle Bank National Association, in trust
for registered holders of Bear Stearns Asset Backed Securities I LLC,
Asset-Backed Certificates Series 2004-HE5". The Master Servicer shall deposit or
cause to be deposited into the Protected Account on a daily basis within one
Business Day of receipt, except as otherwise specifically provided herein, the
following payments and collections remitted by subservicers or received by it in
respect of the Mortgage Loans subsequent to the Cut-off Date (other than in
respect of principal and interest due on the Mortgage Loans on or before the
Cut-off Date) and the following amounts required to be deposited hereunder:

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

                  (ii) all payments on account of interest on the Mortgage Loans
         net of the Servicing Fee permitted under Section 3.10 and LPMI Fees, if
         any;

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

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

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

                  (vi) any Prepayment Charges collected on the Mortgage Loans;
         and

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

         The foregoing requirements for remittance by the Master Servicer into
the Protected Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be 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 4.02, it may at any time withdraw or direct the institution maintaining
the Protected Account, to withdraw such amount from the Protected 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 Protected Account, that describes the amounts deposited in error
in the Protected Account. The Master Servicer shall maintain adequate records
with respect to all withdrawals made pursuant to this Section. All funds
deposited in the Protected Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 4.02.

                                      -79-
<PAGE>

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

         (d) 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 Protected Account prior to any change thereof.

         Section 4.02 PERMITTED WITHDRAWALS FROM THE PROTECTED ACCOUNT.

         The Master Servicer may from time to time make withdrawals from the
Protected Account for the following purposes:

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

                  (ii) to reimburse the Master Servicer for Advances made by it
         with respect to the Mortgage Loans, provided, however, that the Master
         Servicer's right of reimbursement pursuant to this subclause (ii) shall
         be limited to amounts received on particular Mortgage Loan(s)
         (including, for this purpose, Liquidation Proceeds, Insurance 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 the Master Servicer for any previously made
         portion of a Servicing Advance or an Advance made by the Master
         Servicer that, in the good faith judgment of the Master Servicer, will
         not be ultimately recoverable by it from the related Mortgagor, any
         related Liquidation Proceeds, Insurance Proceeds or otherwise (a
         "Nonrecoverable Advance"), to the extent not reimbursed pursuant to
         clause (ii) or clause (v);

                  (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, provided,
         however, that the Master Servicer's right to reimbursement for
         Servicing Advances pursuant to this subclause (v) with respect to any
         Mortgage Loan shall be limited to amounts received on particular
         Mortgage Loan(s)

                                      -80-
<PAGE>

         (including, for this purpose, Liquidation Proceeds, Insurance Proceeds,
         Subsequent Recoveries and purchase and repurchase proceeds) that
         represent late recoveries of the payments for which such Servicing
         Advances were made;

                  (vi) to pay to the Seller, the Depositor, Encore, or itself,
         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 3.18 of this Agreement or Section 8 of the Mortgage Loan
         Purchase Agreement, all amounts received thereon and not taken into
         account in determining the related Stated Principal Balance of such
         repurchased Mortgage Loan;

                  (vii) to pay any expenses recoverable by the Master Servicer
         pursuant to Section 7.04 of this Agreement;

                  (viii) to withdraw pursuant to Section 4.01 any amount
         deposited in the Protected Account and not required to be deposited
         therein; and

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

         In addition, no later than 1:00 p.m. Eastern time on the Distribution
Account Deposit Date, the Master Servicer shall withdraw from the Protected
Account and remit to the Trustee the amount of Interest Funds for each Loan
Group (without taking into account any reduction in the amount of Interest Funds
attributable to the application of clause (c) of the definition thereof
contained in Article I of this Agreement) and Principal Funds for each Loan
Group collected, to the extent on deposit, and the Trustee shall deposit such
amount in the Distribution Account. In addition, on or before the Distribution
Account Deposit Date, the Master Servicer shall remit to the Trustee for deposit
in the Distribution Account any Advances or any payments of Compensating
Interest required to be made by the Master Servicer with respect to the Mortgage
Loans. Furthermore, on each Distribution Account Deposit Date, the Master
Servicer shall remit to the Trustee all Prepayment Charges collected by the
Master Servicer with respect to the Mortgage Loans during the related Prepayment
Period.

         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 Protected Account pursuant to subclauses (i), (ii), (iv),
(v), (vi) and (vii) above. Prior to making any withdrawal from the Protected
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 or Servicing 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.

                                      -81-
<PAGE>

         Section 4.03 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW
ACCOUNTS.

         With respect to each Mortgage Loan, 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 with
respect to each Mortgage Loan pursuant to Section 3.01 (with respect to taxes
and assessments and insurance premiums) and Section 3.05 (with respect to hazard
insurance), to refund to any Mortgagors for any Mortgage Loans any sums as may
be determined to be overages, to pay interest, if required by law or the terms
of the related Mortgage or Mortgage Note, to such Mortgagors on balances in the
Escrow Account or to clear and terminate the Escrow Account at the termination
of this Agreement in accordance with Section 10.01 thereof. The Escrow Account
shall not be a part of the Trust Fund.

         Section 4.04 DISTRIBUTION ACCOUNT.

         (a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Distribution Account as
a segregated trust account or accounts.

         (b) All amounts deposited to the Distribution Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.

         (c) The Distribution Account shall constitute an Eligible Account of
the Trust Fund segregated on the books of the Trustee and held by the Trustee
and the Distribution Account and the funds deposited therein shall not be
subject to, and shall be protected from, all claims, liens, and encumbrances of
any creditors or depositors of the Trustee (whether made directly, or indirectly
through a liquidator or receiver of the Trustee). The amount at any time
credited to the Distribution Account may be invested in the name of the Trustee,
in such Permitted Investments, or deposited in demand deposits with such
depository institutions, as determined by the Trustee. All Permitted Investments
shall mature or be subject to redemption or withdrawal on or before, and shall
be held until, the next succeeding Distribution Date if the obligor for such
Permitted Investment is the Trustee or, if such obligor is any other Person, the
Business Day preceding such Distribution Date. All investment earnings on
amounts on deposit in the Distribution Account or benefit from funds uninvested
therein from time to time shall be for the account of the Trustee. The Trustee
shall be permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Trustee shall deposit
the amount of the loss in the Distribution Account not later than the applicable
Distribution Date on which the moneys so invested are required to be distributed
to the Certificateholders. With respect to the Distribution Account and the
funds deposited therein,

                                      -82-
<PAGE>

the Trustee shall take such action as may be necessary to ensure that the
Certificateholders shall be entitled to the priorities afforded to such a trust
account (in addition to a claim against the estate of the Trustee) as provided
by 12 U.S.C. ss. 92a(e), and applicable regulations pursuant thereto, if
applicable, or any applicable comparable state statute applicable to state
chartered banking corporations.

         Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT.

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

                  (i) to pay to itself the Trustee Fee;

                  (ii) to reimburse the Trustee for expenses, costs and
         liabilities incurred by or reimbursable to it pursuant to this
         Agreement;

                  (iii) to pay investment income to the Trustee;

                  (iv) to remove amounts deposited in error; and

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

         (b) On each Distribution Date, the Trustee shall distribute Interest
Funds and Principal Funds in the Distribution Account for each Loan Group to the
holders of the Certificates in accordance with Section 5.04.

         Section 4.06 CLASS P CERTIFICATE ACCOUNT.

         (a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Class P Certificateholders, the Class P
Certificate Account as a segregated trust account or accounts.

         (b) On the Closing Date, the Depositor will deposit, or cause to be
deposited in the Class P Certificate Account, an amount equal to $100. All
amounts deposited to the Class P Certificate Account shall be held by the
Trustee in the name of the Trustee in trust for the benefit of the Class P
Certificateholders in accordance with the terms and provisions of this
Agreement. The amount on deposit in the Class P Certificate Account shall be
held uninvested.

                                      -83-
<PAGE>

                                    ARTICLE V

                           DISTRIBUTIONS AND ADVANCES

         Section 5.01 ADVANCES.

         The Master Servicer shall, or shall cause the related subservicer
pursuant to the Subservicing Agreement to, make an Advance and deposit such
Advance in the Protected Account. Each such Advance shall be remitted to the
Distribution Account no later than 1:00 p.m. Eastern time on the Distribution
Account Deposit Date in immediately available funds. The Master Servicer shall
be obligated to make any such Advance only to the extent that such advance would
not be a Nonrecoverable Advance. If the Master Servicer shall have determined
that it has made a Nonrecoverable Advance or that a proposed Advance or a lesser
portion of such Advance would constitute a Nonrecoverable Advance, the Master
Servicer shall deliver (i) to the Trustee for the benefit of the
Certificateholders funds constituting the remaining portion of such Advance, if
applicable, and (ii) to the Depositor, each Rating Agency and the Trustee an
Officer's Certificate setting forth the basis for such determination. Subject to
the Master Servicer's recoverability determination, in the event that a
subservicer fails to make a required Advance, the Master Servicer shall be
required to remit the amount of such Advance to the Distribution Account.

         In lieu of making all or a portion of such Advance from its own funds,
the Master Servicer may (i) cause to be made an appropriate entry in its records
relating to the Protected Account that any Amount Held for Future Distributions
has been used by the Master Servicer in discharge of its obligation to make any
such Advance and (ii) transfer such funds from the Protected Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Master Servicer by deposit in the Distribution Account, no later than the
close of business on the Business Day immediately preceding the Distribution
Date on which such funds are required to be distributed pursuant to this
Agreement.

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

         Subject to and in accordance with the provisions of Article VIII
hereof, in the event the Master Servicer fails to make such Advance, then the
Trustee, as Successor Master Servicer, shall be obligated to make such Advance,
subject to the provisions of this Section 5.01.

                                      -84-
<PAGE>

         Section 5.02 COMPENSATING INTEREST PAYMENTS.

         In the event that there is a Prepayment Interest Shortfall arising from
a voluntary Principal Prepayment in part or in full by the Mortgagor with
respect to any Mortgage Loan, the Master Servicer shall, to the extent of the
Servicing Fee for such Distribution Date, deposit into the Distribution Account,
as a reduction of the Servicing Fee 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 Seller, the Trust Fund or
the Certificateholders.

         Section 5.03 REMIC DISTRIBUTIONS.

         On each Distribution Date the Trustee shall be deemed to have allocated
distributions to the REMIC I Regular Interests in accordance with Section 5.06
hereof.

         Section 5.04 DISTRIBUTIONS.

         (a) On each Distribution Date, an amount equal to the Interest Funds
and Principal Funds for each Loan Group for such Distribution Date shall be
withdrawn by the Trustee from the Distribution Account and distributed in the
following order of priority:

         (1) Interest Funds shall be distributed in the following manner and
order of priority:

                  (A) From Interest Funds in respect of:

                  (i) Loan Group I, to the Class I-A-1 Certificates and Class
         I-A-2 Certificates, the Current Interest and any Interest Carry Forward
         Amount for each such Class, pro rata in accordance with the amount of
         accrued interest due thereon;

                  (ii) Loan Group II, to the Class II-A Certificates, the
         Current Interest and any Interest Carry Forward Amount for such Class;
         and

                  (iii) Loan Group III, to the Class III-A Certificates, the
         Current Interest and any Interest Carry Forward Amount for such Class.

                  (B) From remaining Interest Funds in respect of the
         non-related Loan Groups, to the Class I-A, Class II-A and Class III-A
         Certificates, the remaining Current Interest, if any, and the remaining
         Interest Carry Forward Amount, if any, for each such Class, pro rata in
         accordance with the amount of accrued interest due thereon; and

                  (C) From remaining Interest Funds in respect of all Loan
         Groups, sequentially, to the Class M-1, Class M-2, Class M-3, Class
         M-4, Class M-5, Class M-6 and Class M-7 Certificates, in that order,
         the Current Interest for each such Class.

                                      -85-
<PAGE>

         Any Excess Spread to the extent necessary to meet a level of
overcollateralization equal to the Overcollateralization Target Amount will be
the Extra Principal Distribution Amount and will be included as part of the
Principal Distribution Amount. Any Remaining Excess Spread together with any
Overcollateralization Release Amount will be applied as Excess Cashflow and
distributed pursuant to clauses (4)(A) through (F) below.

         On any Distribution Date, any Relief Act Interest Shortfalls and any
Prepayment Interest Shortfalls to the extent not covered by Compensating
Interest will be allocated as set forth in the definition of "Current Interest"
herein.

         (2) The Principal Distribution Amount, shall be distributed in the
following manner and order of priority:

                  (A) For each Distribution Date (i) prior to the Stepdown Date
         or (ii) on which a Trigger Event is in effect:

                  (i) To the Class A Certificates, the Principal Distribution
                  Amount for such Distribution Date to be distributed as
                  follows:

                           (1) the Group I Principal Distribution Amount for
                           such Distribution Date, sequentially, to the Class
                           I-A-1 Certificates and Class I-A-2 Certificates, in
                           that order, in each case until the Certificate
                           Principal Balance of each such Class is reduced to
                           zero;

                           (2) the Group II Principal Distribution Amount for
                           such Distribution Date, to the Class II-A
                           Certificates, until the Certificate Principal Balance
                           of such Class is reduced to zero; and

                           (3) the Group III Principal Distribution Amount for
                           such Distribution Date, to the Class III-A
                           Certificates, until the Certificate Principal Balance
                           of such Class is reduced to zero.

                  (ii) To the Class M-1 Certificates, any remaining Principal
                  Distribution Amount in respect of all Loan Groups for such
                  Distribution Date, until the Certificate Principal Balance of
                  such Class is reduced to zero;

                  (iii) To the Class M-2 Certificates, any remaining Principal
                  Distribution Amount in respect of all Loan Groups for such
                  Distribution Date, until the Certificate Principal Balance of
                  such Class is reduced to zero;

                  (iv) To the Class M-3 Certificates, any remaining Principal
                  Distribution Amount in respect of all Loan Groups for such
                  Distribution Date, until the Certificate Principal Balance of
                  such Class is reduced to zero;

                                      -86-
<PAGE>

                  (v) To the Class M-4 Certificates, any remaining Principal
                  Distribution Amount in respect of all Loan Groups for such
                  Distribution Date, until the Certificate Principal Balance of
                  such Class is reduced to zero;

                  (vi) To the Class M-5 Certificates, any remaining Principal
                  Distribution Amount in respect of all Loan Groups for such
                  Distribution Date, until the Certificate Principal Balance of
                  such Class is reduced to zero;

                  (vii) To the Class M-6 Certificates, any remaining Principal
                  Distribution Amount in respect of all Loan Groups for such
                  Distribution Date, until the Certificate Principal Balance of
                  such Class is reduced to zero; and

                  (viii) To the Class M-7 Certificates, any remaining Principal
                  Distribution Amount in respect of all Loan Groups for such
                  Distribution Date, until the Certificate Principal Balance of
                  such Class is reduced to zero.

                  (B) For each Distribution Date on or after the Stepdown Date,
                  so long as a Trigger Event is not in effect:

                  (i) To the Class A Certificates, the Principal Distribution
                  Amount for such Distribution Date to be distributed as
                  follows:

                           (1) from the Group I Principal Distribution Amount
                           for such Distribution Date, sequentially, to the
                           Class I-A-1 Certificates and Class I-A-2
                           Certificates, in that order, the Class I-A Principal
                           Distribution Amount for such Distribution Date, until
                           the Certificate Principal Balance of each such Class
                           is reduced to zero;

                           (2) from the Group II Principal Distribution Amount
                           for such Distribution Date, to the Class II-A
                           Certificates, the Class II-A Principal Distribution
                           Amount for such Distribution Date, until the
                           Certificate Principal Balance of such Class is
                           reduced to zero;

                           (3) from the Group III Principal Distribution Amount
                           for such Distribution Date, to the Class III-A
                           Certificates, the Class III-A Principal Distribution
                           Amount for such Distribution Date, until the
                           Certificate Principal Balance of such Class is
                           reduced to zero;

                  (ii) To the Class M-1 Certificates, from any remaining
                  Principal Distribution Amount in respect of all Loan Groups
                  for such Distribution Date, the Class M-1 Principal
                  Distribution Amount for such Distribution Date, until the
                  Certificate Principal Balance of such Class is reduced to
                  zero;

                  (iii) To the Class M-2 Certificates, from any remaining
                  Principal Distribution Amount in respect of all Loan Groups
                  for such Distribution Date, the Class M-2

                                      -87-
<PAGE>

                  Principal Distribution Amount for such Distribution Date,
                  until the Certificate Principal Balance of such Class is
                  reduced to zero;

                  (iv) To the Class M-3 Certificates, from any remaining
                  Principal Distribution Amount in respect of all Loan Groups
                  for such Distribution Date, the Class M-3 Principal
                  Distribution Amount for such Distribution Date, until the
                  Certificate Principal Balance of such Class is reduced to
                  zero;

                  (v) To the Class M-4 Certificates, from any remaining
                  Principal Distribution Amount in respect of all Loan Groups
                  for such Distribution Date, the Class M-4 Principal
                  Distribution Amount for such Distribution Date, until the
                  Certificate Principal Balance of such Class is reduced to
                  zero;

                  (vi) To the Class M-5 Certificates, from any remaining
                  Principal Distribution Amount in respect of all Loan Groups
                  for such Distribution Date, the Class M-5 Principal
                  Distribution Amount for such Distribution Date, until the
                  Certificate Principal Balance of such Class is reduced to
                  zero;

                  (vii) To the Class M-6 Certificates, from any remaining
                  Principal Distribution Amount in respect of all Loan Groups
                  for such Distribution Date, the Class M-6 Principal
                  Distribution Amount for such Distribution Date, until the
                  Certificate Principal Balance of such Class is reduced to
                  zero; and

                  (viii) To the Class M-7 Certificates, from any remaining
                  Principal Distribution Amount in respect of all Loan Groups
                  for such Distribution Date, the Class M-7 Principal
                  Distribution Amount for such Distribution Date, until the
                  Certificate Principal Balance of such Class is reduced to zero

         (3) Notwithstanding the provisions of clauses (2)(A) and (B) above, if
on any Distribution Date the Class A Certificates related to a Loan Group are no
longer outstanding, the pro rata portion of the applicable Principal
Distribution Amount or the applicable Class A Principal Distribution Amount, as
applicable, otherwise allocable to such Class A Certificates will be allocated
among the remaining group or groups of Class A Certificates pro rata, based on
the aggregate Certificate Principal Balance of the Class A Certificates in each
such remaining group (after giving effect to distributions on such Distribution
Date from such Class or Classes' related Loan Group in accordance with clauses
(2)(A) and (B), and among the Classes of each such group, in the same manner and
order of priority described above; and

         (4) Any Excess Cashflow shall be distributed in the following manner
and order of priority:

                  (A) To the Class A Certificates, (a) first, any remaining
         Interest Carry Forward Amount for such Classes, pro rata, in accordance
         with the Interest Carry Forward Amount due with respect to each such
         Class, to the extent not fully paid pursuant to clauses (1) (A) and (B)
         above and (b) second, any Unpaid Realized Loss Amount for such Classes
         for such

                                      -88-
<PAGE>

         Distribution Date, pro rata, in accordance with the Applied Realized
         Loss Amount allocated to each such Class;

                  (B) From any remaining Excess Cashflow, sequentially, to the
         Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and
         Class M-7 Certificates, in that order, an amount equal to the Interest
         Carry Forward Amount for each such Class for such Distribution Date;

                  (C) From any remaining Excess Cashflow otherwise distributable
         to the Class CE Certificates, to the Reserve Fund to pay to the Class
         I-A, Class II-A and Class III-A Certificates, any Basis Risk Shortfall
         Carry Forward Amount for each such Class for such Distribution Date, on
         a pro rata basis, based on the amount of the Basis Risk Shortfall Carry
         Forward Amount for each such Class, if any, and in the case of the
         Class I-A Certificates and Class II-A Certificates, to the extent not
         covered by the Yield Maintenance Agreements;

                  (D) From any remaining Excess Cashflow otherwise distributable
         to the Class CE Certificates, to the Reserve Fund to pay to the Class
         M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class
         M-7 Certificates, sequentially in that order, any Basis Risk Shortfall
         Carry Forward Amount for each such Class for such Distribution Date, if
         any, in each case to the extent not covered by the Yield Maintenance
         Agreements;

                  (E) From any remaining Excess Cashflow, to the Class CE
         Certificates, an amount equal to the Class CE Distribution Amount
         reduced by amounts distributed in clauses (C) and (D) above; and

                  (F) any remaining amounts to each of the Class R-1, Class R-2
         and Class RX Certificates, based on the related REMIC in which such
         amounts remain.

         On each Distribution Date, all amounts in respect of Prepayment Charges
shall be distributed to the Holders of the Class P Certificates, provided that
such distributions shall not be in reduction of the principal balance thereof.
On the Distribution Date immediately following the expiration of the latest
Prepayment Charge term as identified on the Mortgage Loan Schedule, any amount
on deposit in the Class P Certificate Account will be distributed to the Holders
of the Class P Certificates in reduction of the Certificate Principal Balance
thereof.

         In addition, notwithstanding the foregoing, on any Distribution Date
after the Distribution Date on which the Certificate Principal Balance of a
Class of Offered Certificates has been reduced to zero, that Class of Offered
Certificates will be retired and will no longer be entitled to distributions,
including distributions in respect of Prepayment Interest Shortfalls or Basis
Risk Shortfall Carryforward Amounts.

         (b) In addition to the foregoing distributions, with respect to any
Subsequent Recoveries, the Master Servicer shall deposit such funds into the
Protected Account pursuant to Section 4.01(b)(iii). If, after taking into
account such Subsequent Recoveries, 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

                                      -89-
<PAGE>

Realized Losses have been allocated, but not by more than the amount of Realized
Losses previously allocated to that Class of Certificates pursuant to Section
5.04A. The amount of any remaining Subsequent Recoveries will be applied to
increase the Certificate Principal Balance of the Class of Certificates with the
next highest payment priority, up to the amount of such Realized Losses
previously allocated to that Class of Certificates pursuant to Section 5.04A,
and so on. Holders of such Certificates will not be entitled to any payment in
respect of Current Interest on the amount of such increases for any Interest
Accrual Period preceding the Distribution Date on which such increase occurs.
Any such increases shall be applied to the Certificate Principal Balance of each
Certificate of such Class in accordance with its respective Percentage Interest.

         (c) Subject to Section 10.02 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 such Holder has so notified
the Trustee at least 5 Business Days prior to the related Record Date, or, if
not, by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 10.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the name
of a Depository shall be made to such Depository in immediately available funds.

         (d) On or before 5:00 p.m. Eastern time on the fifth Business Day
immediately preceding each Distribution Date, the Master Servicer shall deliver
a report to the Trustee in electronic form (or by such other means as the Master
Servicer and the Trustee may agree from time to time) containing such data and
information, as agreed to by the Master Servicer and the Trustee such as to
permit the Trustee to prepare the Monthly Statement to Certificateholders and to
make the required distributions for the related Distribution Date.

         Section 5.04A  ALLOCATION OF REALIZED LOSSES.

         (a) All Realized Losses on the Mortgage Loans allocated to any REMIC I
Regular Interest pursuant to Section 5.04A(b) on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date as follows: first, to Excess
Spread; second, to the Class CE Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class M-7 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-6 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; fifth, to the Class M-5 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; sixth, to
the Class M-4 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; seventh, to the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; eighth, to the
Class M-2 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; ninth, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; tenth, to related Class or
Classes of Class A Certificates, on a pro rata basis, until the Certificate
Principal Balances thereof have been reduced to zero; and eleventh, to the
unrelated Class or Classes of Class A Certificates, on a pro rata basis, until
the Certificate Principal Balances thereof have 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

                                      -90-
<PAGE>

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.

         (b) Any allocation of Realized Losses to a Class of Offered
Certificates 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 clause (E) of Section 5.04(a)(4). No
allocations of any Realized Losses shall be made to the Certificate Principal
Balance of the 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.

         (c) (i) The REMIC I Marker Percentage of all Realized Losses on the
Mortgage Loans (without duplication of losses allocated pursuant to Section
1.02) 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 Accrued Interest payable to the REMIC I Regular
Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to
the REMIC I Interest Loss Allocation Amount, 98.00% and 2.00%, respectively;
second, to the Uncertificated Principal Balances of the REMIC I Regular Interest
AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC
I Principal Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to
the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-7 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest M-7 has been reduced to zero; fourth, to the Uncertificated Principal
Balances of REMIC I Regular Interest AA, REMIC I Regular Interest M-6 and REMIC
I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest M-6 has been
reduced to zero; fifth to the Uncertificated Principal Balances of REMIC I
Regular Interest AA, REMIC I Regular Interest M-5 and REMIC I Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest M-5 has been reduced to zero; sixth, to the
Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-4 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest M-4 has been reduced to zero; seventh to the Uncertificated Principal
Balances of REMIC I Regular Interest AA, REMIC I Regular Interest M-3 and REMIC
I Regular Interest ZZ, 98.00%, 1.00%, and 1.00%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest M-3 has been
reduced to zero; eighth to the Uncertificated Principal Balances of REMIC I
Regular Interest AA, REMIC I Regular Interest M-2 and REMIC I Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest M-2 has been reduced to zero; ninth to the
Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-1 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%,

                                      -91-
<PAGE>

respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest M-1 has been reduced to zero; tenth with respect to any Realized Losses
on the Mortgage Loans, to the Uncertificated Principal Balance of REMIC I
Regular Interest AA, 98.00%, to the Uncertificated Principal Balances of REMIC I
Regular Interests I-A-1, I-A-2, II-A and III-A, 1.00% pro rata, and to the
Uncertificated Principal Balance of REMIC I Regular Interest ZZ, 1.00%, until
the Uncertificated Principal Balances of REMIC I Regular Interests I-A-1, I-A-2,
II-A and III-A have been reduced to zero.

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

         Section 5.05 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.

         (a) Not later than each Distribution Date, the Trustee shall prepare
and make available to each Holder of Certificates, the Trustee, the Master
Servicer 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, (B) the aggregate
         of all scheduled payments of principal included therein and (C) the
         Extra Principal Distribution Amount (if any);

                  (ii) the amount of such distribution to Holders of each Class
         allocable to interest and the portion thereof, if any, provided by the
         Yield Maintenance Agreements;

                  (iii) the Interest Carry Forward Amount and any Basis Risk
         Shortfall Carry Forward Amount for each Class of Certificates;

                  (iv) the Certificate Principal Balance or Certificate Notional
         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 (A) all
         of the Mortgage Loans, (B) the first lien Mortgage Loans, (C) the
         second lien Mortgage Loans, (D) the

                                      -92-
<PAGE>

         Adjustable Rate Mortgage Loans and (E) the Fixed Rate Mortgage Loans,
         for the following Distribution Date;

                  (vi) the 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 Offered
         Certificates with respect to the current Accrual Period, and, if
         applicable, whether such Pass-Through Rate was limited by the
         applicable Net Rate Cap;

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

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

                  (x) the number and aggregate principal amounts of Mortgage
         Loans (A) Delinquent (exclusive of Mortgage Loans in foreclosure and
         bankruptcy) (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more
         days, (B) in foreclosure and delinquent (1) 31 to 60 days, (2) 61 to 90
         days and (3) 91 or more days and (C) in bankruptcy and delinquent (1)
         31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, in each case
         as of the close of business on the last day of the calendar month
         preceding such Distribution Date and separately identifying such
         information for the (1) first lien Mortgage Loans, (2) second lien
         Mortgage Loans, (3) Adjustable Rate Mortgage Loans and (4) the Fixed
         Rate Mortgage Loans;

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

                  (xii) the total number and principal balance of any real
         estate owned or REO Properties as of the close of business on the
         Determination Date preceding such Distribution Date;

                  (xiii) the three month rolling average of the percent
         equivalent of a fraction, the numerator of which is the aggregate
         stated Principal Balance of the Mortgage Loans that are 60 days or more
         delinquent or are in bankruptcy or foreclosure or are REO Properties,
         and the denominator of which is the aggregate Stated Principal Balance
         of all of the Mortgage Loans as of the last day of such Distribution
         Date and separately identifying such information for the (1) first lien
         Mortgage Loans, (2) second lien Mortgage Loans, (3) Adjustable Rate
         Mortgage Loans and (4) the Fixed Rate Mortgage Loans;

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

                  (xv) whether a Trigger Event exists; and

                                      -93-
<PAGE>

                  (xvi) the amount of the distribution made on such Distribution
         Date to the Holders of the Class P Certificates allocable to Prepayment
         Charges.

         The Trustee may make the foregoing Monthly Statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders via the Trustee's internet
website. The Trustee's internet website shall initially be located at
"www.etrustee.net". Assistance in using the website can be obtained by calling
the Trustee's customer service desk at (312) 904-6709. Parties that are unable
to use the above distribution options are entitled to have a paper copy mailed
to them via first class mail by calling the customer service desk and indicating
such. The Trustee may change the way Monthly Statements are distributed in order
to make such distributions more convenient or more accessible to the above
parties.

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

         (c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished upon request to each Person who at
any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 5.05 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.

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

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

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

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

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

                                      -94-
<PAGE>

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

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

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

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

         Section 5.06 REMIC DESIGNATIONS AND REMIC DISTRIBUTIONS.

         (a) The Trustee shall elect that each of REMIC I, REMIC II, REMIC III
and REMIC IV shall be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of such
REMIC elections. The assets of REMIC I shall include the Mortgage Loans and all
interest owing in respect of and principal due thereon, the Distribution
Account, the Protected Account, any REO Property, any proceeds of the foregoing
and any other assets subject to this Agreement (other than the Reserve Fund).
The REMIC I Regular Interests shall constitute the assets of REMIC II. The Class
CE Interest shall constitute the assets of REMIC III and the Class P Interest
shall constitute the assets of REMIC IV.

         (b) (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-I Certificates, as the
case may be:

                  (i) to Holders of REMIC I Regular Interest AA, REMIC Regular
         Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular
         Interest II-A, REMIC I Regular Interest III-A, REMIC I Regular Interest
         M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest M-3, REMIC
         I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular
         Interest M-6, REMIC I Regular Interest M-7 and REMIC I Regular Interest
         ZZ, 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 ZZ 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 Uncertificated Accrued Interest Deferral
         Amount and such amount will be payable to the Holders of REMIC I
         Regular Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular
         Interest II-A, REMIC I Regular Interest III-A, REMIC I Regular Interest
         M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest M-3,

                                      -95-
<PAGE>

         REMIC I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I
         Regular Interest M-6 and REMIC I Regular Interest M-7, in the same
         proportion as the Overcollateralization Increase Amount is allocated to
         the Corresponding Certificates and the Uncertificated Principal Balance
         of REMIC I Regular Interest ZZ shall be increased by such amount;

                  (ii) to Holders of REMIC I Regular Interest 1A, REMIC I
         Regular Interest 1B, REMIC I Regular Interest 2A, REMIC I Regular
         Interest 2B, REMIC I Regular Interest 3A, REMIC I Regular Interest 3B
         and REMIC I Regular Interest XX, pro rata, an amount equal to (A) the
         Uncertificated Accrued Interest for such Distribution Date, plus (B)
         any amounts in respect thereof remaining unpaid from previous
         Distribution Dates;

                  (iii) to the Holders of REMIC I Regular Interests AA, I-A-1,
         I-A-2, II-A, III-A, M-1, M-2, M-3, M-4, M-5, M-6, M-7 and ZZ, in an
         amount equal to the remainder of the REMIC I Marker Allocation
         Percentage of the Interest Funds and Principal Funds for all Loan
         Groups for such Distribution Date after the distributions made pursuant
         to clause (i) above, allocated as follows:

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

                  (B) to the Holders of REMIC I Regular Interest I-A-1, REMIC I
         Regular Interest I-A-2, REMIC I Regular Interest II-A, REMIC I Regular
         Interest III-A, REMIC I Regular Interest M-1, REMIC I Regular Interest
         M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4, REMIC
         I Regular Interest M-5, REMIC I Regular Interest M-6 and REMIC I
         Regular Interest M-7, 1.00% of such remainder, in the same proportion
         as principal payments are allocated to the related Corresponding
         Certificates, until the Uncertificated Principal Balances of such REMIC
         I Regular Interests are reduced to zero;

                  (C) to the Holders of REMIC I Regular Interest ZZ, 1.00% of
         such remainder, 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 R-1
         Certificates;

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

                  (iv) to the Holders of REMIC I Regular Interests 1A, 1B, 2A,
         2B, 3A, 3B and XX, in an amount equal to the remainder of the REMIC I
         Sub WAC Allocation Percentage of the Interest Funds and Principal Funds
         for all Loan Groups for such Distribution Date after the distributions
         made pursuant to clause (ii) above, first, so as to keep the
         Uncertificated Principal Balance of each REMIC I Regular Interest
         ending with the designation "B" equal to 0.01% of the aggregate Stated
         Principal Balance of the Mortgage Loans in the related Loan Group;
         second, to each REMIC I Regular Interest ending with the designation
         "A," so that

                                      -96-
<PAGE>

         the Uncertificated Principal Balance of each such REMIC I Regular
         Interest is equal to 0.01% of the excess of (x) the aggregate Stated
         Principal Balance of the Mortgage Loans in the related Loan Group over
         (y) the current Certificate Principal Balance of the Class A
         Certificate related to such Loan Group (except that if any such excess
         is a larger number than in the preceding distribution period, the least
         amount of principal shall be distributed to such REMIC I Regular
         Interests such that the REMIC I Subordinated Balance Ratio is
         maintained); and third, any remaining principal to REMIC I Regular
         Interest XX.

         (c) On each Distribution Date, all amounts representing Prepayment
Charges deemed distributed in respect of the Class P Interest shall be deemed
distributed in respect of REMIC I Regular Interest P, provided that such amounts
shall not reduce the Uncertificated Principal Balance of REMIC I Regular
Interest P. On the Distribution Date immediately following the expiration of the
latest Prepayment Charge term as identified on the Mortgage Loan Schedule, $100
shall be deemed distributed in respect of REMIC I Regular Interest P in
reduction of the Uncertificated Principal Balance thereof.

         (d) On each Distribution Date, an amount equal to the amounts
distributed pursuant to Sections 5.04(a)(4)(C), (D) and (E) on such date shall
be deemed distributed from REMIC II to REMIC III in respect of the Class CE
Distribution Amount distributable to the Class CE Interest.

         (e) On each Distribution Date, 100% of the amounts deemed distributed
on REMIC I Regular Interest P shall be deemed distributed by REMIC II to REMIC
IV in respect of the Class P Interest.

                                      -97-
<PAGE>

                                   ARTICLE VI

                                THE CERTIFICATES

         Section 6.01 THE CERTIFICATES.

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

<TABLE>
<CAPTION>
                        Minimum           Integral Multiple in      Original Certificate
        Class         Denomination          Excess of Minimum        Principal Balance
        -----         ------------          -----------------        -----------------
<S>                   <C>                        <C>                  <C>
        I-A-1         $     25,000               $1.00                $   126,935,000
        I-A-2         $     25,000               $1.00                $    20,777,000
        II-A          $     25,000               $1.00                $   166,214,000
        III-A         $     25,000               $1.00                $   532,859,000
         M-1          $     25,000               $1.00                $    62,744,000
         M-2          $     25,000               $1.00                $    50,617,000
         M-3          $     25,000               $1.00                $    14,236,000
         M-4          $     25,000               $1.00                $    12,127,000
         M-5          $     25,000               $1.00                $    10,545,000
         M-6          $     25,000               $1.00                $    10,545,000
         M-7          $     25,000               $1.00                $    18,454,000
         CE               10%                      1%                 $ 28,473,224.41
          P           $        100                N/A                 $        100.00
         R-1             100%                     N/A                        N/A
         R-2             100%                     N/A                        N/A
         R-X             100%                     N/A                        N/A
</TABLE>

         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 the countersignature
of the Trustee by manual signature, and such countersignature upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly countersigned and delivered hereunder. All
Certificates shall be dated the date of their countersignature. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.

                                      -98-
<PAGE>

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

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

         (a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 6.09 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 laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall each certify
to the Trustee in writing the facts surrounding the Transfer by (x)(i) the
delivery to the Trustee by the Certificateholder desiring to effect such
transfer of a certificate substantially in the form set forth in Exhibit E (the
"Transferor Certificate") and (ii) the delivery by the Certificateholder's
prospective transferee of (A) a letter in substantially the form of Exhibit F
(the "Investment Letter") if the prospective transferee is an Institutional
Accredited Investor or (B) a letter in substantially the form of Exhibit G (the
"Rule 144A and Related Matters Certificate") if the prospective transferee is a
QIB or (y) there shall be delivered to the Trustee an Opinion of Counsel
addressed to the Trustee that such Transfer may be made pursuant to an exemption
from the Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Seller, the Master Servicer or the Trustee. The Depositor shall
provide to any Holder of a Private Certificate and any prospective transferee
designated by any such Holder, information regarding the related

                                      -99-
<PAGE>

Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for Transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Trustee and the Master Servicer shall cooperate with the Depositor in providing
the Rule 144A information referenced in the preceding sentence, including
providing to the Depositor such information regarding the Certificates, the
Mortgage Loans and other matters regarding the Trust Fund as the Depositor shall
reasonably request to meet its obligation under the preceding sentence. Each
Holder of a Private Certificate desiring 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 shall be made unless
either (i) the Trustee and the Master Servicer shall have received a
representation from the transferee of such Certificate acceptable to and in form
and substance satisfactory to the Trustee and the Master Servicer, to the effect
that such transferee is not an employee benefit plan subject to Section 406 of
ERISA or a plan subject to Section 4975 of the Code, or a Person acting on
behalf of any such plan or using the assets of any such plan, or (ii) in the
case of any such ERISA Restricted Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or a plan subject to Section
4975 of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or any other person acting on behalf of any such plan,
the Trustee shall have received an Opinion of Counsel for the benefit of the
Trustee and the Master Servicer and on which they may relay, satisfactory to the
Trustee, to the effect that the purchase and holding of such ERISA Restricted
Certificate will not constitute or result in the assets of the Trust being
deemed to be "plan assets" under ERISA or the Code, will not result in any
prohibited transactions under ERISA or Section 4975 of the Code and will not
subject the Trustee, the Master Servicer or the Depositor to any obligation in
addition to those expressly undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Trustee, the Master Servicer or the
Depositor. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA Restricted Certificate to or on behalf of an employee
benefit plan subject to Section 406 of ERISA or a plan subject to Section 4975
of the Code without the delivery of the Opinion of Counsel as described above
shall be void and of no effect; provided that the restriction set forth in this
sentence shall not be applicable if there has been delivered to the Trustee an
Opinion of Counsel meeting the requirements of clause (ii) of the first sentence
of this paragraph. Neither the Trustee nor the Master Servicer shall be required
to monitor, determine or inquire as to compliance with the transfer restrictions
with respect to any ERISA Restricted Certificate that is a Book-Entry
Certificate, and neither the Trustee nor the Master Servicer shall have any
liability for transfers of any such Book- Entry Certificates made through the
book-entry facilities of any Depository or between or among participants of the
Depository or Certificate Owners made in violation of the transfer restrictions
set forth herein. Neither the Trustee nor the Master Servicer shall be under any
liability to any Person for any registration of transfer of any ERISA Restricted
Certificate that is in fact not permitted by this Section 6.02(b) or for making
any payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement. The
Trustee shall be entitled, but not obligated, to recover from any Holder of any
ERISA Restricted Certificate that was in fact an employee benefit plan subject
to Section 406 of ERISA or a plan subject to Section 4975 of the Code or a
Person acting on behalf of any such plan at the time it became a Holder or, at
such subsequent time as it became such a plan or Person acting on behalf of

                                     -100-
<PAGE>

such a plan, all payments made on such ERISA Restricted Certificate at and after
either such time. Any such payments so recovered by the Trustee shall be paid
and delivered by the Trustee to the last preceding Holder of such Certificate
that is not such a plan or Person acting on behalf of a plan.

         (c) Each beneficial owner of a Class M Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of that certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets", (ii) it has acquired and is holding such
certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by S&P, Fitch Ratings or Moody's, and the certificate is so
rated and in the case of the Class M-7 Certificates that the transferee 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 (iii) (1) it is
an insurance company, (2) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account," as
such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.

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

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

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

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

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Residual Certificate in violation of the provisions of
         this Section 6.02(c) shall be absolutely null and

                                     -101-
<PAGE>

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

                  (v) The Master Servicer shall make available within 60 days 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 Residual Certificate to any
         Holder who is not a Permitted Transferee.

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

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

         Section 6.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange

                                     -102-
<PAGE>

for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like Class, tenor and Percentage Interest. In connection with
the issuance of any new Certificate under this Section 6.03, the Trustee may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith. Any replacement
Certificate issued pursuant to this Section 6.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time. All Certificates surrendered to the Trustee under the terms of this
Section 6.03 shall be canceled and destroyed by the Trustee in accordance with
its standard procedures without liability on its part.

         Section 6.04 PERSONS DEEMED OWNERS.

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

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

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

         Section 6.06 BOOK-ENTRY CERTIFICATES.

         The Regular Certificates (other than the Class M-7, Class CE and Class
P Certificates), upon original issuance, shall be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates, to be
delivered to the Depository by or on behalf of the Depositor. Such Certificates
shall initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner of such Certificates will
receive a definitive certificate representing such Certificate Owner's interest
in such Certificates, except as provided in Section 6.08. Unless and until
definitive, fully registered Certificates ("Definitive Certificates") have been
issued to the Certificate Owners of such Certificates pursuant to Section 6.08:

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

                                     -103-
<PAGE>

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

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

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

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

         (f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and

         (g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.

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

         Section 6.07      NOTICES TO DEPOSITORY.

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

         Section 6.08      DEFINITIVE CERTIFICATES.

         If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor or the Depository advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Depositor is unable to locate a qualified successor or (b)
the Depositor, at its sole option, advises the Trustee that it elects to
terminate the book-entry system with respect to such Certificates through the
Depository, then the Trustee shall notify all Certificate Owners of such

                                     -104-
<PAGE>

Certificates, through the Depository, of the occurrence of any such event and of
the availability of Definitive Certificates to applicable Certificate Owners
requesting the same. The Depositor shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Trustee of any such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall countersign and deliver such Definitive
Certificates. Neither the Depositor nor the Trustee shall be liable for any
delay in delivery of such instructions and each may conclusively rely on, and
shall be protected in relying on, such instructions.

         In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its option
request a Definitive Certificate evidencing such Certificate Owner's Voting
Rights in the related Class of Certificates. In order to make such request, such
Certificate Owner shall, subject to the rules and procedures of the Depository,
provide the Depository or the related Depository Participant with directions for
the Trustee to exchange or cause the exchange of the Certificate Owner's
interest in such Class of Certificates for an equivalent Voting Right in fully
registered definitive form. Upon receipt by the Trustee of instructions from the
Depository directing the Trustee to effect such exchange (such instructions to
contain information regarding the Class of Certificates and the Certificate
Principal Balance being exchanged, the Depository Participant account to be
debited with the decrease, the registered holder of and delivery instructions
for the definitive Certificate, and any other information reasonably required by
the Trustee), (i) the Trustee shall instruct the Depository to reduce the
related Depository Participant's account by the aggregate Certificate Principal
Balance of the definitive Certificate, (ii) the Trustee shall execute,
authenticate and deliver, in accordance with the registration and delivery
instructions provided by the Depository, a definitive Certificate evidencing
such Certificate Owner's Voting Rights in such Class of Certificates and (iii)
the Trustee shall execute and authenticate a new Book-Entry Certificate
reflecting the reduction in the Certificate Principal Balance of such Class of
Certificates by the amount of the definitive Certificates.

         Section 6.09 MAINTENANCE OF OFFICE OR AGENCY.

         The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies at the Corporate Trust Office where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office, as the office 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.

                                   ARTICLE VII

                      THE DEPOSITOR AND THE MASTER SERVICER

         Section 7.01 LIABILITIES OF THE DEPOSITOR AND THE MASTER SERVICER. Each
of the Depositor, and the Master Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by it herein.

                                     -105-
<PAGE>

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

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

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

         Section 7.03 INDEMNIFICATION OF THE TRUSTEE AND THE MASTER SERVICER.

         (a) The Master Servicer agrees to indemnify the Indemnified Persons
for, and to hold them harmless against, any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or relating to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, including any powers of attorney delivered
pursuant to this Agreement, the Custodial Agreement or the Certificates (i)
related to the Master Servicer's failure to perform its duties in compliance
with this Agreement (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of
the Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided, in each case, that with respect to
any such claim or legal action (or pending or threatened claim or legal action),
the Trustee shall have given the Master Servicer and the Seller written notice
thereof promptly after the Trustee shall have with respect to such claim or
legal action knowledge thereof; provided, however that the failure to give such
notice shall not relieve the Master Servicer of its indemnification obligations
hereunder. This indemnity shall survive the resignation or removal of the
Trustee or Master Servicer and the termination of this Agreement.

         (b) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise paid or covered
pursuant to Subsection (a) above.

         Section 7.04 LIMITATIONS ON LIABILITY OF THE DEPOSITOR, THE MASTER
SERVICER AND OTHERS. Subject to the obligation of the Master Servicer to
indemnify the Indemnified Persons pursuant to Section 7.03:

         (a) Neither the Depositor, the Master Servicer nor any of the
directors, officers, employees or agents of the Depositor and the Master
Servicer shall be under any liability to the Indemnified Persons, the Trust Fund
or the Certificateholders for taking any action or for refraining from taking
any action in good faith pursuant to this Agreement, or for errors in judgment;
provided,

                                     -106-
<PAGE>

however, that this provision shall not protect the Depositor, the Master
Servicer or any such Person against any breach of warranties or representations
made herein or any liability which would otherwise be imposed by reason of such
Person's willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of obligations and duties
hereunder.

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

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

         (d) Neither the Depositor nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties under this Agreement and that in its opinion may
involve it in any expense or liability; provided, however, the Master Servicer
may in its discretion, with the consent of the Trustee (which consent shall not
be unreasonably withheld), 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 shall be expenses, costs and liabilities of the Trust Fund, and the
Master Servicer shall be entitled to be reimbursed therefor out of the Protected
Account as provided by Section 4.02. Nothing in this Subsection 7.04(d) shall
affect the Master Servicer's obligation to service and administer the Mortgage
Loans pursuant to Article III.

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

                                     -107-
<PAGE>

         Section 7.05 MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) with the prior consent of the Trustee
(which consents shall not be unreasonably witheld) or (ii) upon a determination
that any such duties hereunder are no longer permissible under applicable law
and such impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel,
addressed to and delivered to the Trustee. No such resignation by the Master
Servicer shall become effective until the Trustee or a successor to the Master
Servicer reasonably satisfactory to the Trustee shall have assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 8.02 hereof. The Trustee shall notify the Rating Agencies of the
resignation of the Master Servicer.

         Section 7.06 SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor Master Servicer or the assumption of the duties of
the Master Servicer, the Trustee may make such arrangements for the compensation
of such successor master servicer out of payments on the Mortgage Loans as the
Trustee and such successor master servicer shall agree. If the successor master
servicer does not agree that such market value is a fair price, such successor
master servicer shall obtain two quotations of market value from third parties
actively engaged in the servicing of single-family mortgage loans. In no event
shall the compensation of any successor master servicer exceed that permitted
the Master Servicer hereunder without the consent of all of the
Certificateholders.

         Section 7.07 SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement; provided, however,
that: (i) the purchaser or transferee accepting such assignment and delegation
(a) shall be a Person which shall be qualified to service mortgage loans for
Fannie Mae or Freddie Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; and (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer's Certificate and
an Opinion of Counsel addressed to the Trustee, each stating that all conditions
precedent to such action under this Agreement have been completed and such
action is permitted by and complies with the terms of this Agreement. No such
assignment or delegation shall affect any liability of the Master Servicer
arising prior to the effective date thereof.

                                     -108-
<PAGE>

                                  ARTICLE VIII

                     DEFAULT; TERMINATION OF MASTER SERVICER

         Section 8.01 EVENTS OF DEFAULT.

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

                  (i) any failure by the Master Servicer to remit to the Trustee
         any amounts received or collected by the Master Servicer in respect of
         the Mortgage Loans and required to be remitted by it hereunder (other
         than any Advance), which failure shall continue unremedied 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 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;

                  (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 breach
         of a representation or warranty by the Master Servicer, 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
         Master Servicer by the Trustee 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;

                  (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;

                  (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;

                  (vi) the Master Servicer assigns or delegates its duties or
         rights under this Agreement in contravention of the provisions
         permitting such assignment or delegation under Sections 7.05 or 7.07;
         or

                                     -109-
<PAGE>

                  (vii) The Master Servicer fails to deposit, or cause to be
         deposited, in the Distribution Account any Advance (other than a
         Nonrecoverable Advance) by 5:00 p.m. New York City time on the
         Distribution Account Deposit Date.

         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
may, and at the direction of the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates, the Trustee shall
in the case of any Event of Default described in clauses (i) through (vii)
above, 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, or any successor
appointed pursuant to Section 8.02 (a "Successor Master Servicer"). Such
Successor Master Servicer shall thereupon if such Successor Master Servicer is a
successor to the Master Servicer, make any Advance required by Article V,
subject, in the case of the Trustee, to Section 8.02. The Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the terminated
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 any 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 VII or Article IX. 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 applicable Successor Master Servicer of all cash amounts
which shall at the time be credited to the Protected Account maintained pursuant
to Section 4.02, or thereafter be received with respect to the applicable
Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of the
occurrence of an Event of Default known to the Trustee.

         Notwithstanding any termination of the activities of the Master
Servicer hereunder, the 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 the Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
the Master Servicer would have been entitled pursuant to Sections 4.02 and to
receive any other amounts payable to the Master Servicer hereunder the
entitlement to which arose prior to the termination of its activities hereunder.

         Notwithstanding the foregoing, if an Event of Default described in
clause (vii) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Advances and other advances of its
own funds, and the Trustee shall act as provided in Section 8.02 to carry out
the duties of the Master Servicer, including the obligation to make any Advance
the nonpayment of which was an Event of Default described in clause (vii) of
this Section 8.01. Any such action taken by the Trustee must be prior to the
distribution on the relevant Distribution Date.

                                     -110-
<PAGE>

         Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

         On and after the time the Master Servicer receives a notice of
termination pursuant to Section 8.01 hereof the Trustee shall automatically
become the successor to the Master Servicer with respect to the transactions set
forth or provided for herein and after a transition period (not to exceed 90
days), shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof; provided, however that, pursuant to Article V hereof, the Trustee in its
capacity as successor Master Servicer shall be responsible for making any
Advances required to be made by the Master Servicer immediately upon the
termination of the Master Servicer and any such Advance shall be made on the
Distribution Date on which such Advance was required to be made by the
predecessor Master Servicer. Effective on the date of such notice of
termination, as compensation therefor, the Trustee shall be entitled to all
compensation, reimbursement of expenses and indemnification that the Master
Servicer would have been entitled to if it had continued to act hereunder,
provided, however, that the Trustee shall not be (i) liable for any acts or
omissions of the Master Servicer, (ii) obligated to make Advances if it is
prohibited from doing so under applicable law, (iii) responsible for expenses of
the Master Servicer pursuant to Section 2.03 or (iv) obligated to deposit losses
on any Permitted Investment directed by the Master Servicer. Notwithstanding the
foregoing, the Trustee may, if it shall be unwilling to so act, or shall, if it
is prohibited by applicable law from making Advances pursuant to Article V or if
it is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any Successor Master Servicer
shall (i) be an institution that is a Fannie Mae and Freddie Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000,
(ii) be acceptable to the Trustee (which consent shall not be unreasonably
withheld) and (iii) be willing to act as successor servicer of any Mortgage
Loans under this Agreement, and shall have executed and delivered to the
Depositor, 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
any liabilities of the Master Servicer hereof incurred prior to termination of
the Master Servicer under Section 8.01 or as otherwise set forth herein), with
like effect as if originally named as a party to this Agreement, provided that
each Rating Agency shall have acknowledged in writing that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. If
the Trustee assumes the duties and responsibilities of the Master Servicer in
accordance with this Section 8.02, the Trustee shall not resign as Master
Servicer until a Successor Master 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 act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans or otherwise as
it and such successor shall agree; provided that no such compensation unless
agreed to by the Certificateholders 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 Master Servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay

                                     -111-
<PAGE>

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.

         The costs and expenses of the Trustee in connection with the
termination of the Master Servicer, appointment of a Successor Master Servicer
and, if applicable, any transfer of servicing, including, without limitation,
all costs and expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee or the Successor Master
Servicer to service the related Mortgage Loans properly and effectively, to the
extent not paid by the terminated Master Servicer, shall be payable to the
Trustee pursuant to Section 9.05. Any successor to the Master Servicer as
successor servicer under any Subservicing Agreement shall give notice to the
applicable Mortgagors of such change of servicer and shall, during the term of
its service as successor servicer maintain in force the policy or policies that
the Master Servicer is required to maintain pursuant to Section 3.08.

         Section 8.03 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 actually known to a Responsible Officer of the
Trustee, unless such Event of Default shall have been cured or waived.

         Section 8.04 WAIVER OF DEFAULTS.

                  The Trustee shall transmit by mail to all Certificateholders,
within 60 days after the occurrence of any Event of Default actually known to a
Responsible Officer of the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing not less than 51% of the Voting Rights may,
on behalf of all Certificateholders, waive any default by the Master Servicer in
the performance of its obligations hereunder and the consequences thereof,
except a default in the making of or the causing to be made of any required
distribution on the Certificates. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.

                                     -112-
<PAGE>

                                   ARTICLE IX

                             CONCERNING THE TRUSTEE

         Section 9.01 DUTIES OF TRUSTEE.

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

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

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

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

                  (i) Prior to the occurrence of an Event of Default, and after
         the curing or waiver of all such Events of Default which 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 except for the performance of their respective duties and
         obligations as are specifically set forth in this Agreement, no implied
         covenants or obligations shall be read into this Agreement against the
         Trustee and, in the absence of bad faith on the part of the Trustee,
         the Trustee may conclusively rely, as to the truth of the statements
         and the correctness of the opinions expressed therein, upon any
         certificates or opinions furnished to the Trustee and conforming to the
         requirements of this Agreement;

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

                                     -113-
<PAGE>

                  (iii) The Trustee shall not be liable with respect to any
         action taken, suffered or omitted to be taken by it in good faith in
         accordance with the directions of the Holders of Certificates
         evidencing not less than 25% of the aggregate Voting Rights of the
         Certificates (or such other percentage as specifically set forth
         herein), if such action or non-action relates to the time, method and
         place of conducting any proceeding for any remedy available to the
         Trustee or exercising any trust or other power conferred upon the
         Trustee under this Agreement;

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

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

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

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

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

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

         Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.

         (a) Except as otherwise provided in Section 10.01:

                  (i) The Trustee may rely and shall be protected in acting or
         refraining from acting in reliance on any resolution or certificate of
         the Seller or the Master Servicer, any certificates of auditors or any
         other certificate, statement, instrument, opinion, report, notice,

                                     -114-
<PAGE>

         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 advice of
         such counsel or any Opinion of Counsel shall be full and complete
         authorization and protection with respect to any action taken or
         suffered or omitted by it hereunder in good faith and in accordance
         with such advice or Opinion of Counsel;

                  (iii) The Trustee shall not be under any obligation to
         exercise any of the trusts or powers vested in it by this Agreement,
         other than its obligation to give notices pursuant to this Agreement,
         or to institute, conduct or defend any litigation hereunder or in
         relation hereto at the request, order or direction of any of the
         Certificateholders pursuant to the provisions of this Agreement, unless
         such Certificateholders shall have offered to the Trustee reasonable
         security or indemnity 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
         an Event of Default of which a Responsible Officer of the Trustee has
         actual knowledge (which has not been cured or waived), to exercise such
         of the rights and powers vested in it by this Agreement, and to use the
         same degree of care and skill in their exercise, as a prudent person
         would exercise under the circumstances in the conduct of his own
         affairs;

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

                  (v) The Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, consent,
         order, approval, bond or other paper or document, unless requested in
         writing to do so by Holders of Certificates evidencing not less than
         25% of the aggregate Voting Rights of the Certificates and provided
         that the payment within a reasonable time to the Trustee of the costs,
         expenses or liabilities likely to be incurred by it in the making of
         such investigation is, in the opinion of the Trustee reasonably assured
         to the Trustee by the security afforded to it by the terms of this
         Agreement. The Trustee may require reasonable indemnity against such
         expense or liability as a condition to taking any such action. The
         reasonable expense of every such examination shall be paid by the
         Certificateholders requesting the investigation;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or through
         Affiliates, agents or attorneys; provided, however, that the Trustee
         may not appoint any paying agent to perform any paying agent functions
         under this Agreement without the express written consent of the Master
         Servicer, which consents will not be unreasonably withheld. The Trustee
         shall not be liable or responsible for the misconduct or negligence of
         any of the Trustee's agents or attorneys or paying agent appointed
         hereunder by the Trustee with due care and, when required, with the
         consent of the Master Servicer;

                                     -115-
<PAGE>

                  (vii) Should the Trustee deem the nature of any action
         required on its part to be unclear, the Trustee may require prior to
         such action that it be provided by the Depositor with reasonable
         further instructions; the right of the Trustee to perform any
         discretionary act enumerated in this Agreement shall not be construed
         as a duty, and the Trustee shall not be accountable for other than its
         negligence or willful misconduct in the performance of any such act;

                  (viii) The Trustee shall not be required to give any bond or
         surety with respect to the execution of the trust created hereby or the
         powers granted hereunder, except as provided in Subsection 9.07; and

                  (ix) The Trustee shall not have any duty to conduct any
         affirmative investigation as to the occurrence of any condition
         requiring the repurchase of any Mortgage Loan by any Person pursuant to
         this Agreement, or the eligibility of any Mortgage Loan for purposes of
         this Agreement.

         (b) The Trustee is hereby directed by the Depositor to execute and
deliver the Yield Maintenance Agreements.

         Section 9.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.

         The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Depositor, and the Trustee shall not have any
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of the Certificates (other than the signature and
countersignature of the Trustee on the Certificates) or of any Mortgage Loan
except as expressly provided in Sections 2.02 and 2.06 hereof; provided,
however, that the foregoing shall not relieve the Trustee, or the Custodian on
its behalf, of the obligation to review the Mortgage Files pursuant to Section
2.02 of this Agreement. The Trustee's signature and countersignature (or
countersignature of its agent) on the Certificates shall be solely in its
capacity as Trustee and shall not constitute the Certificates an obligation of
the Trustee in any other capacity. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor with respect to the Mortgage Loans. Subject to Section 2.06,
the Trustee shall not be responsible for the legality or validity of this
Agreement or any document or instrument relating to this Agreement, the validity
of the execution of this Agreement or of any supplement hereto or instrument of
further assurance, or the validity, priority, perfection or sufficiency of the
security for the Certificates issued hereunder or intended to be issued
hereunder. The Trustee shall not at any time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage or any Mortgage Loan, or the perfection and priority of any
Mortgage or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Trust Fund or its ability to generate the
payments to be distributed to Certificateholders, under this Agreement. The
Trustee shall not be responsible for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder or to
record this Agreement.

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         Section 9.04 TRUSTEE MAY OWN CERTIFICATES.

         The Trustee in its individual capacity or in any capacity other than as
Trustee hereunder may become the owner or pledgee of any Certificates with the
same rights it would have if it were not the Trustee and may otherwise deal with
the parties hereto.

         Section 9.05 TRUSTEE'S FEES AND EXPENSES.

         The Trustee will be entitled to recover from the Distribution Account
pursuant to Section 4.05, the Trustee Fee, all reasonable out-of-pocket
expenses, disbursements and advances and the expenses of the Trustee in
connection with any Event of Default (or anything related thereto, including any
determination that an Event of Default does or does not exist), any breach of
this Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee in the administration of
the trusts hereunder (including the reasonable compensation, expenses and
disbursements of its counsel) except any such expense, disbursement or advance
as may arise from its negligence or intentional misconduct or which is the
responsibility of the Certificateholders hereunder. If funds in the Distribution
Account are insufficient therefor, the Trustee shall recover such expenses,
disbursements or advances from the Depositor and the Depositor hereby agrees to
pay such expenses, disbursements or advances. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.

         Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.

         The Trustee and any successor Trustee shall during the entire duration
of this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus and undivided profits of at least
$50,000,000, subject to supervision or examination by federal or state authority
and rated "BBB" or higher by Fitch with respect to their long-term rating and
rated "BBB" or higher by Standard & Poor's and "Baa2" or higher by Moody's with
respect to any outstanding long-term unsecured unsubordinated debt, and, in the
case of a successor Trustee other than pursuant to Section 9.10, rated in one of
the two highest long-term debt categories of, or otherwise acceptable to, each
of the Rating Agencies (which consent shall not be unreasonably withheld). The
Trustee shall not be an Affiliate of the Master Servicer. If the Trustee
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 9.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 9.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 9.08.

                                     -117-
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         Section 9.07 INSURANCE.

         The Trustee, at its own expense, shall at all times maintain and keep
in full force and effect: (i) fidelity insurance, (ii) theft of documents
insurance and (iii) forgery insurance (which may be collectively satisfied by a
"Financial Institution Bond" and/or a "Bankers' Blanket Bond"); provided, that
such insurance may be provided through self-insurance so long as the Trustee is
rated "A" or better by S&P and "A1" or better by Moody's. All such insurance
shall be in amounts, with standard coverage and subject to deductibles, as are
customary for insurance typically maintained by banks or their affiliates which
act as custodians for investor-owned mortgage pools. A certificate of an officer
of the Trustee as to the Trustee's compliance with this Section 9.07 shall be
furnished to any Certificateholder upon reasonable written request.

         Section 9.08 RESIGNATION AND REMOVAL OF TRUSTEE.

         The Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Depositor, the Seller and
the Master Servicer, with a copy to the Rating Agencies. Upon receiving such
notice of resignation, the Depositor shall promptly appoint a successor trustee
by written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee and the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, 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 9.06 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in multiple copies, a copy of which instrument shall be delivered to
the Trustee, the Master Servicer and the successor trustee.

         The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in multiple copies, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor trustee to the Master Servicer,
the Trustee so removed and the successor trustee so appointed. Notice of any
removal of the Trustee shall be given to each Rating Agency by the Trustee or
successor trustee.

         Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.09 hereof.

                                     -118-
<PAGE>

         Section 9.09 SUCCESSOR TRUSTEE.

         Any successor trustee appointed as provided in Section 9.08 hereof
shall execute, acknowledge and deliver to the Depositor, to 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 9.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 9.07 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 9.09, the successor trustee shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates. If the successor trustee
fails to mail such notice within ten days after acceptance of appointment, the
Depositor shall cause such notice to be mailed at the expense of the Trust Fund.

         Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE.

         Any corporation, state bank or national banking association into which
the Trustee may be merged or converted or with which it may be consolidated or
any corporation, state bank or national banking association resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation, state bank or national banking association succeeding to
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 9.06 hereof without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

         Section 9.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the 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 9.11, 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 9.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 9.09.

                                     -119-
<PAGE>

         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 a Trustee hereunder
         or as a Successor 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 IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of 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 9.12 TAX MATTERS.

         It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
qualifies as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of the Trust Fund. The Trustee, as
agent on behalf of the Trust

                                     -120-
<PAGE>

Fund, shall do or refrain from doing, as applicable, the following: (a) the
Trustee shall prepare and file, or cause to be prepared and filed, in a timely
manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns (Form
1066 or any successor form adopted by the Internal Revenue Service) and prepare
and file or cause to be prepared and filed with the Internal Revenue Service and
applicable state or local tax authorities income tax or information returns for
each taxable year with respect to each such REMIC containing such information
and at the times and in the manner as may be required by the Code or state or
local tax laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) the Trustee shall apply for an
employer identification number with the Internal Revenue Service via a Form SS-4
or other comparable method for each REMIC that is or becomes a taxable entity,
and within thirty days of the Closing Date, furnish or cause to be furnished to
the Internal Revenue Service, on Forms 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code
for the Trust Fund; (c) the Trustee shall make or cause to be made elections, on
behalf of each REMIC formed hereunder to be treated as a REMIC on the federal
tax return of such REMIC for its first taxable year (and, if necessary, under
applicable state law); (d) the Trustee shall prepare and forward, or cause to be
prepared and forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information returns and
reports as and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) the Trustee shall provide
information necessary for the computation of tax imposed on the transfer of a
Residual Certificate to a Person that is not a Permitted Transferee, or an agent
(including a broker, nominee or other middleman) of a Person that is not a
Permitted Transferee, or a pass-through entity in which a Person that is not a
Permitted Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) the Trustee shall, to the extent under its control, conduct
the affairs of the Trust Fund at all times that any Certificates are outstanding
so as to maintain the status of each REMIC formed hereunder as a REMIC under the
REMIC Provisions; (g) the Trustee shall not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of any REMIC formed hereunder; (h) the Trustee shall pay, from the
sources specified in the penultimate paragraph of this Section 9.12, the amount
of any federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on any REMIC formed hereunder prior to the termination
of the Trust Fund when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings); (i) the Trustee shall maintain records relating to
each REMIC formed hereunder including but not limited to the income, expenses,
assets and liabilities of each such REMIC and adjusted basis of the Trust Fund
property determined at such intervals as may be required by the Code, as may be
necessary to prepare the foregoing returns, schedules, statements or
information; (j) the Trustee shall, for federal income tax purposes, maintain
books and records with respect to the REMICs on a calendar year and on an
accrual basis; (k) the Trustee shall not enter into any arrangement not
otherwise provided for in this Agreement by which the REMICs will receive a fee
or other compensation for services nor permit the REMICs to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the

                                     -121-
<PAGE>

Code or "permitted investments" as defined in Section 860G(a)(5) of the Code;
and (l) as and when necessary and appropriate, the Trustee, at the expense of
the Trust Fund, shall represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
REMIC formed hereunder, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any tax item of the
Trust Fund, and otherwise act on behalf of each REMIC formed hereunder in
relation to any tax matter involving any such REMIC.

         In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.

         In the event that any tax is imposed on "prohibited transactions" of
any of REMIC I, REMIC II, REMIC III or REMIC IV as defined in Section 860F(a)(2)
of the Code, on the "net income from foreclosure property" of the Trust Fund as
defined in Section 860G(c) of the Code, on any contribution to any of REMIC I,
REMIC II, REMIC III or REMIC IV 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 any of REMIC I,
REMIC II, REMIC III or REMIC IV, and is not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) any party hereto (other than the Trustee) to the extent any
such other tax arises out of or results from a breach by such other party of any
of its obligations under this Agreement or (iii) in all other cases, or in the
event that any liable party hereto fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid first with amounts
otherwise to be distributed to the Class R Certificateholders, and second with
amounts otherwise to be distributed to all other Certificateholders in the
following order of priority: first, to the Class M-7 Certificates, second, to
the Class M-6 Certificates, third, to the Class M-5 Certificates, fourth, to the
Class M-4 Certificates, fifth, to the Class M-3 Certificates, sixth, to the
Class M-2 Certificates, seventh, to the Class M-1 Certificates and eighth, to
the Class A Certificates (pro rata based on the amounts to be distributed).
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Holder of any Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holders of the Class R
Certificates (and, if necessary, second, from the Holders of the other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
The Trustee shall promptly notify in writing the party liable for any such tax
of the amount thereof and the due date for the payment thereof.

                                     -122-
<PAGE>

         The Trustee agrees that, in the event it should obtain any information
necessary for the other party to perform its obligations pursuant to this
Section 9.12, it will promptly notify and provide such information to such other
party.

                                    ARTICLE X

                                   TERMINATION

         Section 10.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL
MORTGAGE LOANS.

         Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Seller and the Trustee created hereby with
respect to the Trust Fund 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 a price (the "Mortgage Loan Purchase Price")
equal to the sum of (i) 100% of the Stated Principal Balance of each Mortgage
Loan (other than in respect of REO Property), (ii) accrued interest thereon at
the applicable Mortgage Rate to, but not including, the first day of the month
of such purchase, (iii) the appraised value of any REO Property in the Trust
Fund (up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Master
Servicer and the Trustee, (iv) unreimbursed out-of pocket costs of the Master
Servicer, including unreimbursed servicing advances and the principal portion of
any unreimbursed Advances, made on the Mortgage Loans prior to the exercise of
such repurchase right and (v) any unreimbursed costs and expenses of the Trustee
payable pursuant to Section 9.05 and (b) the later of (i) the maturity or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all REO Property and (ii) the
distribution to Certificateholders of all amounts required to be distributed to
them pursuant to this Agreement, as applicable. In no event shall the trusts
created hereby continue beyond the earlier of (i) the expiration of 21 years
from the death of the last survivor of the descendants of Joseph P. Kennedy, the
late Ambassador of the United States to the Court of St. James, living on the
date hereof and (ii) the Latest Possible Maturity Date.

         The right to repurchase all Mortgage Loans and REO Properties pursuant
to clause in the preceding paragraph shall be conditioned upon the Stated
Principal Balance of all of the Mortgage Loans in the Trust Fund, at the time of
any such repurchase, aggregating 10% or less of the aggregate Cut- off Date
Principal Balance of all of the Mortgage Loans.

         Section 10.02 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 Protected 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 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.

                                     -123-
<PAGE>

If the Master Servicer elects to terminate the Trust Fund pursuant to Section
10.01, at least 20 days prior to the date notice is to be mailed to the
Certificateholders, the Master Servicer shall notify the Depositor and the
Trustee of the date the Master Servicer intends to terminate the Trust Fund. The
Master Servicer shall remit the Mortgage Loan Purchase Price to the Trustee on
the Business Day prior to the Distribution Date for such Optional Termination by
the Master Servicer.

         Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not later than two
Business Days after the Determination Date in the month of such final
distribution. Any such notice shall specify (a) the Distribution Date upon which
final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Trustee will give such notice to each Rating Agency at the time
such notice is given to Certificateholders.

         In the event such notice is given, the Master Servicer shall cause all
funds in the Protected 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
Certificates. Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for Release therefor, the Trustee or the
Custodian shall promptly release to EMC as applicable the Mortgage Files for the
Mortgage Loans and the Trustee shall execute and deliver any documents prepared
and delivered to it which are necessary to transfer any REO Property.

         Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Distribution Account in the order and
priority set forth in Section 5.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.

         In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
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 Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto.

                                     -124-
<PAGE>

         Section 10.03 ADDITIONAL TERMINATION REQUIREMENTS.

         (a) Upon exercise by the Master Servicer of its purchase option as
provided in Section 10.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee have been supplied
with an Opinion of Counsel addressed to the Trustee, at the expense of the
Master Servicer, to the effect that the failure of the Trust Fund to comply with
the requirements of this Section 10.03 will not (i) result in the imposition of
taxes on "prohibited transactions" of a REMIC, or (ii) cause a REMIC 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, and the Trustee shall in turn specify the first day
of such period in a statement attached to the tax return for each of REMIC I,
REMIC II, REMIC III and REMIC IV pursuant to Treasury Regulation Section
1.860F-1. The Master Servicer shall satisfy all the requirements of a qualified
liquidation under Section 860F of the Code and any regulations thereunder, as
evidenced by an Opinion of Counsel obtained at the expense of the 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 Trustee shall sell all of
the assets of REMIC I, REMIC II, REMIC III and REMIC IV for cash; and

         (3) At the time of the making of the final payment on the Certificates,
the Trustee shall distribute or credit, or cause to be distributed or credited,
to the Holders of the Residual Certificates all cash on hand (other than cash
retained to meet claims), and REMIC I shall terminate at that time.

         (b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the adoption of a 90-day liquidation period for REMIC I, REMIC II,
REMIC III and REMIC IV, which authorization shall be binding upon all successor
Certificateholders.

         (c) The Trustee as agent for each REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Master
Servicer, and the receipt of the Opinion of Counsel referred to in Section
10.03(a)(1) and to take such other action in connection therewith as may be
reasonably requested by the Master Servicer.

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

         Section 11.01 AMENDMENT.

         This Agreement may be amended from time to time by parties hereto
without the consent of any of the Certificateholders to cure any ambiguity, to
correct or supplement any provisions herein (including to give effect to the
expectations of investors), to change the manner in which the Protected Account
is maintained or to make such other provisions with respect to matters or
questions arising under this Agreement as shall not be inconsistent with any
other provisions herein if such action shall not, as evidenced by an Opinion of
Counsel addressed to the Trustee, adversely

                                     -125-
<PAGE>

affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates.

         Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of each of REMIC I, REMIC II, REMIC III and REMIC IV as a REMIC under the Code
or to avoid or minimize the risk of the imposition of any tax on any of REMIC I,
REMIC II, REMIC III or REMIC IV pursuant to the Code that would be a claim
against either REMIC I, REMIC II, REMIC III or REMIC IV at any time prior to the
final redemption of the Certificates, provided that the Trustee has been
provided an Opinion of Counsel addressed to the Trustee, which opinion shall be
an expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Trust Fund, to the effect that such action is
necessary or appropriate to maintain such qualification or to avoid or minimize
the risk of the imposition of such a tax.

         This Agreement may also be amended from time to time by the parties
hereto with the consent of the Holders of each Class of Certificates affected
thereby evidencing over 50% of the Voting Rights of such Class or Classes for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the Holders of Certificates; provided that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) cause either REMIC I, REMIC II, REMIC III or REMIC IV to cease
to qualify as a REMIC or (iii) reduce the aforesaid percentages of Certificates
of each Class the Holders of which are required to consent to any such amendment
without the consent of the Holders of all Certificates of such Class then
outstanding.

                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel addressed to the Trustee, which
opinion shall be an expense of the party requesting such amendment but in any
case shall not be an expense of the Trustee, to the effect that such amendment
will not (other than an amendment pursuant to clause (ii) of, and in accordance
with, the preceding paragraph) cause the imposition of any tax on REMIC I, REMIC
II, REMIC III or REMIC IV or the Certificateholders or cause REMIC I, REMIC II,
REMIC III or REMIC IV to cease to qualify as a REMIC at any time that any
Certificates are outstanding. Further, nothing in this Agreement shall require
the Trustee to enter into an amendment without receiving an Opinion of Counsel,
satisfactory to the Trustee that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement (including any consent of the applicable Certificateholders) have been
complied with.

         Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.

                                     -126-
<PAGE>

         It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

         Section 11.02 RECORDATION OF AGREEMENT; COUNTERPARTS.

         To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The Master Servicer shall effect such recordation at the
Trust's expense upon the request in writing of a Certificateholder, but only if
such direction is accompanied by an Opinion of Counsel (provided at the expense
of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

         Section 11.03 GOVERNING LAW.

         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS).

         Section 11.04 INTENTION OF PARTIES.

         It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the Seller
to the Depositor, and by the Depositor to the Trustee be, and be construed as,
an absolute sale thereof to the Depositor or the Trustee, as applicable. It is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Seller to the Depositor, or by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Seller or the Depositor, as
applicable, or if for any other reason the Mortgage Loan Purchase Agreement or
this Agreement is held or deemed to create a security interest in such assets,
then (i) the Mortgage Loan Purchase Agreement and this Agreement shall each be
deemed to be a security agreement within the meaning of the Uniform Commercial

                                     -127-
<PAGE>

Code of the State of New York and (ii) the conveyance provided for in the
Mortgage Loan Purchase Agreement from the Seller to the Depositor, and the
conveyance provided for in this Agreement from the Depositor to the Trustee,
shall be deemed to be an assignment and a grant by the Seller or the Depositor,
as applicable, for the benefit of the Certificateholders, of a security interest
in all of the assets that constitute the Trust Fund, whether now owned or
hereafter acquired.

         The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement.

         Section 11.05 NOTICES.

         (a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which a
Responsible Officer of the Trustee 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, 3.18 and 10.01; and

                  (v) The final payment to Certificateholders.

         (b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered at or mailed by
registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, or by facsimile transmission to a number provided by the
appropriate party if receipt of such transmission is confirmed to (i) in the
case of the Depositor, Bear Stearns Asset Backed Securities I LLC, 383 Madison
Avenue, New York, New York 10179, Attention: Chief Counsel; (ii) in the case of
the Seller or the Master Servicer, EMC Mortgage Corporation, 909 Hidden Ridge
Drive, Irving, Texas 75038, Attention: Ralene Ruyle or such other address as may
be hereafter furnished to the other parties hereto by the Master Servicer in
writing; (iv) in the case of the Trustee, at each Corporate Trust Office or such
other address as the Trustee may hereafter furnish to the other parties hereto;
and (v) in the case of the Rating Agencies, (x) Moody's Investors Service, Inc.,
99 Church Street, New York, New York 10007, Attention: Home Equity Monitoring
and (y) Standard & Poor's, 55 Water Street, 41st Floor, New York, New York
10041, Attention: Mortgage Surveillance Group. Any notice delivered to the
Seller, the Master Servicer, the Trustee under this Agreement shall be effective
only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate

                                     -128-
<PAGE>

Register; any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.

         Section 11.06 SEVERABILITY OF PROVISIONS.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         Section 11.07 ASSIGNMENT.

         Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 7.02, this Agreement may not be assigned by the
Master Servicer, the Seller or the Depositor.

         Section 11.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

         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

                                     -129-
<PAGE>

or preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section 11.08, each and every Certificateholder or the Trustee shall be
entitled to such relief as can be given either at law or in equity.

         Section 11.09 INSPECTION AND AUDIT RIGHTS. The Master Servicer agrees
that, on reasonable prior notice, it will permit any representative of the
Depositor, 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 Trustee and to discuss its affairs,
finances and accounts relating to such 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 Trustee of any right under this Section 11.09
shall be borne by the party requesting such inspection, subject to such party's
right to reimbursement hereunder (in the case of the Trustee, pursuant to
Section 9.05 hereof).

         Section 11.10 CERTIFICATES NONASSESSABLE AND FULLY PAID.

         It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

                                      * * *

                                     -130-
<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.

                                         BEAR STEARNS ASSET BACKED SECURITIES
                                         I LLC,
                                                  as Depositor

                                         By: /s/ Joseph T. Jurkowski, Jr.
                                            -----------------------------------
                                         Name:   Joseph T. Jurkowski, Jr.
                                         Title:  Vice President

                                         EMC MORTGAGE CORPORATION,
                                                  as Seller and Master Servicer

                                         By: /s/ Sue Stepanek
                                            -----------------------------------
                                         Name:   Sue Stepanek
                                         Title:  Executive Vice President

                                         LASALLE BANK NATIONAL ASSOCIATION
                                                  as Trustee

                                         By: /s/ Christopher Lewis
                                            -----------------------------------
                                         Name:   Christopher Lewis
                                         Title:  Assistant Vice President

                                     -131-
<PAGE>

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

         On this 30th day of June, 2004, before me, a notary public in and for
said State, appeared Joseph T. Jurkowski, Jr., personally known to me on the
basis of satisfactory evidence to be an authorized representative of Bear
Stearns Asset Backed Securities I LLC, one of the companies that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such limited liability company and acknowledged to me that such
limited liability company 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]

                                     -132-
<PAGE>

STATE OF TEXAS                      )
                                    ) ss.:
COUNTY OF DALLAS                    )

         On this 30th day of June, 2004, before me, a notary public in and for
said State, appeared Sue Stepanek, personally known to me on the basis of
satisfactory evidence to be an authorized representative of EMC Mortgage
Corporation, one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation
and acknowledged to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                        ________________________
                                                             Notary Public

[Notarial Seal]

                                     -133-
<PAGE>

STATE OF ILLINOIS                           )
                                    ) ss.:
COUNTY OF COOK                      )

         On this 30th day of June, 2004, before me, a notary public in and for
said State, appeared Christopher Lewis, personally known to me on the basis of
satisfactory evidence to be an authorized representative of LaSalle Bank
National Association that executed the within instrument, and also known to me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                        ________________________
                                                             Notary Public

[Notarial Seal]

                                     -134-

<PAGE>

                                                                     EXHIBIT A-1

                          Form of Class A 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").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  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.

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No. 1                                          Variable Pass-Through Rate

Class [I-A-1][I-A-2][II-A][III-A] Senior

Date of Pooling and Servicing Agreement                    Aggregate Initial Certificate  Principal Balance of this
and Cut-off Date:                                          Certificate as of the Cut-off Date:
June 1, 2004                                               $[_____]

First Distribution Date:                                   Initial   Certificate    Principal   Balance   of   this
July 26, 2004                                              Certificate as of the Cut-off Date:
                                                           $[_____]

Master Servicer:                                           CUSIP: [_____]
EMC Mortgage Corporation
</TABLE>

                                     A-1-1
<PAGE>

Last Scheduled Distribution Date:
[______, ___]

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-HE5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class [I-A-1][I-A-2][II-A][III-A] Certificates with
         respect to a Trust Fund consisting primarily of a pool of conventional,
         closed-end one- to four-family first and second lien, fixed and
         adjustable interest rate mortgage loans sold by BEAR STEARNS ASSET
         BACKED SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional, closed-end first and second lien, fixed
and adjustable rate mortgage loans secured by one- to four- family residences
(collectively, the "Mortgage Loans") sold by Bear Stearns Asset Backed
Securities I LLC ("BSABS I"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to BSABS I. EMC will act as master servicer of the Mortgage
Loans (the "Master Servicer," which term includes any successors thereto under
the Agreement referred to below). The Trust Fund was created pursuant to the
Pooling and Servicing Agreement, dated as of the Cut-off Date specified above
(the "Agreement"), among BSABS I, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and Master Servicer and LaSalle Bank 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, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.

                  Interest on this Certificate will accrue from and including
the immediately preceding Distribution Date (or with respect to the First
Distribution Date, the Closing Date) to and including the day prior to the
current Distribution Date on the Certificate Principal Balance hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day immediately preceding such Distribution Date so long as such
Certificate remains in book-entry form (and otherwise, the close of business on
the last

                                     A-1-2
<PAGE>

Business Day of the month immediately preceding the month of such Distribution
Date), an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any realized losses applicable
hereto.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of each Class of Certificates affected thereby evidencing over 50% of
the Voting Rights of such Class or Classes. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                                     A-1-3
<PAGE>

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the expiration of 21 years after the death of certain persons identified
in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-1-4
<PAGE>

                 IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _____________, ____                  LASALLE BANK NATIONAL ASSOCIATION
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:_______________________________
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class [I-A-1][I-A-2][II-A][III-A]
Certificates referred to in the within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION
                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:_________________________________
                                                     Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                        __________________________________________________
                                    Signature by or on behalf of assignor

                                      __________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                                                     EXHIBIT A-2

               Form of Class M-[1][2][3][4][5][6][7] Certificates

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR 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]
AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES APPLICABLE
THERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  [For Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6] EACH BENEFICIAL OWNER OF A CERTIFICATE OR ANY INTEREST THEREIN SHALL
BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THAT
CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A PLAN OR INVESTING
WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"),
AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF
THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY S&P, FITCH RATINGS OR
MOODY'S, AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE
COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH TERM IS
DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND (3) THE
CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.

                  [For Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6] [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE

                                     A-2-1
<PAGE>

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.]

                  [For Class M-7] [THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION.]

                  [For Class M-7] [EACH BENEFICIAL OWNER OF A CERTIFICATE OR ANY
INTEREST THEREIN SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS
ACQUISITION OR HOLDING OF THAT CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I)
IT IS NOT A PLAN OR INVESTING WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS
HOLDING SUCH CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 2002-41
AS AMENDED ("EXEMPTION"), THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS
TO THE AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE
RATED, AT THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY
S&P, FITCH RATINGS OR MOODY'S , AND THE CERTIFICATE IS SO RATED AND THAT IT IS

                                     A-2-2
<PAGE>

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 (III)
(1) IT IS AN INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD
THE CERTIFICATE OR INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT,"
AS SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
95-60, AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN
SATISFIED.]

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No.1                                           Variable Pass-Through Rate

Class M-[1][2][3][4][5][6][7] Subordinate

Date of Pooling and Servicing Agreement and                Aggregate Initial Certificate  Principal Balance of this
Cut-off Date:                                              Certificate as of the Cut-off Date:
June 1, 2004                                               $[__________]

First Distribution Date:                                   Initial   Certificate    Principal   Balance   of   this
July 26, 2004                                              Certificate as of the Cut-off Date:
                                                           $[__________]

Master Servicer:                                           CUSIP:  [_____]
EMC Mortgage Corporation

Last Scheduled Distribution Date:
July 25, 2034
</TABLE>

                                     A-2-3
<PAGE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-HE5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class M-[1][2][3][4][5][6][7] Certificates with
         respect to a Trust Fund consisting primarily of a pool of conventional,
         closed-end one- to four-family first and second lien, fixed and
         adjustable interest rate mortgage loans sold by BEAR STEARNS ASSET
         BACKED SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that _________________ is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership interest
of Certificates of the same Class as this Certificate in a trust (the "Trust
Fund") generally consisting of conventional, closed-end first and second lien,
fixed and adjustable rate mortgage loans secured by one- to four- family
residences (collectively, the "Mortgage Loans") sold by Bear Stearns Asset
Backed Securities I LLC ("BSABS I"). The Mortgage Loans were sold by EMC
Mortgage Corporation ("EMC") to BSABS I. EMC will act as master servicer of the
Mortgage Loans (in that capacity, the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement, dated as of the Cut-off
Date specified above (the "Agreement"), among BSABS I, as depositor (the
"Depositor"), EMC Mortgage Corporation as seller and Master Servicer and LaSalle
Bank 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, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.

                  [For Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6] [Interest on this Certificate will accrue from and including the
immediately preceding Distribution Date (or with respect to the First
Distribution Date, the Closing Date) to and including the day prior to the
current Distribution Date on the Certificate Principal Balance hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day immediately preceding such Distribution Date so long as such
Certificate remains in book-entry form (and otherwise, the close of business on
the last Business Day of the month immediately preceding the month of such
Distribution Date), an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the

                                     A-2-4
<PAGE>

amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate.]

                  [For Class M-7] [Interest on this Certificate will accrue from
and including the immediately preceding Distribution Date (or with respect to
the First Distribution Date, the Closing Date) to and including the day prior to
the current Distribution Date on the Certificate Principal Balance hereof at a
per annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month of such Distribution
date so long as this Certificate remains in non-book entry form (and otherwise,
the close of business on the Business Day immediately preceding such
Distribution Date) an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate.]

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto and any realized losses applicable hereto.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of

                                     A-2-5
<PAGE>

any Certificate issued upon the transfer hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  [For Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6][Each beneficial owner of a Certificate or any interest therein shall
be deemed to have represented, by virtue of its acquisition or holding of that
certificate or interest therein, that either (i) it is not a Plan or investing
with "Plan Assets," (ii) it has acquired and is holding such certificate in
reliance on the Exemption, and that it understands that there are certain
conditions to the availability of the Exemption, including that the certificate
must be rated, at the time of purchase, not lower than "BBB-" (or its
equivalent) by S&P, Fitch Ratings or Moody's, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.]

                  [For Class M-7][No transfer of this Class M-7 Certificate will
be made unless such transfer is (i) exempt from the registration requirements of
the Securities Act of 1933, as amended, and any applicable state securities laws
or is made in accordance with said Act and laws and (ii) made in accordance with
Section 6.02 of the Agreement. In the event that such transfer is to be made the
Trustee shall register such transfer if, prior to such transfer, (i) the
transferor has delivered to the Trustee the Transferor Certificate (as defined
in the Agreement) and (ii) such transfer is made to a transferee (A) who has
provided the Trustee with evidence as to its QIB status by delivery of the Rule
144A and related Matters Certificate or (B) which is an Institutional Accredited
Investor and has delivered to the Trustee an Investment Letter; provided that if
based upon an Opinion of Counsel to the effect that (i) and (ii) above are not
sufficient to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act and other applicable laws, the Trustee shall as a condition of
the registration of any such transfer require the transferor to furnish such
other certifications, legal opinions or other information prior to registering
the transfer of this Certificate as shall be set forth in such Opinion of
Counsel.]

                  [For Class M-7] [Each beneficial owner of a Certificate or any
interest therein shall be deemed to have represented, by virtue of its
acquisition or holding of that certificate or interest therein, that either (i)
it is not a Plan or investing with "Plan Assets", (ii) it has acquired and is
holding such certificate in reliance on the Exemption, that it understands that
there are certain conditions to the availability of the Exemption, including
that the certificate must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by S&P, Fitch Ratings or Moody's, and the certificate
is so rated and that it is an "accredited investor" as defined in

                                     A-2-6
<PAGE>

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 (iii) (1) it is an insurance company, (2)
the source of funds used to acquire or hold the certificate or interest therein
is an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.]

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the expiration of 21 years after the death of certain persons identified
in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-2-7
<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: ______________, _____                LASALLE BANK NATIONAL ASSOCIATION
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class M-[1][2][3][4][5][6][7] Certificates referred
to in the within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION
                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:________________________________
                                                    Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                        __________________________________________________
                                    Signature by or on behalf of assignor

                                      __________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                                                     EXHIBIT A-3

                           Form of Class P Certificate

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION

                                     A-3-1
<PAGE>

PURSUANT TO SECTION 6.02 OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE TRUSTEE THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
TRUSTEE, MASTER SERVICER OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

                                     A-3-2
<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No.1                                           Percentage Interest: 100%

Class P

Date of Pooling and Servicing Agreement and                Aggregate Initial Certificate  Principal Balance of this
Cut-off Date:                                              Certificate as of the Cut-off Date:
June 1, 2004                                               $100.00

First Distribution Date:                                   Initial Certificate Principal Balance of this
July 26, 2004                                              Certificate as of the Cut-off Date:
                                                           $100.00

Master Servicer:                                           CUSIP:  [_____]
EMC Mortgage Corporation

Last Scheduled Distribution Date:
July 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-HE5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class P Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional, closed-end one- to
         four-family first and second lien, fixed and adjustable interest rate
         mortgage loans sold by BEAR STEARNS ASSET BACKED SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer, the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that ___________________ is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional, closed-end first and second
lien, fixed and adjustable rate mortgage loans secured by one- to four- family
residences (collectively, the "Mortgage Loans") sold by Bear Stearns Asset
Backed Securities I LLC ("BSABS I"). The Mortgage Loans were sold by EMC
Mortgage Corporation

                                     A-3-3
<PAGE>

("EMC") to BSABS I. EMC will act as master servicer of the Mortgage Loans (in
that capacity, the "Master Servicer," which term includes any successors thereto
under the Agreement referred to below). The Trust Fund was created pursuant to
the Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "Agreement"), among BSABS I, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and Master Servicer and LaSalle Bank 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, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee

                                     A-3-4
<PAGE>

shall require receipt of (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit E and either Exhibit F or G, as applicable, and (ii) in all
other cases, an Opinion of Counsel satisfactory to it that such transfer may be
made without such registration or qualification (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Trustee or the
Master Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. Neither the Depositor nor the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Seller and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Class P Certificate will be made unless
the transferee provides either a certification pursuant to section 6.02(b) of
the Agreement or an Opinion of Counsel under Section 6.02(b) of the Agreement
satisfactory to the Trustee that the purchase of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Trustee, the Master Servicer or the Depositor to any obligation or
liability in addition to those undertaken in the agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                                     A-3-5
<PAGE>

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee 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 Trustee has caused this Certificate to
be duly executed.

Dated: ___________, ____                    LASALLE BANK NATIONAL ASSOCIATION,
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION
                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:_________________________________
                                                    Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                        __________________________________________________
                                    Signature by or on behalf of assignor

                                      __________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                                                     EXHIBIT A-4

                          Form of Class CE Certificates

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT
(AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 6.02
OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW,
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED

                                     A-4-1
<PAGE>

TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
TRUSTEE, MASTER SERVICER OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

                                     A-4-2
<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No.1                                           Percentage Interest: 100%

Class CE                                                   Variable Pass-Through Rate

Date of Pooling and Servicing Agreement and                Initial Certificate Notional Balance of this
Cut-off Date:                                              Certificate as of the Cut-off Date:
June 1, 2004                                               $[__________]

First Distribution Date:                                   Aggregate Certificate Notional Balance of this
July 26, 2004                                              Certificate as of the Cut-off Date:
                                                           $[__________]

Master Servicer:                                           CUSIP:  [_____]
EMC Mortgage Corporation

Last Scheduled Distribution Date:
July 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-HE5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class CE Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional, closed-end one- to
         four-family first and second lien, fixed and adjustable interest rate
         mortgage loans sold by BEAR STEARNS ASSET BACKED SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that __________________ is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership interest
of Certificates of the same Class as this Certificate in a trust (the "Trust
Fund") generally consisting of conventional, closed-end first and second lien,
fixed and adjustable rate mortgage loans secured by one- to four- family
residences (collectively, the "Mortgage Loans") sold by Bear Stearns Asset
Backed Securities I LLC ("BSABS"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to

                                     A-4-3
<PAGE>

BSABS I. EMC will act as master servicer of the Mortgage Loans (in that
capacity, the "Master Servicer," which term includes any successors thereto
under the Agreement referred to below). The Trust Fund was created pursuant to
the Pooling and Servicing Agreement, dated as of the Cut-off Date specified
above (the "Agreement"), among BSABS I, as depositor (the "Depositor"), EMC
Mortgage Corporation as seller and Master Servicer and LaSalle Bank 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,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit D and either
Exhibit E or F, as applicable, and (ii) in all other cases, an Opinion of
Counsel satisfactory to it that such transfer may be made without such
registration or qualification (which Opinion of Counsel shall not be an expense
of the Trust Fund or of the Depositor, the Trustee or the Master Servicer in
their respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. Neither the Depositor nor the Trustee is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Seller and the Master Servicer against any

                                     A-4-4
<PAGE>

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 Class CE Certificate will be made unless
the transferee provides either a certification pursuant to section 6.02 of the
Agreement or an Opinion of Counsel under Section 6.02 of the Agreement
satisfactory to the Trustee that the purchase of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Trustee, the Master Servicer or the Depositor to any obligation or
liability in addition to those undertaken in the agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                                     A-4-5
<PAGE>

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-4-6
<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: ___________, ____                    LASALLE BANK NATIONAL ASSOCIATION
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION
                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:________________________________
                                                     Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                        __________________________________________________
                                    Signature by or on behalf of assignor

                                      __________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                                                     EXHIBIT A-5

                          Form of Class R Certificates

                  THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 6.02
OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW,
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, MASTER
SERVICER OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED
STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR FREDDIE MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS

                                     A-5-1
<PAGE>

A "DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION,
(2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.

                                     A-5-2
<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No.1

Class R[-1][-2][RX]                                        Percentage Interest: 100%

Date of Pooling and Servicing Agreement and
Cut-off Date:
June 1, 2004

First Distribution Date:
July 26, 2004

Master Servicer:                                           CUSIP:  [_____]
EMC Mortgage Corporation

Last Scheduled Distribution Date:
July 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-HE5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class R[-1][-2][RX] Certificates with respect to a
         Trust Fund consisting primarily of a pool of conventional, closed-end
         one- to four-family first and second lien, fixed and adjustable
         interest rate mortgage loans sold by BEAR STEARNS ASSET BACKED
         SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer, the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that Bear, Stearns Securities Corp. is the
registered owner of the Percentage Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of conventional, closed-end first
and second lien, fixed and adjustable rate mortgage loans secured by one- to
four- family residences (collectively, the "Mortgage Loans") sold by Bear
Stearns Asset Backed Securities I LLC ("BSABS I"). The Mortgage Loans were sold
by EMC Mortgage Corporation ("EMC") to BSABS I. EMC will act as master servicer
of the Mortgage Loans (in that capacity,

                                     A-5-3
<PAGE>

the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among BSABS I, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and Master Servicer and LaSalle Bank 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, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Class R Certificate will be made unless
the transferee provides either a certification pursuant to section 6.02 of the
Agreement or an Opinion of Counsel satisfactory to the Trustee that the purchase
of this Certificate 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 Trustee, the Master Servicer or the Depositor to any obligation or
liability in addition to those undertaken in the agreement.

                                     A-5-4
<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other

                                     A-5-5
<PAGE>

liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee 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 Trustee has caused this Certificate to be duly
executed.

Dated: ____________, ____                   LASALLE BANK NATIONAL ASSOCIATION,
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Class R[-1][-2][RX] Certificates referred to in the
within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION
                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:________________________________
                                                     Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:                        __________________________________________________
                                    Signature by or on behalf of assignor

                                      __________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                                                       EXHIBIT B

                             MORTGAGE LOAN SCHEDULE
                             ----------------------

                             [provided upon request]

                                      B-1
<PAGE>

                                    EXHIBIT C

                                   [RESERVED]

                                      C-1
<PAGE>

                                                                       EXHIBIT D

                           FORM OF TRANSFER AFFIDAVIT

                                            Affidavit pursuant to Section
                                            860E(e)(4) of the Internal Revenue
                                            Code of 1986, as amended, and for
                                            other purposes

STATE OF          )
                  )ss:
COUNTY OF         )

         [NAME OF OFFICER], being first duly sworn, deposes and says:

         1. That he/she is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____] [the United States], on behalf of which
he makes this affidavit.

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Bear Stearns Asset-Backed
Securities I LLC Asset-Backed Certificates, Series 2004-HE5, Class R-__
Certificates (the "Residual Certificates") for the account of a disqualified
organization; (iii) it consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by Bear Stearns Asset Backed Securities
I LLC (upon advice of counsel) to constitute a reasonable arrangement to ensure
that the Residual Certificates will not be owned directly or indirectly by a
disqualified organization; and (iv) it will not transfer such Residual
Certificates unless (a) it has received from the transferee an affidavit in
substantially the same form as this affidavit containing these same four
representations and (b) as of the time of the transfer, it does not have actual
knowledge that such affidavit is false.

         3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

         4. That the Investor's taxpayer identification number is
______________________.

         5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.

                                      D-1
<PAGE>

         6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.

         7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.

         IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.

                                     [NAME OF INVESTOR]

                                     By:_______________________
                                       [Name of Officer]
                                       [Title of Officer]
                                       [Address of Investor for receipt of
                                        distributions]

                                        Address of Investor for receipt of tax
                                        information:

                                      D-2
<PAGE>

         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he/she
executed the same as his/her free act and deed and the free act and deed of the
Investor.

         Subscribed and sworn before me this ___ day of _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of ___________________, 20___.

                                      D-3
<PAGE>

                                    EXHIBIT E

                         FORM OF TRANSFEROR CERTIFICATE

                              ______________,200___

Bear Stearns Asset Backed Securities I LLC
383 Madison Avenue
New York, New York 10179

LaSalle Bank National Association
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60603

Attention: Bear Stearns Asset Backed Securities Trust 2004-HE5

         Re:      Bear Stearns Asset Backed Securities I LLC Asset-Backed
                  Certificates, Series 2004-HE5, Class[ ]
                  ---------------------------------------

Ladies and Gentlemen:

         In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Asset-Backed Certificates, Series 2004-HE5, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of June 1, 2004, among Bear Stearns Asset Backed
Securities I LLC, as depositor (the "Depositor"), EMC Mortgage Corporation, as
seller and master servicer and LaSalle Bank National Association, as trustee
(the "Trustee"). The Seller hereby certifies, represents and warrants to, a
covenants with, the Depositor and the Trustee that:

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

                                      E-1
<PAGE>

                                                   Very truly yours,

                                                   ____________________________
                                                   (Seller)

                                                   By:_________________________

                                                   Name:_______________________

                                                   Title:______________________

                                      E-2
<PAGE>

                                    EXHIBIT F

                     FORM OF INVESTMENT LETTER-NON RULE 144A

                                                                          [Date]

[SELLER]

Bear Stearns Asset Backed Securities I LLC
383 Madison Avenue
New York, New York 10179

LaSalle Bank National Association
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60603

         Re:      Bear Stearns Asset-Backed Securities I Trust 2004-HE5,
                  Asset-Backed Certificates, Series 2004-HE5 (the
                  "Certificates"), including the Class __ Certificates (the
                  "Privately Offered Certificates")
                  ---------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, we
confirm that:

                  (i)      we understand that the Privately Offered Certificates
                           are not being registered under the Securities Act of
                           1933, as amended (the "Act") or any applicable state
                           securities or "Blue Sky" laws, and are being sold to
                           us in a transaction that is exempt from the
                           registration requirements of such laws;

                  (ii)     any information we desired concerning the
                           Certificates, including the Privately Offered
                           Certificates, the trust in which the Certificates
                           represent the entire beneficial ownership interest
                           (the "Trust") or any other matter we deemed relevant
                           to our decision to purchase Privately Offered
                           Certificates has been made available to us;

                  (iii)    we are able to bear the economic risk of investment
                           in Privately Offered Certificates; we are an
                           institutional "accredited investor" as defined in
                           Section 501(a) of Regulation D promulgated under the
                           Act and a sophisticated institutional investor;

                  (iv)     we are acquiring Privately Offered Certificates for
                           our own account, not as nominee for any other person,
                           and not with a present view to any distribution or
                           other disposition of the Privately Offered
                           Certificates;

                  (v)      we agree the Privately Offered Certificates must be
                           held indefinitely by us (and may not be sold,
                           pledged, hypothecated or in any way disposed of)
                           unless subsequently registered under the Act and any
                           applicable state securities or "Blue Sky" laws or an
                           exemption from the registration

                                      F-1
<PAGE>

                           requirements of the Act and any applicable state
                           securities or "Blue Sky" laws is available;

                  (vi)     we agree that in the event that at some future time
                           we wish to dispose of or exchange any of the
                           Privately Offered Certificates (such disposition or
                           exchange not being currently foreseen or
                           contemplated), we will not transfer or exchange any
                           of the Privately Offered Certificates unless:

                                    (A) (1) the sale is to an Eligible Purchaser
                           (as defined below), (2) if required by the Pooling
                           and Servicing Agreement (as defined below) a letter
                           to substantially the same effect as either this
                           letter or, if the Eligible Purchaser is a Qualified
                           Institutional Buyer as defined under Rule 144A of the
                           Act, the Rule 144A and Related Matters Certificate in
                           the form attached to the Pooling and Servicing
                           Agreement (as defined below) (or such other
                           documentation as may be acceptable to the Trustee) is
                           executed promptly by the purchaser and delivered to
                           the addressees hereof and (3) all offers or
                           solicitations in connection with the sale, whether
                           directly or through any agent acting on our behalf,
                           are limited only to Eligible Purchasers and are not
                           made by means of any form of general solicitation or
                           general advertising whatsoever; and

                                    (B) if the Privately Offered Certificate is
                           not registered under the Act (as to which we
                           acknowledge you have no obligation), the Privately
                           Offered Certificate is sold in a transaction that
                           does not require registration under the Act and any
                           applicable state securities or "blue sky" laws and,
                           if LaSalle Bank National Association (the "Trustee")
                           so requests, a satisfactory Opinion of Counsel is
                           furnished to such effect, which Opinion of Counsel
                           shall be an expense of the transferor or the
                           transferee;

                  (vii)    we agree to be bound by all of the terms (including
                           those relating to restrictions on transfer) of the
                           Pooling and Servicing, pursuant to which the Trust
                           was formed; we have reviewed carefully and understand
                           the terms of the Pooling and Servicing Agreement;

                  (viii)   we either: (i) are not acquiring the Privately
                           Offered Certificate directly or indirectly by, or on
                           behalf of, an employee benefit plan or other
                           retirement arrangement which is subject to Title I of
                           the Employee Retirement Income Security Act of 1974,
                           as amended, and/or section 4975 of the Internal
                           Revenue Code of 1986, as amended, or (ii) in the case
                           of the Class M-7 Certificates, (A) we hereby
                           represent to the Trustee that we have acquired and
                           are holding the Class M-7 Certificate in reliance on
                           the Exemption, that we understand that there are
                           certain conditions to the availability of the
                           Exemption, including that the Class M-7 Certificate
                           must be rated, at the time of purchase, not lower
                           than "BBB-" (or its equivalent) by Standard & Poor's,
                           Fitch Ratings or Moody's and that we are an
                           "accredited investor" as defined in Rule 501(a)(1) of
                           Regulation D

                                      F-2
<PAGE>

                           issued under the Securities Act and we 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 (B) we hereby
                           represent to the Trustee that (1) we are an insurance
                           company, (2) the source of funds used to acquire or
                           hold the Class M-7 Certificate or interest therein is
                           an "insurance company general account", as such term
                           is defined in PTE 95-60, and (3) the conditions in
                           Sections I and III of PTE 95-60 have been satisfied
                           or (iii) in the case of the Privately Offered
                           Certificates (other than the Class M-7 Certificates),
                           have provided the Opinion of Counsel required by the
                           Agreement.

                  (ix)     We understand that each of the Privately Offered
                           Certificates bears, and will continue to bear, a
                           legend to substantiate the following effect: "THIS
                           CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
                           UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                           "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
                           LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
                           CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
                           REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
                           ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
                           APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
                           UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
                           THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
                           INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
                           (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
                           PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
                           HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
                           PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
                           RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
                           REGISTRATION PROVIDED BY RULE 144 UNDER THE
                           SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
                           FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
                           THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
                           (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
                           WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
                           PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
                           VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
                           RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
                           THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
                           RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
                           ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
                           PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
                           SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
                           CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
                           LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
                           JURISDICTION. [In the case of the Class M-7
                           Certificates: THIS CERTIFICATE MAY NOT BE ACQUIRED
                           DIRECTLY OR

                                      F-3
<PAGE>

                           INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT
                           PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT
                           TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
                           ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
                           INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE
                           PURCHASER OF A PRIVATELY OFFERED CERTIFICATE
                           REPRESENTS THAT (OR IS DEEMED TO REPRESENT IN THE
                           CASE OF A GLOBAL CERTIFICATE) (I) SUCH PRIVATELY
                           OFFERED CERTIFICATE HAS BEEN ACQUIRED AND IS BEING
                           HELD IN RELIANCE ON PROHIBITED TRANSACTION EXEMPTION
                           2002-41 AS AMENDED (THE "EXEMPTION"), AT THE TIME OF
                           PURCHASE, SUCH PRIVATELY OFFERED CERTIFICATE IS RATED
                           NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY S&P,
                           FITCH RATINGS OR MOODY'S AND THAT THE PURCHASER 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 (II) (1) IT IS
                           AN INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO
                           ACQUIRE OR HOLD THE CERTIFICATE OR INTEREST THEREIN
                           IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH
                           TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS
                           EXEMPTION ("PTCE") 95-60, AND (3) THE CONDITIONS IN
                           SECTIONS I AND III OF PTCE 95-60 HAVE BEEN
                           SATISFIED.] [In the case of the Class P and Class CE
                           Certificates]: NO TRANSFER OF THIS CERTIFICATE MAY BE
                           MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES
                           EITHER A CERTIFICATION PURSUANT TO SECTION 6.02 OF
                           THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY
                           TO THE TRUSTEE THAT THE PURCHASE AND HOLDING OF THIS
                           CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
                           NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
                           TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
                           RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
                           ("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT
                           SUBJECT THE TRUSTEE, MASTER SERVICER OR THE DEPOSITOR
                           TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
                           UNDERTAKEN IN THE AGREEMENT.]

         "ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified

                                      F-4
<PAGE>

Institutional Buyer as defined under Rule 144A of the Act or an institutional
"Accredited Investor" as defined under Rule 501 of the Act.

         Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of June 1, 2004, among
Bear Stearns Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation, as seller and master and LaSalle Bank National Association, as
Trustee (the "Pooling and Servicing Agreement').

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

Name of Nominee (if any):_______________________

                                      F-5
<PAGE>

         IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.

                                           Very truly yours,

                                           [PURCHASER]

                                           By:_________________________________
                                                    (Authorized Officer)

                                           By:_________________________________
                                                    (Attorney-in-fact)

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                          [NAME OF NOMINEE]

                                          By:___________________________________
                                                   (Authorized Officer)

                                          By:___________________________________
                                                   (Attorney-in-fact)

<PAGE>

                                    EXHIBIT G

                FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE

[SELLER]

Bear Stearns Asset Backed Securities I LLC
383 Madison Avenue
New York, New York 10179

LaSalle Bank National Association
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60603

         Re:      Bear Stearns Asset Backed Securities I Trust 2004-HE5,
                  Asset-Backed Certificates, Series 2004-HE5 (the
                  "Certificates"), including the Class __ Certificates (the
                  "Privately Offered Certificates")
                  ---------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:

1. It owned and/or invested on a discretionary basis eligible securities
(excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to a
repurchase agreement and swaps), as described below:

         Date: ______________, 20__ (must be on or after the close of its most
recent fiscal year)

         Amount: $ _____________________; and

2. The dollar amount set forth above is:

         a.       greater than $100 million and the undersigned is one of the
                  following entities:

                  (x)      ~        an insurance company as defined in Section
                                    2(13) of the Act1; or

                  (y)      ~        an investment company registered under the
                                    Investment Company Act or any business
                                    development company as defined in Section
                                    2(a)(48) of the Investment Company Act of
                                    1940; or

---------------
1 A purchase by an insurance company for one or more of its separate accounts,
as defined by Section 2(a)(37) of the Investment Company Act of 1940, which are
neither registered nor required to be registered thereunder, shall be deemed to
be a purchase for the account of such insurance company.

                                      G-1
<PAGE>

                  (z)      ~        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; or

                  (aa)     ~        a plan (i) established and maintained by a
                                    state, its political subdivisions, or any
                                    agency or instrumentality of a state or its
                                    political subdivisions, the laws of which
                                    permit the purchase of securities of this
                                    type, for the benefit of its employees and
                                    (ii) the governing investment guidelines of
                                    which permit the purchase of securities of
                                    this type; or

                  (bb)     ~        a business development company as defined in
                                    Section 202(a)(22) of the Investment
                                    Advisers Act of 1940; or

                  (cc)     ~        a corporation (other than a U.S. bank,
                                    savings and loan association or equivalent
                                    foreign institution), partnership,
                                    Massachusetts or similar business trust, or
                                    an organization described in Section
                                    501(c)(3) of the Internal Revenue Code; or

                  (dd)     ~        a U.S. bank, savings and loan association or
                                    equivalent foreign institution, which has an
                                    audited net worth of at least $25 million as
                                    demonstrated in its latest annual financial
                                    statements; or

                  (ee)     ~        an investment adviser registered under the
                                    Investment Advisers Act; or

         b.       ~        greater than $10 million, and the undersigned is a
                           broker-dealer registered with the SEC; or

         c.       ~        less than $ 10 million, and the undersigned is a
                           broker-dealer registered with the SEC and will only
                           purchase Rule 144A securities in transactions in
                           which it acts as a riskless principal (as defined in
                           Rule 144A); or

         d.       ~        less than $100 million, and the undersigned is an
                           investment company registered under the Investment
                           Company Act of 1940, which, together with one or more
                           registered investment companies having the same or an
                           affiliated investment adviser, owns at least $100
                           million of eligible securities; or

         e.       ~        less than $100 million, and the undersigned is an
                           entity, all the equity owners of which are qualified
                           institutional buyers.

         The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by

                                      G-2
<PAGE>

Rule 144A. The undersigned understands that the Privately Offered Certificates
may be resold, pledged or transferred only to (i) 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 in Rule 144A, or (ii) an
institutional "accredited investor," as such term is defined under Rule 501 of
the Act in a transaction that otherwise does not constitute a public offering.

         The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of June 1, 2004, among Bear Stearns Asset Backed
Securities I LLC, EMC Mortgage Corporation and LaSalle Bank National
Association, as Trustee, pursuant to which the Certificates were issued.

         The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, or section
4975 of the Internal Revenue Code of 1986, as amended, or (ii) in the case of
the Class M-7 Certificates, (A) hereby represent to the Trustee that it has
acquired and is holding the Class M-7 Certificate in reliance on the Exemption,
that it understands that there are certain conditions to the availability of the
Exemption, including that the Class M-7 Certificate must be rated, at the time
of purchase, not lower than "BBB-" (or its equivalent) by Standard & Poor's,
Fitch Ratings or Moody's and that the transferee 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 (B) hereby represent to the
Trustee that (1) it is an insurance company, (2) the source of funds used to
acquire or hold the Class M-7 Certificate or interest therein is an "insurance
company general account", as such term is defined in PTE 95-60, and (3) the
conditions in Sections I and III of PTE 95-60 have been satisfied or (iii) in
the case of the Privately Offered Certificates (other than the Class M-7
Certificates), has provided the Opinion of Counsel required by the Agreement.

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

Name of Nominee (if any):______________________

                                      G-3
<PAGE>

IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
____ day of ___________, 20___.

                                        Very truly yours,

                                        [PURCHASER]

                                        By:__________________________________
                                                 (Authorized Officer)

                                        By:__________________________________
                                                  (Attorney-in-fact)

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                         [NAME OF NOMINEE]

                                         By:___________________________________
                                                  (Authorized Officer)

                                         By:___________________________________
                                                  (Attorney-in-fact)

<PAGE>

                                                                       EXHIBIT H

                           FORM OF REQUEST FOR RELEASE

To:      LaSalle Bank National Association
         135 South LaSalle Street, Suite 1625
         Chicago, Illinois 60603

RE:      Pooling and Servicing Agreement, dated as of June 1, 2004, among Bear
         Stearns Asset Backed Securities I LLC, as Depositor, EMC Mortgage
         Corporation, as seller and master servicer and LaSalle Bank National
         Association, as Trustee
         -----------------------

         In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.

Mortgage Loan Number:
---------------------

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_____   1.  Mortgage Paid in Full and proceeds have been
            deposited into the Custodial Account

_____   2.  Foreclosure

_____   3.  Substitution

_____   4.  Other Liquidation

_____   5.  Nonliquidation                              Reason:_________________

_____   6.  California Mortgage Loan paid in full

                                               By:______________________________
                                                        (authorized signer)

                                               Issuer:__________________________
                                               Address:_________________________

                                               Date:____________________________

                                      H-1
<PAGE>

                                    EXHIBIT I

                          DTC Letter of Representations
                             [provided upon request]

                                       I-1
<PAGE>

                                    EXHIBIT J

                   Schedule of Mortgage Loans with Lost Notes
                             [provided upon request]

                                       J-1
<PAGE>

                                    EXHIBIT K

                           FORM OF CUSTODIAL AGREEMENT
                           ---------------------------

                  THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of June 30, 2004, by and among LASALLE
BANK NATIONAL ASSOCIATION, not individually but solely as trustee under the
Pooling and Servicing Agreement defined below (including its successors under
the Pooling and Servicing Agreement defined below, the "Trustee"), BEAR STEARNS
ASSET BACKED SECURITIES I LLC, as depositor (together with any successor in
interest, the "Depositor"), EMC MORTGAGE CORPORATION, as seller (in that
capacity, the "Seller") and master servicer (together with any successor in
interest or successor under the Pooling and Servicing Agreement referred to
below, the "Master Servicer") and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian").

                                WITNESSETH THAT:
                                ----------------

                  WHEREAS, the Depositor, the Seller, the Master Servicer and
the Trustee have entered into a Pooling and Servicing Agreement, dated as of
June 1, 2004, relating to the issuance of Bear Stearns Asset Backed Securities I
Trust 2004-HE5, Asset-Backed Certificates, Series 2004-HE5 (as in effect on the
date of this Agreement, the "Original Pooling and Servicing Agreement," and as
amended and supplemented from time to time, the "Pooling and Servicing
Agreement'); and

                  WHEREAS, the Custodian has agreed to act as agent for the
Trustee on behalf of the Certificateholders for the purposes of receiving and
holding certain documents and other instruments delivered by the Depositor, the
Seller or the Master Servicer under the Pooling and Servicing Agreement and the
Servicers under their respective Servicing Agreements, all upon the terms and
conditions and subject to the limitations hereinafter set forth;

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the
Depositor, the Seller, the Master Servicer and the Custodian hereby agree as
follows:

                                   ARTICLE I.

                                   DEFINITIONS

                  Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.

                                      K-1
<PAGE>

                                  ARTICLE II.

                          CUSTODY OF MORTGAGE DOCUMENTS

                  Section 2.1. CUSTODIAN TO ACT AS AGENT: ACCEPTANCE OF MORTGAGE
FILES. The custodian, as the duly appointed custodial agent of the Trustee for
these purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a)) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto (the
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders.

                  Section 2.2. RECORDATION OF ASSIGNMENTS. If any Mortgage File
includes one or more assignments of Mortgage that have not been recorded
pursuant to the provisions of Section 2.01 of the Pooling and Servicing
Agreement and the related Mortgage Loan is not a MOM Loan or the related
Mortgaged Properties are located in jurisdictions specifically excluded by the
Opinion of Counsel delivered to the Trustee pursuant to Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Seller for the purpose of recording it in the appropriate
public office for real property records, and the Seller, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.

                  Section 2.3. REVIEW OF MORTGAGE FILES.

                  (a) On or prior to the Closing Date, in accordance with
Section 2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver
to the Seller and the Trustee an Initial Certification in the form annexed
hereto as Exhibit One evidencing receipt (subject to any exceptions noted
therein) of a Mortgage File for each of the Mortgage Loans listed on the
Schedule attached hereto (the "Mortgage Loan Schedule").

                  (b) Within 90 days of the Closing Date, the Custodian agrees,
for the benefit of the Certificateholders, to review, in accordance with the
provisions of Section 2.02 of the Pooling and Servicing Agreement, each such
document, and shall deliver to the Seller, the Master Servicer, and the Trustee
an Interim Certification in the form annexed hereto as Exhibit Two to the effect
that all such documents have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule, except
for any exceptions listed on Schedule A attached to such Interim Certification.
The Custodian shall be under no duty or obligation to inspect, review or examine
said 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 or that they are other than what they
purport to be on their face.

                  (c) Not later than 180 days after the Closing Date, the
Custodian shall review, for the benefit of Certificateholders, the Mortgage
Files as provided in Section 2.02 of the Pooling and Servicing Agreement and
deliver to the Seller, the Master Servicer and the Trustee a Final Certification
in the form annexed hereto as Exhibit Three evidencing the completeness of the
Mortgage Files.

                                      K-2
<PAGE>

                  (d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.

         Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans missing from the Mortgage Files.

                  Section 2.4. NOTIFICATION OF BREACHES OF REPRESENTATIONS AND
WARRANTIES. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Depositor as set forth in the Pooling and Servicing
Agreement with respect to a Mortgage Loan relating to a Mortgage File, the
Custodian shall give prompt written notice to the Depositor, the Master
Servicer, and the Trustee.

                  Section 2.5. CUSTODIAN TO COOPERATE: RELEASE OF MORTGAGE
FILES. Upon receipt of written notice from the Trustee that the Seller has
repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing
Agreement, and a request for release (a "Request for Release") confirming that
the purchase price therefore has been deposited in the Protected Account or the
Distribution Account, then the Custodian agrees to promptly release to the
Seller the related Mortgage File.

                  Upon the Custodian's receipt of a Request for Release
substantially in the form of Exhibit H to the Pooling and Servicing Agreement
signed by a Servicing Officer of the Master Servicer, stating that it has
received payment in full of a Mortgage Loan or that payment in full will be
escrowed in a manner customary for such purposes, the Custodian agrees promptly
to release to the Master Servicer, the related Mortgage File. The Depositor
shall deliver to the Custodian and the Custodian agrees to review in accordance
with the provisions of the Custodial Agreement the Mortgage Note and other
documents constituting the Mortgage File with respect to any Replacement
Mortgage Loan.

                  From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Mortgage Insurance Policy or LPMI Policy, the Master Servicer shall
deliver to the Custodian a Request for Release signed by a Servicing Officer
requesting that possession of all of the Mortgage File be released to the Master
Servicer and certifying as to the reason for such release and that such release
will not invalidate any insurance coverage provided in respect of the Mortgage
Loan under any of the Insurance Policies. Upon receipt of the foregoing, the
Custodian shall deliver the Mortgage File to the Master Servicer. The Master
Servicer shall cause each Mortgage File or any document therein so released to
be returned to the Custodian when the need therefore by the Master Servicer no
longer exists, unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Protected Account or the Distribution Account or (ii) the Mortgage File or such
document has 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

                                      K-3
<PAGE>

Property either judicially or non-judicially, and the Master Servicer has
delivered to the Custodian a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Mortgage File or such document
was delivered and the purpose or purposes of such delivery.

                  At any time that the Master Servicer is required to deliver to
the Custodian a Request for Release, the Master Servicer shall deliver two
copies of the Request for Release if delivered in hard copy or the Master
Servicer may furnish such Request for Release electronically to the Custodian,
in which event the Servicing Officer transmitting the same shall be deemed to
have signed the Request for Release. In connection with any Request for Release
of a Mortgage File because of a repurchase of a Mortgage Loan, such Request for
Release shall be accompanied by an assignment of mortgage, without recourse,
representation or warranty from the Trustee to the Seller (unless such Mortgage
Loan is a MOM Loan) and the related Mortgage Note shall be endorsed without
recourse, representation or warranty by the Trustee and be returned to the
Seller. In connection with any Request for Release of a Mortgage File because of
the payment in full of a Mortgage Loan, such Request for Release shall be
accompanied by a certificate of satisfaction or other similar instrument to be
executed by or on behalf of the Trustee and returned to the Master Servicer.

                  Section 2.6. ASSUMPTION AGREEMENTS. In the event that any
assumption agreement, substitution of liability agreement or sale of servicing
agreement is entered into with respect to any Mortgage Loan subject to this
Agreement in accordance with the terms and provisions of the Pooling and
Servicing Agreement, the Master Servicer, to the extent provided in the Pooling
and Servicing Agreement, shall notify the Custodian that such assumption or
substitution agreement has been completed by forwarding to the Custodian the
original of such assumption or substitution agreement, which shall be added to
the related Mortgage File and, for all purposes, shall be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting parts thereof.

                                  ARTICLE III.

                            CONCERNING THE CUSTODIAN

                  Section 3.1. CUSTODIAN A BAILEE AND AGENT OF THE TRUSTEE. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and custodial agent of the Trustee and has no instructions to hold
any Mortgage Note or Mortgage for the benefit of any person other than the
Trustee and the Certificateholders undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement and in the Pooling
and Servicing Agreement. Except upon compliance with the provisions of Section
2.5 of this Agreement, no Mortgage Note, Mortgage or Mortgage File shall be
delivered by the Custodian to the Seller, the Depositor or the Master Servicer
or otherwise released from the possession of the Custodian.

                  Section 3.2. RESERVED.

                                      K-4
<PAGE>

                  Section 3.3. CUSTODIAN MAY OWN CERTIFICATES. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.

                  Section 3.4. MASTER SERVICER TO PAY CUSTODIAN'S FEES AND
EXPENSES. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer will pay
or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Custodian in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ), except any such expense, disbursement or advance as
may arise from its negligence or bad faith or to the extent that such cost or
expense is indemnified by the Depositor pursuant to the Pooling and Servicing
Agreement.

                  Section 3.5. CUSTODIAN MAY RESIGN; TRUSTEE MAY REMOVE
CUSTODIAN. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans. Upon receiving such written notice of resignation, the
Trustee shall either take custody of the Mortgage Files itself and give prompt
written notice thereof to the Depositor, the Master Servicer and the Custodian,
or promptly appoint a successor Custodian by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Custodian and
one copy to the successor Custodian. If the Trustee shall not have taken custody
of the Mortgage Files and no successor Custodian shall have been so appointed
and have accepted appointment within 30 days after the giving of such written
notice of resignation, the resigning Custodian may petition any court of
competent jurisdiction for the appointment of a successor Custodian.

                  The Trustee, at the direction of 25% of the
Certificateholders, shall remove the Custodian at any time upon 60 days prior
written notice to Custodian. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Master Servicer and the Depositor.

                  Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Depositor and the Master
Servicer of the appointment of any successor Custodian. Notwithstanding anything
to the contrary set forth herein, no successor Custodian shall be appointed by
the Trustee without the prior approval of the Depositor and the Master Servicer.

                  Section 3.6. MERGER OR CONSOLIDATION OF CUSTODIAN. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the

                                      K-5
<PAGE>

Custodian 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.

                  Section 3.7. REPRESENTATIONS OF THE CUSTODIAN. The Custodian
hereby represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.

                  Section 3.8. LIMITATION ON LIABILITY. Neither the Custodian
nor any of its directors, officers, agents or employees, shall be liable for any
action taken or omitted to be taken by it or them hereunder or in connection
herewith in good faith and believed (which belief may be based upon the opinion
or advice of counsel selected by it in the exercise of reasonable care) by it or
them to be within the purview of this Agreement, except for its or their own
negligence, lack of good faith or willful misconduct. The Custodian and any
director, officer, employee or agent of the Custodian may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. In no event shall the Custodian
or its directors, officers, agents and employees be held liable for any special,
indirect or consequential damages resulting from any action taken or omitted to
be taken by it or them hereunder or in connection herewith even if advised of
the possibility of such damages.

                  Notwithstanding anything herein to the contrary, the Custodian
agrees to indemnify the Trust Fund, the Trustee and each of their respective
officers, directors and agents for any and all liabilities, obligations, losses,
damages, payments, costs or expenses of any kind whatsoever that may be imposed
on, incurred by or asserted against the Trustee or Trust Fund, due to any act or
omission by the Custodian with respect to the Mortgage Files; provided, however,
that the Custodian shall not be liable to any of the foregoing Persons for any
amount and any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of such Person. The provisions of this
Section 3.8 shall survive the termination of this Custodial Agreement.

                  The Custodian and its directors, officers, employees and
agents shall be entitled to indemnification and defense from the Trust Fund for
any loss, liability or expense incurred without negligence, willful misconduct,
bad faith on their part, arising out of, or in connection with, the acceptance
or administration of the custodial arrangement created hereunder, including the
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or duties
hereunder.

                                  ARTICLE IV.

                            MISCELLANEOUS PROVISIONS

                  Section 4.1. NOTICES. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed

                                      K-6
<PAGE>

by the particular party whose address is stated herein by similar notice in
writing), in which case the notice will be deemed delivered when received.

                  Section 4.2. AMENDMENTS. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto. The Trustee shall give prompt notice
to the Custodian of any amendment or supplement to the Pooling and Servicing
Agreement and furnish the Custodian with written copies thereof.

                  Section 4.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

                  Section 4.4. RECORDATION OF AGREEMENT. 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 and at the Trust's expense, but
only upon direction accompanied by an Opinion of Counsel reasonably satisfactory
to the Depositor to the effect that the failure to effect such recordation is
likely to materially and adversely affect 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 4.5. 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.

                                      K-7
<PAGE>

                  IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.

<TABLE>
<CAPTION>

<S>                                                         <C>
Address:                                                    LASALLE BANK NATIONAL
                                                            ASSOCIATION, not individually but solely
                                                            as Trustee
135 South LaSalle Street
Chicago, IL 60603
                                                            By:______________________________________
Attention:                                                  Name:
                  BSABS I 2004-HE5                          Title:
Telecopy:
Confirmation:
Address:                                                    BEAR STEARNS ASSET BACKED
                                                            SECURITIES I LLC

383 Madison Avenue
New York, New York 10179                                    By:______________________________________
                                                            Name:
                                                            Title:

Address:                                                    EMC MORTGAGE CORPORATION

909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038                                         By:______________________________________
                                                            Name:
                                                            Title:

Address:                                                    WELLS FARGO BANK,
                                                            NATIONAL ASSOCIATION, as Custodian
1015 Tenth Avenue Southeast
Minneapolis, Minnesota 55414                                By:______________________________________
                                                            Name:    Leigh Taylor
                                                            Title:   Assistant Vice President
</TABLE>

<PAGE>

STATE OF ILLINOIS          )
                           ) ss:
COUNTY OF COOK             )

                  On the 30th day of June 2004 before me, a notary public in and
for said State, personally appeared _______________, known to me to be a(n)
___________________ of LaSalle Bank National Association, one of the parties
that executed the within agreement, and also known to me to be the person who
executed the within agreement on behalf of said party and acknowledged to me
that such party 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

[SEAL]

<PAGE>

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

                  On the 30th day of June 2004 before me, a notary public in and
for said State, personally appeared_____________________, known to me to be
a(n)________________of Bear Stearns Asset Backed Securities I LLC, and also
known to me to be the person who executed the within instrument on behalf of
said party, and acknowledged to me that such party 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
[SEAL]

<PAGE>

STATE OF TEXAS          )
                        ) ss:
COUNTY OF DALLAS        )

                  On the 30th day of June 2004 before me, a notary public in and
for said State, personally appeared _____________________, known to me to be
a(n) __________________of EMC Mortgage Corporation, one of the parties that
executed the within instrument, and also known to me to be the person who
executed the within instrument on behalf of said party, and acknowledged to me
that such party 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 MINNESOTA        )
                          ) ss:
COUNTY OF HENNEPIN        )

                  On the 30th day of June 2004 before me, a notary public in and
for said State, personally appeared Leigh Taylor, known to me to be a Assistant
Vice President of Wells Fargo Bank, National Association, one of the national
parties that executed the within instrument, and also known to me to be the
person who executed it on behalf of said party, and acknowledged to me that such
party executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        Notary Public

[Notarial Seal]

<PAGE>

                                   EXHIBIT ONE

                     FORM OF CUSTODIAN INITIAL CERTIFICATION

                                                            June 30, 2004

LaSalle Bank National Association
135 South LaSalle Street
Chicago, IL 60603

EMC Mortgage Corporation
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038

Attention: Bear Stearns Asset Backed Securities I LLC, Series 2004-HE5

                  Re: Custodial Agreement, dated as of June 30, 2004, by and
                  among LaSalle Bank National Association, Wells Fargo Bank,
                  National Association, Bear Stearns Asset Backed Securities I
                  LLC and EMC Mortgage Corporation relating to Bear Stearns
                  Asset Backed Securities I Trust 2004-HE5, Asset-Backed
                  Certificates, Series 2004-HE5
                  -----------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3(a) of the above-captioned
Custodial Agreement, and subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File (which contains an original Mortgage Note or lost note
affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.

                                             WELLS FARGO BANK, NATIONAL
                                             ASSOCIATION

                                             By:________________________________
                                             Name:______________________________
                                             Title:_____________________________

                                      K-1-1
<PAGE>

                                   EXHIBIT TWO

                     FORM OF CUSTODIAN INTERIM CERTIFICATION

                                                       [DATE]

LaSalle Bank National Association
135 South LaSalle Street
Chicago, IL 60603

EMC Mortgage Corporation
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038

Attention: Bear Stearns Asset Backed Securities I LLC, Series 2004-HE5

                  Re:      Custodial Agreement, dated as of June 30, 2004, by
                           and among LaSalle Bank National Association, Wells
                           Fargo Bank, National Association, Bear Stearns Asset
                           Backed Securities I LLC and EMC Mortgage Corporation
                           relating to Bear Stearns Asset Backed Securities I
                           Trust 2004-HE5, Asset-Backed Certificates, Series
                           2004-HE5
                           ----------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3(b) of the above-captioned
Custodial Agreement and subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.

                                           WELLS FARGO BANK, NATIONAL
                                           ASSOCIATION

                                           By:_______________________________
                                           Name:_____________________________
                                           Title:____________________________

                                      K-2-1
<PAGE>

                                  EXHIBIT THREE

                      FORM OF CUSTODIAN FINAL CERTIFICATION

                                                           [DATE]

LaSalle Bank National Association
135 South LaSalle Street
Chicago, IL 60603

EMC Mortgage Corporation
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038

Attention: Bear Stearns Asset Backed Securities I LLC, Series 2004-HE5

                  Re:      Custodial Agreement, dated as of June 30, 2004, by
                           and among LaSalle Bank National Association, Wells
                           Fargo Bank, National Association, Bear Stearns Asset
                           Backed Securities I LLC and EMC Mortgage Corporation
                           relating to Bear Stearns Asset Backed Securities I
                           Trust 2004-HE5, Asset-Backed Certificates, Series
                           2004-HE5
                           ----------------------------------------------------

                  In accordance with Section 2.3(c) of the above-captioned
Custodial Agreement and, subject to Section 2.02(b) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement
or in the Pooling and Servicing Agreement, as applicable.

                                     WELLS FARGO BANK, NATIONAL
                                     ASSOCIATION

                                     By:________________________________
                                     Name:______________________________
                                     Title:_____________________________

                                     K-3-1
<PAGE>

                                    EXHIBIT L

             FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE

         This certificate is being delivered pursuant to Section 3.13 of the
Pooling and Servicing Agreement, dated as of June 1, 2004 (the "Agreement"),
among Bear Stearns Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation (the "Company"), as seller and servicer, Wells Fargo Bank, National
Association, as master servicer and securities administrator, and U.S. Bank
National Association, as trustee. Capitalized terms used herein and not
otherwise defined have the meanings set forth in the Agreement.

         I, [identify the certifying individual], on behalf of LaSalle Bank
National Association, as trustee (the "Trustee") certify that:

         1. I have reviewed the annual report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing distribution or servicing reports
filed in respect of periods included in the year covered by that annual report,
of the trust (the "Trust") created pursuant to the Pooling and Servicing
Agreement, dated June 1, 2004 (the "P&S Agreement"), among Bear Stearns Asset
Backed Securities I LLC, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller (in that capacity, the "Seller") and master servicer (in
that capacity, the "Master Servicer") and LaSalle Bank National Association as
trustee (the "Trustee"); and

         2. Based on my knowledge, the distribution information in these reports
and any other information provided by the Trustee for inclusion in these
reports, taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which the statements were made, not misleading
as of the last day of the period covered by that annual report.

                                           Date:_______________________________

                                           [Signature]
                                           Name:
                                           Title:

                                       L-1
<PAGE>

                                                                       EXHIBIT M

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                        MORTGAGE LOAN PURCHASE AGREEMENT

                                      among

                            EMC MORTGAGE CORPORATION

                            as Mortgage Loan Seller,

                               ENCORE CREDIT CORP.

                                       and

                   BEAR STEARNS ASSET BACKED SECURITIES I LLC

                                  as Purchaser

                                   Dated as of

                                  June 30, 2004

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

                                                                                                               PAGE
<S>                 <C>
SECTION 1.          DEFINITIONS...................................................................................3

SECTION 2.          PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED RIGHTS....................................5

SECTION 3.          MORTGAGE LOAN SCHEDULES.......................................................................5

SECTION 4.          MORTGAGE LOAN TRANSFER........................................................................6

SECTION 5.          EXAMINATION OF MORTGAGE FILES.................................................................7

SECTION 6.          RECORDATION OF ASSIGNMENTS OF MORTGAGE........................................................9

SECTION 7.          REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN SELLER CONCERNING THE MORTGAGE LOANS.........10

SECTION 8.          REPRESENTATIONS AND WARRANTIES OF ENCORE CONCERNING THE GROUP II LOANS.......................17

SECTION 9.          REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOAN SELLER...........................19

SECTION 10.         REPRESENTATIONS AND WARRANTIES CONCERNING THE PURCHASER......................................20

SECTION 11.         CONDITIONS TO CLOSING........................................................................21

SECTION 12.         FEES AND EXPENSES............................................................................23

SECTION 13.         ACCOUNTANTS' LETTERS.........................................................................24

SECTION 14.         INDEMNIFICATION..............................................................................24

SECTION 15.         NOTICES......................................................................................26

SECTION 16.         TRANSFER OF MORTGAGE LOANS...................................................................26

SECTION 17.         TERMINATION..................................................................................26

SECTION 18.         REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY...............................27

SECTION 19.         SEVERABILITY.................................................................................27

SECTION 20.         COUNTERPARTS.................................................................................27

SECTION 21.         AMENDMENT....................................................................................27

SECTION 22.         GOVERNING LAW................................................................................27

SECTION 23.         FURTHER ASSURANCES...........................................................................27
</TABLE>

                                     - 2 -
<PAGE>

<TABLE>
<CAPTION>

<S>                 <C>
SECTION 24.         SUCCESSORS AND ASSIGNS.......................................................................27

SECTION 25.         THE MORTGAGE LOAN SELLER.....................................................................28

SECTION 26.         ENTIRE AGREEMENT.............................................................................28

SECTION 27.         NO PARTNERSHIP...............................................................................28
</TABLE>

                            EXHIBITS AND SCHEDULE TO
                        MORTGAGE LOAN PURCHASE AGREEMENT
                        --------------------------------

Exhibit 1         Contents of Mortgage File
Exhibit 2         [Reserved]
Exhibit 3         Mortgage Loan Schedule Information
Exhibit 4         Mortgage Loan Seller's Information
Exhibit 5         Purchaser's Information
Exhibit 6         Schedule of Lost Notes
Exhibit 7         Standard & Poor's Appendix E to Glossary

                                     - 3 -
<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  MORTGAGE LOAN PURCHASE AGREEMENT, dated as of June 30, 2004,
as amended and supplemented by any and all amendments hereto (collectively,
"THIS AGREEMENT"), by and among EMC MORTGAGE CORPORATION, a Delaware corporation
(the "MORTGAGE LOAN SELLER"), Encore Credit Corp. ("ENCORE") and BEAR STEARNS
ASSET BACKED SECURITIES I LLC, a Delaware limited liability company (the
"PURCHASER").

                  Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, closed-end, fixed rate and adjustable rate,
first and second lien mortgage loans secured by one- to four-family residences
(collectively, the "MORTGAGE LOANS") as described herein. The Purchaser intends
to deposit the Mortgage Loans into a trust fund (the "TRUST FUND") and create
Bear Stearns Asset-Backed Securities I Trust 2004-HE5, Asset-Backed
Certificates, Series 2004-HE5 (the "CERTIFICATES"), under a pooling and
servicing agreement, to be dated as of June 1, 2004 (the "POOLING AND SERVICING
AGREEMENT"), among the Purchaser, as depositor, the Mortgage Loan Seller, as
seller and master servicer (in that capacity, the "MASTER SERVICER") and LaSalle
Bank National Association, as trustee (the "TRUSTEE").

                  The Purchaser has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Number
333-113636) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "SECURITIES ACT"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "PUBLIC OFFERING"), as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the "REGISTRATION STATEMENT" and the
"PROSPECTUS," respectively. The "PROSPECTUS SUPPLEMENT" shall mean that
supplement, dated June 25, 2004, to the Prospectus, dated April 26, 2004,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, Bear, Stearns & Co. Inc. ("BEAR
STEARNS") and the Purchaser have entered into a terms agreement, dated as of
June 25, 2004, to an underwriting agreement dated April 28, 2004 (collectively,
the "UNDERWRITING AGREEMENT") between Bear Stearns and the Purchaser.

                  Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:

                  SECTION 1. DEFINITIONS. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:

                  ACQUISITION PRICE: Cash in an amount equal to $ * (plus $ * in
accrued interest).

                  BEAR STEARNS: Bear, Stearns & Co. Inc.

                                     - 4 -
<PAGE>

                  CLOSING DATE: June 30, 2004.

                  CUSTODIAL AGREEMENT: An agreement, dated as of June 30, 2004,
among the Depositor, the Seller, the Master Servicer, the Trustee and the
Custodian.

                  CUT-OFF DATE: June 1, 2004.

                  CUT-OFF DATE BALANCE: Shall mean $1,054,526,224.

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

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

                  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.

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

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

                  MORTGAGE FILE: The items referred to in EXHIBIT 1 and EXHIBIT
2 pertaining to a particular Mortgage Loan and any additional documents required
to be added to such documents pursuant to this Agreement.

                  MORTGAGE RATE: The annual rate of interest borne by a Mortgage
Note as stated herein.

                  MORTGAGOR: The obligor(s) 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 sum of (i) the Servicing
Fee Rate, (ii) the Trustee Fee Rate and (iii) the rate at which the LPMI Fee is
calculated, if any.

                  OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.

                  PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

                                     - 5 -
<PAGE>

                  PURCHASE PRICE: With respect to any Mortgage Loan required to
be purchased by the Mortgage Loan Seller or Encore pursuant to the applicable
provisions of this Agreement, an amount equal to the sum of (i) 100% of the
principal remaining unpaid on such Mortgage Loan as of the date of purchase
(including if a foreclosure has already occurred, the principal balance of the
related Mortgage Loan at the time the Mortgaged Property was acquired), (ii)
accrued and unpaid interest thereon at the Mortgage Interest Rate through and
including the last day of the month of purchase and (iii) any costs and damages
(if any) incurred by the Trust in connection with any violation of such Mortgage
Loan of any predatory lending laws.

                  RATING AGENCIES: Standard & Poor's and Moody's, each a "RATING
AGENCY."

                  REPLACEMENT MORTGAGE LOAN: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.

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

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

                  VALUE: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.

                  SECTION 2. PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED
RIGHTS. (a) Upon satisfaction of the conditions set forth in Section 11 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.

                  (b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificates will take place on
the Closing Date at the office of the Purchaser's counsel in New York, New York
or such other place as the parties shall agree.

                  (c) Upon the satisfaction of the conditions set forth in
Section 11 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Mortgage Loan Seller.

                  SECTION 3. MORTGAGE LOAN SCHEDULES. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "PRELIMINARY MORTGAGE LOAN SCHEDULE") setting forth
the information listed on Exhibit 3 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "FINAL
MORTGAGE LOAN SCHEDULE") setting forth the information listed on EXHIBIT 3 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final

                                     - 6 -
<PAGE>

Mortgage Loan Schedule shall be delivered to the Purchaser on the Closing Date,
shall be attached to an amendment to this Agreement to be executed on the
Closing Date by the parties hereto and shall be in form and substance mutually
agreed to by the Mortgage Loan Seller and the Purchaser (the "AMENDMENT"). If
there are no changes to the Preliminary Mortgage Loan Schedule, the Preliminary
Mortgage Loan Schedule shall be the Final Mortgage Loan Schedule for all
purposes hereof.

                  SECTION 4. MORTGAGE LOAN TRANSFER.

                  (a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereof. The Mortgage
Loan Seller will be entitled to all scheduled payments of principal and interest
on the Mortgage Loans due on or before the Cut-off Date (including payments
collected after the Cut-off Date) and all payments thereof. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.

                  (b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Trustee, or the Custodian on behalf of the Trustee, by
the Closing Date or such later date as is agreed to by the Purchaser and the
Mortgage Loan Seller (each of the Closing Date and such later date is referred
to as a "MORTGAGE FILE DELIVERY DATE"), the items of each Mortgage File,
PROVIDED, HOWEVER, that in lieu of the foregoing, the Mortgage Loan Seller may
deliver the following documents, under the circumstances set forth below: (x) in
lieu of the original Mortgage, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will upon
receipt of recording information relating to the Mortgage required to be
included thereon, be delivered to recording offices for recording and have not
been returned in time to permit their delivery as specified above, the Mortgage
Loan Seller may deliver a true copy thereof with a certification by the Mortgage
Loan Seller or the Master Servicer, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the original, which has
been transmitted for recording;" (y) in lieu of the Mortgage, assignments to the
Trustee or intervening assignments thereof, if the applicable jurisdiction
retains the originals of such documents or if the originals are lost (in each
case, as evidenced by a certification from the Mortgage Loan Seller or the
Master Servicer to such effect), the Mortgage Loan Seller may deliver
photocopies of such documents containing an original certification by the
judicial or other governmental authority of the jurisdiction where such
documents were recorded; and (z) in lieu of the Mortgage Notes relating to the
Mortgage Loans, each identified in the list delivered by the Purchaser to the
Trustee on the Closing Date and attached hereto as EXHIBIT 6 the Mortgage Loan
Seller may deliver lost note affidavits and indemnities of the Mortgage Loan
Seller; and provided further, however, that in the case of Mortgage Loans which
have been prepaid in full after the Cut-off Date and prior to the Closing Date,
the Mortgage Loan Seller, in lieu of delivering the above documents, may deliver
to the Trustee a certification by the Mortgage Loan Seller or the Master
Servicer to such effect. The

                                     - 7 -
<PAGE>

Mortgage Loan Seller shall deliver such original documents (including any
original documents as to which certified copies had previously been delivered)
or such certified copies to the Trustee, or the Custodian on behalf of the
Trustee, promptly after they are received. The Mortgage Loan Seller shall cause
the Mortgage and intervening assignments, if any, and the assignment of the
Mortgage to be recorded not later than 180 days after the Closing Date unless
such assignment is not required to be recorded under the terms set forth in
Section 6(a) hereof.

                  (c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System to indicate that such Mortgage Loans have
been assigned by the Mortgage Loan Seller to the Purchaser and by the Purchaser
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 in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Mortgage Loan 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 the Pooling and Servicing
Agreement unless and until such Mortgage Loan is repurchased in accordance with
the terms of the Pooling and Servicing Agreement.

                  (d) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans will ultimately be assigned to LaSalle
Bank National Association, as Trustee for the benefit of the Certificateholders,
on the date hereof.

                  SECTION 5. EXAMINATION OF MORTGAGE FILES.

                  (a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Trustee or the Mortgage
Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that the
Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Mortgage Loan Seller's
compliance with the delivery and recordation requirements of this Agreement and
the Pooling and Servicing Agreement. In addition, upon request of the Purchaser,
the Mortgage Loan Seller agrees to provide to the Purchaser, Bear Stearns and to
any investors or prospective investors in the Certificates information regarding
the Mortgage Loans and their servicing, to make the Mortgage Files available to
the Purchaser, Bear Stearns and to such investors or prospective investors
(which may be at the offices of the Mortgage Loan Seller and/or the Mortgage
Loan Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear Stearns and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear Stearns and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.

                                     - 8 -
<PAGE>

                  (b) Pursuant to the Pooling and Servicing Agreement, on the
Closing Date the Trustee (or the Custodian as obligated under the Custodial
Agreement) for the benefit of the Certificateholders will review items of the
Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage Loan
Seller an initial certification in the form attached as Exhibit One to the
Custodial Agreement.

                  (c) Within 90 days of the Closing Date, the Trustee or the
Custodian on its behalf shall, in accordance with the provisions of Section 2.02
of the Pooling and Servicing Agreement, deliver to the Mortgage Loan Seller and
the Trustee an Interim Certification in the form attached as Exhibit Two to the
Custodial Agreement to the effect that all such documents have been executed and
received and that such documents relate to the Mortgage Loans identified on the
Mortgage Loan Schedule, except for any exceptions listed on Schedule A attached
to such Interim Certification. The Custodian shall be under no duty or
obligation to inspect, review or examine said 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 or that they are other than what they purport to be on
their face.

                  (d) The Trustee or the Custodian on its behalf will review the
Mortgage Files within 180 days of the Closing Date and will deliver to the
Mortgage Loan Seller and the Master Servicer, and if reviewed by the Custodian,
the Trustee, a final certification substantially in the form of Exhibit Three to
the Custodial Agreement. If the Trustee or the Custodian on its behalf is unable
to deliver a final certification with respect to the items listed in EXHIBIT 2
due to any document that is missing, has not been executed, is unrelated,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in the Final Mortgage Loan
Schedule (a "MATERIAL DEFECT"), the Trustee or the Custodian on its behalf shall
notify the Mortgage Loan Seller of such Material Defect. The Mortgage Loan
Seller shall correct or cure any such Material Defect within 90 days from the
date of notice from the Trustee, the Depositor or the Master Servicer of the
Material Defect and if the Mortgage Loan Seller does not correct or cure such
Material Defect within such period and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Mortgage Loan Seller will, in accordance with the terms of the Pooling and
Servicing Agreement, within 90 days of the date of notice, provide the Trustee
with a Replacement Mortgage Loan (if within two years of the Closing Date) or
purchase the related Mortgage Loan at the applicable Purchase Price; PROVIDED,
HOWEVER, that if such defect relates solely to the inability of the Mortgage
Loan Seller to deliver the original security instrument or intervening
assignments thereof, or a certified copy because the originals of such
documents, or a certified copy, have not been returned by the applicable
jurisdiction, the Mortgage Loan Seller shall not be required to purchase such
Mortgage Loan if the Mortgage Loan Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. The foregoing repurchase obligation shall not apply in the
event that the Mortgage Loan Seller cannot deliver such original or copy of any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Mortgage Loan Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate of Mortgage Loan Seller or a Servicing Officer confirming that such
documents have been accepted for recording, and delivery to the Trustee shall be
effected by the Mortgage Loan Seller within thirty days of its receipt of the
original recorded document.

                                     - 9 -
<PAGE>

                  (e) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Replacement Mortgage Loan, the
related Mortgage File and any other documents and payments required to be
delivered in connection with a substitution pursuant to the Pooling and
Servicing Agreement. At the time of any purchase or substitution, the Trustee
shall (i) assign the selected Mortgage Loan to the Mortgage Loan Seller and
shall release or cause the Custodian to release the documents (including, but
not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage
File) in the possession of the Trustee or the Custodian, as applicable relating
to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Mortgage Loan Seller title to such Deleted Mortgage Loan.

                  SECTION 6. RECORDATION OF ASSIGNMENTS OF MORTGAGE.

                  (a) The Mortgage Loan Seller will, promptly after the Closing
Date, cause each Mortgage and each assignment of Mortgage from the Mortgage Loan
Seller to the Trustee, and all unrecorded intervening assignments, if any,
delivered on or prior to the Closing Date, to be recorded in all recording
offices in the jurisdictions where the related Mortgaged Properties are located;
PROVIDED, HOWEVER, the Mortgage Loan Seller need not cause to be recorded any
assignment which relates to a Mortgage Loan that is a MOM Loan or for which the
related Mortgaged Property is located in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel delivered by the Mortgage Loan
Seller to the Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan; PROVIDED, HOWEVER, notwithstanding the delivery of any Opinion of
Counsel, each assignment of Mortgage shall be submitted for recording by the
Mortgage Loan Seller in the manner described above, at no expense to the Trust
Fund or Trustee, upon the earliest to occur of (i) reasonable direction by the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 25% of the Trust, (ii) the occurrence of an Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgage
Loan Seller under the Pooling and Servicing Agreement, (iv) the occurrence of a
servicing transfer or an assignment of the servicing as described in Section
7.07 of the Pooling and Servicing Agreement or (iv) with respect to any one
assignment of Mortgage, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.

                  While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee or the Custodian on its behalf a certified copy of such Mortgage or
assignment. In the event that, within 180 days of the Closing Date, the Trustee
has not been provided with an Opinion of Counsel as described above or received
evidence of recording with respect to each Mortgage Loan delivered to the
Purchaser pursuant to the terms hereof or as set forth above and the related
Mortgage Loan is not a MOM Loan, the failure to provide evidence of recording or
such Opinion of Counsel shall be considered a Material Defect, and the
provisions of Section 5(c) and (d) shall apply. All customary recording fees and
reasonable expenses relating to the recordation of the assignments of mortgage
to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by
the Mortgage Loan Seller.

                  (b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this

                                     - 10 -
<PAGE>

Agreement be, and be treated as, a sale. It is, further, not the intention of
the parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Mortgage Loan Seller to the Purchaser to secure a debt or other obligation of
the Mortgage Loan Seller. However, in the event that, notwithstanding the intent
of the parties, the Mortgage Loans are held by a court to continue to be
property of the Mortgage Loan Seller, then (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
applicable Uniform Commercial Code; (b) the transfer of the Mortgage Loans
provided for herein shall be deemed to be a grant by the Mortgage Loan Seller to
the Purchaser of a security interest in all of the Mortgage Loan Seller'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, to the extent the Purchaser
would otherwise be entitled to own such Mortgage Loans and proceeds pursuant to
Section 4 hereof, including all amounts, other than investment earnings, from
time to time held or invested in any accounts created pursuant to the Pooling
and Servicing Agreement, whether in the form of cash, instruments, securities or
other property; (c) the possession by the Purchaser or the Trustee (or the
Custodian on its behalf) of Mortgage Notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" for purposes of perfecting the
security interest pursuant to Section 9-305 (or comparable provision) of the
applicable Uniform Commercial Code; and (d) 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 Purchaser for the purpose of perfecting such security
interest under applicable law. Any assignment of the interest of the Purchaser
pursuant to any provision hereof or pursuant to the Pooling and Servicing
Agreement shall also be deemed to be an assignment of any security interest
created hereby. The Mortgage Loan Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be reasonably necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Mortgage Loans, 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 Pooling and Servicing Agreement.

                  SECTION 7. REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN
SELLER CONCERNING THE MORTGAGE LOANS. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser as of the Closing Date or such other date as may
be specified below with respect to each Mortgage Loan being sold by it:

                  (a) The information set forth in the Mortgage Loan Schedule on
the Closing Date is complete, true and correct.

                  (b) All payments required to be made prior to the Cut-off Date
with respect to each Mortgage Loan have been made and no Mortgage Loan is
delinquent thirty one or more days; and the Mortgage Loan Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
from a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required under
any Mortgage Loan.

                                     - 11 -
<PAGE>

                  (c) Except with respect to taxes, insurance and other amounts
previously advanced by a prior servicer with respect to any Mortgage Loan, there
are no delinquent taxes, water charges, sewer rents, assessments, insurance
premiums, leasehold payments, including assessments payable in future
installments, or other outstanding charges affecting the related Mortgaged
Property.

                  (d) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which in the case of the Mortgage Loans are in the Mortgage File and
have been or will be recorded, if necessary to protect the interests of the
Trustee, and which have been or will be delivered to the Trustee, all in
accordance with this Agreement. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required by
the related policy. No Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the title insurer, to the
extent required by the policy, and which assumption agreement in the case of the
Mortgage Loans is part of the Mortgage File.

                  (e) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto.

                  (f) All buildings upon, or comprising part of, the Mortgaged
Property are insured by an insurer acceptable to Fannie Mae and Freddie Mac
against loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, and such insurer
is licensed to do business in the state where the Mortgaged Property is located.
All such insurance policies contain a standard mortgagee clause naming the
originator, its successors and assigns as mortgagee and Mortgage Loan Seller has
received no notice that all premiums thereon have not been paid. If upon
origination of the Mortgage Loan, the Mortgaged Property was, or was
subsequently deemed to be, in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available), which require under applicable law
that a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration (or any successor thereto) be obtained,
such flood insurance policy is in effect which policy is with a generally
acceptable carrier in an amount representing coverage not less than the least of
(A) the Stated Principal Balance of the related 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. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at Mortgagor's cost and expense and, on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at Mortgagor's cost and expense and to obtain reimbursement
therefor from the Mortgagor.

                  (g) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real estate
settlement procedures including, the Real Estate Settlement Procedures Act of
1974, as amended, consumer credit protection, equal credit

                                     - 12 -
<PAGE>

opportunity, disclosure and reporting laws and all predatory lending laws
applicable to the Mortgage Loan have been complied with in all material
respects.

                  (h) The Mortgage has not been satisfied, canceled,
subordinated, or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such release, cancellation,
subordination or rescission.

                  (i) The Mortgage is a valid, existing and enforceable first or
second lien on the Mortgaged Property, including all improvements on the
Mortgaged Property, if any, subject only to (1) the lien of current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan and which do
not adversely affect the Appraised Value of the Mortgaged Property and (3) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Mortgage. The Mortgage Loan Seller has full right to sell and assign the
Mortgage to the Purchaser.

                  (j) 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, except as the enforceability thereof
may be limited by bankruptcy, insolvency or reorganization or general principles
of equity.

                  (k) All parties to the Mortgage Note and the Mortgage had the
legal capacity to enter into the Mortgage Loan transaction and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties.

                  (l) The proceeds of the Mortgage Loan have been fully
disbursed and there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvement and as
to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage.

                  (m) Immediately prior to the conveyance of the Mortgage Loans
by the Mortgage Loan Seller to the Purchaser hereunder, the Mortgage Loan Seller
was the sole owner and holder of the Mortgage Loan; the related Originator or
the Mortgage Loan Seller was the custodian of the related escrow account, if
applicable; the Mortgage Loan had neither been assigned nor pledged, and the
Mortgage Loan Seller had good and marketable title thereto, and had full right
to transfer and sell the Mortgage Loan and the related servicing rights to the
Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim
or security interest subject to the applicable servicing agreement and had full
right and authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign the Mortgage Loan and the related
servicing rights, subject to the applicable servicing agreement, to the
Purchaser pursuant to the terms of this Agreement.

                                     - 13 -
<PAGE>

                  (n) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (1) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2) organized under the laws of such
state, qualified to do business in such state, a federal savings and loan
association or national bank having principal offices in such state or not
deemed to be doing business in such state under applicable law.

                  (o) The Mortgage Loan is covered by an ALTA lender's title
insurance policy or equivalent form acceptable to the Department of Housing and
Urban Development, or any successor thereto, and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in clause (i) above) the Mortgage Loan Seller (as
assignee), its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan. Additionally,
such lender's title insurance policy affirmatively insures ingress and egress,
and against encroachments by or upon the Mortgaged Property or any interest
therein. With respect to each Mortgage Loan, the Mortgage Loan Seller (as
assignee) is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect. No claims have been
made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Mortgage Loan Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy.

                  (p) Except as provided in clause (b), immediately prior to the
Cut-off Date, there was no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and there was no event which,
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,
and the Mortgage Loan Seller has not waived any default, breach, violation or
event of acceleration.

                  (q) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
which are or may be liens prior to or equal with, the lien of the related
Mortgage.

                  (r) At the time of origination, each Mortgaged Property was
the subject of a full appraisal which conformed to the underwriting requirements
of the originator of the Mortgage Loan. All improvements which were considered
in any appraisal which was used in determining the Appraised Value of the
related Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.

                  (s) The origination, servicing and collection practices with
respect to each Mortgage Note and Mortgage including, the establishment,
maintenance and servicing of the escrow accounts and escrow payments, if any,
since origination, have been conducted in all respects in accordance with the
terms of Mortgage Note and in compliance with all applicable laws and
regulations and, unless otherwise required by law or Fannie Mae/Freddie Mac
standards, in accordance with the proper, prudent and customary practices in the
mortgage

                                     - 14 -
<PAGE>

origination and servicing business. With respect to the escrow accounts and
escrow payments, if any, and a Mortgage Loan all such payments are in the
possession or under the control of the Mortgage Loan Seller (including pursuant
to a Subservicing Agreement) and there exists no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. Any interest required to be paid pursuant to state and local law has been
properly paid and credited.

                  (t) The Mortgaged Property is free of material damage and
waste and there is no proceeding pending for the total or partial condemnation
thereof.

                  (u) The Mortgage contains customary and enforceable provisions
to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
intended to be provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. The Mortgagor has not notified the Mortgage
Loan Seller and the Mortgage Loan Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act.

                  (v) The Mortgage Note is not and has not been secured by any
collateral except the lien of the applicable Mortgage.

                  (w) [Reserved]

                  (x) In the event the Mortgage constitutes 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 the 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.

                  (y) No Mortgage Loan contains a permanent or temporary
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan.

                  (z) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of the Mortgage Loan.

                  (aa) No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property.

                  (bb) To the best of Mortgage Loan Seller's knowledge, the
Mortgaged Property is lawfully occupied under applicable law and 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, have been made or obtained from the appropriate authorities.

                                     - 15 -
<PAGE>

                  (cc) The assignment of Mortgage with respect to a Mortgage
Loan is in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.

                  (dd) The Mortgaged Property consists of a single parcel of
real property with or without a detached single family residence erected
thereon, or an individual condominium unit, or a 2-4 family dwelling, or an
individual unit in a planned unit development as defined by Fannie Mae or a
townhouse, each structure of which is permanently affixed to the Mortgaged
Property, and is legally classified as real estate.

                  (ee) Each Mortgage Loan at the time of origination was
underwritten in general in accordance with guidelines not inconsistent with the
guidelines set forth in the Prospectus Supplement and generally accepted credit
underwriting guidelines.

                  (ff) No error, omission, misrepresentation, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Mortgage Loan Seller or the related Originator.

                  (gg) None of the Mortgage Loans are (a) loans subject to 12
CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the
regulation implementing TILA, which implements the Home Ownership and Equity
Protection Act of 1994 ("HOEPA") or (b) classified and/or defined as a "high
cost home loan" under any federal, state, or local law, including, but not
limited to, the States of Georgia or North Carolina.

                  (hh) None of the Mortgage Loans originated on or after October
1, 2002 and before March 7, 2003 was secured by property located in the State of
Georgia.

                  (ii) None of the Group III Loans originated before October 1,
2002 imposes a Prepayment Charge for a term exceeding five years; none of the
Group III Loans originated on or after October 1, 2002 imposes a Prepayment
Charge for a term exceeding three years.

                  (jj) No proceeds from any Group III Loan were used to finance
single-premium credit insurance policies.

                  (kk) The servicer for each Group III Loan 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 (ie.
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis.

                  (ll) The conforming one- to four-family mortgage loans in Loan
Group III, which may include the balance of any subordinated lien, each have an
original principal balance that does not exceed Freddie Mac's dollar amount
limits.

                  (mm) None of the Mortgage Loans contains provisions pursuant
to which monthly payments are (a) paid or partially paid with funds deposited in
any separate account established by the Mortgage Loan Seller, the mortgagor, or
anyone on behalf of the mortgagor, (b) paid by any source other than the
mortgagor or (c) contains any other similar provisions

                                     - 16 -
<PAGE>

which may constitute a "buydown" provision. None of the Mortgage Loans is a
graduated payment mortgage loan and no Mortgage Loan has a shared appreciation
or other contingent interest feature;

                  (nn) Each Mortgage Loan that contains a provision for the
assumption substitution of liability, pursuant to which the original mortgagor
is released from liability and another person is substituted as the mortgagor
and becomes liable under the Mortgage Note, shall be effective only if such
person satisfies the then current underwriting practices and procedures of
prudent mortgage lenders in a state in which the mortgaged property is located.

                  (oo) The Mortgaged Property and all improvements thereon
comply with all requirements of any applicable zoning and subdivision laws and
ordinances.

                  (pp) None of Mortgage Loans are secured by a leasehold
interest.

                  (qq) Appraisal Form 1004 or Form 2055 with an interior
inspection for first lien Mortgage Loans has been obtained. Form 704, 2065 or
2055 with an exterior only inspection for junior lien Mortgage Loans has been
obtained.

                  (rr) All points and fees related to each Group II Loan were
disclosed in writing to the mortgagor in accordance with applicable state and
federal law and regulation. Except in the case of a Group II Loan in an original
principal amount of less than $60,000 which would have resulted in an
unprofitable origination, no mortgagor was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such loan
and such 5% limitation is calculated in accordance with Fannie Mae's
anti-predatory lending requirements as set forth in the Fannie Mae Selling
Guide.

                  (ss) No Group II Loan is a "High-Risk Home Loan" as defined in
the Illinois High-Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp.
Stat. 137/1 et seq.).

                  (tt) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Group II Loan has been disclosed in
writing to the borrower in accordance with applicable state and federal law and
regulation.

                  (uu) No Group II Loan is a subsection 10 mortgage under the
Oklahoma Home Ownership and Equity Protection Act.

                  (vv) Each Prepayment Charge is enforceable and was originated
in compliance with all applicable federal, state and local laws.

                  (ww) With respect to any Mortgage Loan that contains a
provision permitting imposition of a premium upon a prepayment prior to
maturity, the prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law.

                  (xx) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in Appendix E of the Standard & Poor's
Glossary For File Format For LEVELS(R) Version 5.6 Revised attached hereto as
Exhibit 7.)

                                     - 17 -
<PAGE>

                  It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Replacement Mortgage Loan as of the date of
substitution.

                  Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser or the Trustee of a breach of any representation or
warranty of the Mortgage Loan Seller set forth in this Section 7 which
materially and adversely affects the value of the interests of the Purchaser,
the Certificateholders or the Trustee in any of the Mortgage Loans delivered to
the Purchaser pursuant to this Agreement, the party discovering or receiving
notice of such breach shall give prompt written notice to the others. It is
understood and agreed that a breach of any one of the representations contained
in clauses (gg) through (ll) above in respect of a Group III Loan will be deemed
to materially adversely affect the interests of the Certificateholders. In the
case of any such breach of a representation or warranty set forth in this
Section 7, within 90 days from the date of discovery by the Mortgage Loan
Seller, or the date the Mortgage Loan Seller is notified by the party
discovering or receiving notice of such breach (whichever occurs earlier), the
Mortgage Loan Seller will (i) cure such breach in all material respects, (ii)
purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Replacement
Mortgage Loan in exchange for such Mortgage Loan; provided that, (A) in the case
of a breach of the representation and warranty concerning the Mortgage Loan
Schedule contained in clause (a) of this Section 7, if such breach is material
and relates to any field on the Mortgage Loan Schedule which identifies any
Prepayment Charge or (B) in the case of a breach of the representation contained
in clause (vv) of this Section 7, then, in each case, in lieu of purchasing such
Mortgage Loan from the Trust Fund at the Purchase Price, the Mortgage Loan
Seller shall pay the amount of the Prepayment Charge (net of any amount
previously collected by or paid to the Trust Fund in respect of such Prepayment
Charge) from its own funds and without reimbursement therefor, and the Mortgage
Loan Seller shall have no obligation to repurchase or substitute for such
Mortgage Loan. The obligations of the Mortgage Loan Seller to cure, purchase or
substitute a qualifying Replacement Mortgage Loan shall constitute the
Purchaser's, the Trustee's and the Certificateholder's sole and exclusive remedy
under this Agreement or otherwise respecting a breach of representations or
warranties hereunder with respect to the Mortgage Loans, except for the
obligation of the Mortgage Loan Seller to indemnify the Purchaser for such
breach as set forth in and limited by Section 14 hereof and except for the cure,
repurchase and substitution obligations of Encore Under Section 8.

                  Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Replacement Mortgage Loan pursuant to the terms hereof.

                  SECTION 8. REPRESENTATIONS AND WARRANTIES OF ENCORE CONCERNING
THE GROUP II LOANS. Encore hereby represent and warrant to the Purchaser as of
the Closing Date or such other date as may be specified below with respect to
each Group II Loan originated by it:

                                     - 18 -
<PAGE>

                  (a) No borrower was encouraged or required to select a Group
II Loan product offered by Encore, which is a higher cost product designed for
less creditworthy borrowers, unless at the time of the Group II Loan's
origination, such borrower did not qualify taking into account credit history
and debt-to-income ratios for a lower-cost credit product then offered by Encore
or any affiliate of Encore. If, at the time of loan application, the borrower
may have qualified for a lower-cost credit product then offered by any mortgage
lending affiliate of Encore, or Encore referred the borrower's application to
such affiliate for underwriting consideration.

                  (b) The methodology used in underwriting the extension of
credit for each Group II Loan employs objective mathematical principles which
relate the borrower's income, assets and liabilities to the proposed payment and
such underwriting methodology does not rely on the extent of the borrower's
equity in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the borrower had a reasonable ability to make
timely payments of the Group II Loan.

                  (c) With respect to any Group II Loan that contains a
provision permitting imposition of a premium upon a prepayment prior to
maturity; (i) prior to the loan's origination, the borrower agreed to such
premium in exchange for a monetary benefit, including but not limited to a rate
or fee reduction and (ii) prior to the loan's origination, the borrower was
offered the option of obtaining a mortgage loan that did not require payment of
such a premium.

                  (d) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extensions of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of a Group II Loan; No proceeds from any Group II Loan were used to
purchase single premium credit insurance policies as part of the origination of,
or as a condition to closing, such Group II Loan.

                  Upon discovery or receipt of notice by Encore, the Purchaser
or the Trustee of a breach of any representation or warranty of Encore set forth
in this Section 8 which materially and adversely affects the value of the
interests of the Purchaser, the Certificateholders or the Trustee in any of the
Group II Loans delivered to the Purchaser pursuant to this Agreement, the party
discovering or receiving notice of such breach shall give prompt written notice
to the others. In the case of any such breach of a representation or warranty
set forth in this Section 8, within 90 days from the date of discovery by
Encore, or the date that Encore is notified by the party discovering or
receiving notice of such breach (whichever occurs earlier), Encore will either
(i) cure such breach in all material respects, (ii) purchase the affected Group
II Loan at the applicable Purchase Price or (iii) if within two years of the
Closing Date, substitute a qualifying Substitute Loan in exchange for such
Mortgage Loan. In addition to the obligations of the Mortgage Loan Seller under
Section 7, the obligations of Encore to cure, purchase or substitute a
qualifying Replacement Mortgage Loan shall constitute the Purchaser's, the
Trustee's and the Certificateholder's sole and exclusive remedy under this
Agreement or otherwise respecting a breach of representations or warranties
hereunder with respect to the Group II Loans.

                                     - 19 -
<PAGE>

                  Any cause of action against Encore or relating to or arising
out of a breach by Encore of any representations and warranties made in this
Section 8 shall accrue as to any Mortgage Loan upon (i) discovery of such breach
by Encore or notice thereof by the party discovering such breach and (ii)
failure by Encore to cure such breach, purchase such Group II Loan or substitute
a qualifying Replacement Mortgage Loan pursuant to the terms hereof.

                  SECTION 9. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:

                  (a) the Mortgage Loan Seller (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (ii) is qualified and in good standing to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Mortgage Loan Seller's business as presently conducted or on the Mortgage
Loan Seller's ability to enter into this Agreement and to consummate the
transactions contemplated hereby or thereby;

                  (b) the Mortgage Loan Seller has full power to own its
property, to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;

                  (c) the execution and delivery by the Mortgage Loan Seller of
this Agreement has been duly authorized by all necessary action on the part of
the Mortgage Loan Seller; and neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein or therein
contemplated, nor compliance with the provisions hereof or thereof, will
conflict with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment, decree or
order binding on the Mortgage Loan Seller or its properties or the charter or
by-laws of the Mortgage Loan Seller, except those conflicts, breaches or
defaults which would not reasonably be expected to have a material adverse
effect on the Mortgage Loan Seller's ability to enter into this Agreement and to
consummate the transactions contemplated hereby or thereby;

                  (d) the execution, delivery and performance by the Mortgage
Loan Seller of this Agreement and the consummation of the transactions
contemplated hereby or thereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other action in
respect of, any state, federal or other governmental authority or agency, except
those consents, approvals, notices, registrations or other actions as have
already been obtained, given or made and, in connection with the recordation of
the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

                  (e) this Agreement has been duly executed and delivered by the
Mortgage Loan Seller and, assuming due authorization, execution and delivery by
the Purchaser or the parties thereto, constitutes a valid and binding obligation
of the Mortgage Loan Seller enforceable against it in accordance with its terms
(subject to applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally);

                                     - 20 -
<PAGE>

                  (f) there are no actions, suits or proceedings pending or, to
the knowledge of the Mortgage Loan Seller, threatened against the Mortgage Loan
Seller, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions contemplated by
this Agreement or (ii) with respect to any other matter which in the judgment of
the Mortgage Loan Seller could reasonably be expected to be determined adversely
to the Mortgage Loan Seller and if determined adversely to the Mortgage Loan
Seller materially and adversely affect the Mortgage Loan Seller's ability to
perform its obligations under this Agreement; and the Mortgage Loan Seller is
not in default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and

                  (g) the Mortgage Loan Seller's Information (as defined in
Section 14(a) hereof) does not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.

                  SECTION 10. REPRESENTATIONS AND WARRANTIES CONCERNING THE
PURCHASER. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:

                  (a) the Purchaser (i) is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (ii) is qualified and in good standing to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Purchaser's business as presently conducted or on the Purchaser's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;

                  (b) the Purchaser has full power to own its property, to carry
on its business as presently conducted and to enter into and perform its
obligations under this Agreement;

                  (c) the execution and delivery by the Purchaser of this
Agreement has been duly authorized by all necessary action on the part of the
Purchaser; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein or therein contemplated, nor compliance
with the provisions hereof or thereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Purchaser or its properties or the certificate of formation or limited liability
company agreement of the Purchaser, except those conflicts, breaches or defaults
which would not reasonably be expected to have a material adverse effect on the
Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;

                  (d) the execution, delivery and performance by the Purchaser
of this Agreement and the consummation of the transactions contemplated hereby
or thereby do not require the consent or approval of, the giving of notice to,
the registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made;

                                     - 21 -
<PAGE>

                  (e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by the
Mortgage Loan Seller, constitutes a valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);

                  (f) there are no actions, suits or proceedings pending or, to
the knowledge of the Purchaser, threatened against the Purchaser, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii) with
respect to any other matter which in the judgment of the Purchaser could
reasonably be expected to be determined adversely to the Purchaser and if
determined adversely to the Purchaser materially and adversely affect the
Purchaser's ability to perform its obligations under this Agreement; and the
Purchaser is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as to materially and
adversely affect the transactions contemplated by this Agreement; and

                  (g) the Purchaser's Information (as defined in Section 14(b)
hereof) does not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.

                  SECTION 11. CONDITIONS TO CLOSING.

                  (a) The obligations of the Purchaser under this Agreement will
be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:

                           (1) Each of the obligations of the Mortgage Loan
         Seller required to be performed at or prior to the Closing Date
         pursuant to the terms of this Agreement shall have been duly performed
         and complied with in all material respects; all of the representations
         and warranties of the Mortgage Loan Seller under this Agreement shall
         be true and correct as of the date or dates specified in all material
         respects; and no event shall have occurred which, with notice or the
         passage of time, would constitute a default under this Agreement or the
         Pooling and Servicing Agreement; and the Purchaser shall have received
         certificates to that effect signed by authorized officers of the
         Mortgage Loan Seller.

                           (2) The Purchaser shall have received all of the
         following closing documents, in such forms as are agreed upon and
         reasonably acceptable to the Purchaser, duly executed by all
         signatories other than the Purchaser as required pursuant to the
         respective terms thereof:

                           (i) If required pursuant to Section 3 hereof, the
                  Amendment dated as of the Closing Date and any documents
                  referred to therein;

                           (ii) If required pursuant to Section 3 hereof, the
                  Final Mortgage Loan Schedule containing the information set
                  forth on EXHIBIT 3 hereto, one copy to be attached to each
                  counterpart of the Amendment;

                                     - 22 -
<PAGE>

                           (iii) The Pooling and Servicing Agreement, in form
                  and substance reasonably satisfactory to the Trustee and the
                  Purchaser, and all documents required thereby duly executed by
                  all signatories;

                           (iv) A certificate of an officer of the Mortgage Loan
                  Seller dated as of the Closing Date, in a form reasonably
                  acceptable to the Purchaser and attached thereto the
                  resolutions of the Mortgage Loan Seller authorizing the
                  transactions contemplated by this Agreement, together with
                  copies of the articles of incorporation, by-laws and
                  certificate of good standing of the Mortgage Loan Seller;

                           (v) One or more opinions of counsel from the Mortgage
                  Loan Seller's counsel otherwise in form and substance
                  reasonably satisfactory to the Purchaser, the Trustee and each
                  Rating Agency;

                           (vi) A letter from each of the Rating Agencies giving
                  each Class of Certificates set forth on Schedule A hereto the
                  rating set forth therein; and

                           (vii) Such other documents, certificates (including
                  additional representations and warranties) and opinions as may
                  be reasonably necessary to secure the intended ratings from
                  each Rating Agency for the Certificates.

                           (3) The Certificates to be sold to Bear Stearns
         pursuant to the Underwriting Agreement and the Purchase Agreement shall
         have been issued and sold to the Bear Stearns.

                           (4) The Mortgage Loan Seller shall have furnished to
         the Purchaser such other certificates of its officers or others and
         such other documents and opinions of counsel to evidence fulfillment of
         the conditions set forth in this Agreement and the transactions
         contemplated hereby as the Purchaser and its counsel may reasonably
         request.

                  (b) The obligations of the Mortgage Loan Seller under this
Agreement shall be subject to the satisfaction, on or prior to the Closing Date,
of the following conditions:

                           (1) The obligations of the Purchaser required to be
         performed by it on or prior to the Closing Date pursuant to the terms
         of this Agreement shall have been duly performed and complied with in
         all material respects, and all of the representations and warranties of
         the Purchaser under this Agreement shall be true and correct in all
         material respects as of the date hereof and as of the Closing Date, and
         no event shall have occurred which would constitute a breach by it of
         the terms of this Agreement or the Pooling and Servicing Agreement, and
         the Mortgage Loan Seller shall have received a certificate to that
         effect signed by an authorized officer of the Purchaser.

                           (2) The Mortgage Loan Seller shall have received
         copies of all of the following closing documents, in such forms as are
         agreed upon and reasonably acceptable to the Mortgage Loan Seller, duly
         executed by all signatories other than the Mortgage Loan Seller as
         required pursuant to the respective terms thereof:

                                     - 23 -
<PAGE>

                  (i) If required pursuant to Section 3 hereof, the Amendment
         dated as of the Closing Date and any documents referred to therein;

                  (ii) The Pooling and Servicing Agreement, in form and
         substance reasonably satisfactory to the Mortgage Loan Seller and the
         Trustee, and all documents required thereby duly executed by all
         signatories;

                  (iii) A certificate of an officer of the Purchaser dated as of
         the Closing Date, in a form reasonably acceptable to the Mortgage Loan
         Seller, and attached thereto the written consent of the member of the
         Purchaser authorizing the transactions contemplated by this Agreement
         and the Pooling and Servicing Agreement, together with copies of the
         Purchaser's certificate of formation, limited liability company
         agreement and evidence as to the good standing of the Purchaser dated
         as of a recent date;

                  (iv) One or more opinions of counsel from the Purchaser's
         counsel in form and substance reasonably satisfactory to the Mortgage
         Loan Seller, the Trustee and the Rating Agencies; and

                  (v) Such other documents, certificates (including additional
         representations and warranties) and opinions as may be reasonably
         necessary to secure the intended rating from each Rating Agency for the
         Certificates.

                  SECTION 12. FEES AND EXPENSES. Subject to Section 17 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the Certificates and the filing fee of the
Commission as in effect on the date on which the Registration Statement was
declared effective, (iv) the fees and expenses including counsel's fees and
expenses in connection with any "blue sky" and legal investment matters, (v) the
fees and expenses of the Trustee which shall include without limitation the fees
and expenses of the Trustee (and the fees and disbursements of its counsel) with
respect to (A) legal and document review of this Agreement, the Pooling and
Servicing Agreement, the Certificates and related agreements, (B) attendance at
the Closing and (C) review of the Mortgage Loans to be performed by the Trustee
or the Custodian on its behalf, (vi) the expenses for printing or otherwise
reproducing the Certificates, the Prospectus and the Prospectus Supplement,
(vii) the fees and expenses of each Rating Agency (both initial and ongoing),
(viii) the fees and expenses relating to the preparation and recordation of
mortgage assignments (including intervening assignments, if any and if
available, to evidence a complete chain of title from the originator to the
Trustee) from the Mortgage Loan Seller to the Trustee or the expenses relating
to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may
be, and (ix) Mortgage File due diligence expenses and other out-of-pocket
expenses incurred by the Purchaser in connection with the purchase of the
Mortgage Loans and by Bear Stearns in connection with the sale of the
Certificates. The Mortgage Loan Seller additionally agrees to pay directly to
any third party on a timely basis the fees provided for above which are charged
by such third party and which are billed periodically.

                                     - 24 -
<PAGE>

                  SECTION 13. ACCOUNTANTS' LETTERS.

                  (a) Deloitte & Touche LLP will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and
will compare those characteristics to the description of the Mortgage Loans
contained in the Prospectus Supplement under the captions "Summary--The Mortgage
Loans" and "The Mortgage Pool" and in Schedule A thereto. The Mortgage Loan
Seller will cooperate with the Purchaser in making available all information and
taking all steps reasonably necessary to permit such accountants to complete the
review and to deliver the letters required of them under the Underwriting
Agreement. Deloitte & Touche LLP will also confirm certain calculations as set
forth under the caption "Yield, Prepayment and Maturity Considerations" in the
Prospectus Supplement.

                  (b) To the extent statistical information with respect to the
Mortgage Loan Seller's servicing portfolio is included in the Prospectus
Supplement under the caption "Servicing of the Mortgage Loans--The Master
Servicer--Delinquency and Foreclosure Experience of EMC," a letter from the
certified public accountant for the Mortgage Loan Seller will be delivered to
the Purchaser dated the date of the Prospectus Supplement, in the form
previously agreed to by the Mortgage Loan Seller and the Purchaser, with respect
to such statistical information.

                  SECTION 14. INDEMNIFICATION.

                  (a) The Mortgage Loan Seller shall indemnify and hold harmless
the Purchaser and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the MORTGAGE LOAN SELLER'S INFORMATION
as identified in EXHIBIT 4, the omission to state in the Prospectus Supplement
or Prospectus (or any amendment thereof or supplement thereto approved by the
Mortgage Loan Seller and in which additional Mortgage Loan Seller's Information
is identified), in reliance upon and in conformity with Mortgage Loan Seller's
Information a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty assigned or made by the
Mortgage Loan Seller in Section 7 or Section 9 hereof being, or alleged to be,
untrue or incorrect, or (iii) any failure by the Mortgage Loan Seller to perform
its obligations under this Agreement; and the Mortgage Loan Seller shall
reimburse the Purchaser and each other indemnified party for any legal and other
expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action.

                  The foregoing indemnity agreement is in addition to any
liability which the Mortgage Loan Seller otherwise may have to the Purchaser or
any other such indemnified party.

                  (b) The Purchaser shall indemnify and hold harmless the
Mortgage Loan Seller and its respective directors, officers and controlling
persons (as defined in Section 15 of the Securities Act) from and against any
loss, claim, damage or liability or action in respect thereof, to which they or
any of them may become subject, under the Securities Act or otherwise,

                                     - 25 -
<PAGE>

insofar as such loss, claim, damage, liability or action arises out of, or is
based upon (i) any untrue statement of a material fact contained in the
PURCHASER'S INFORMATION as identified in EXHIBIT 5, the omission to state in the
Prospectus Supplement or Prospectus (or any amendment thereof or supplement
thereto approved by the Purchaser and in which additional Purchaser's
Information is identified), in reliance upon and in conformity with the
Purchaser's Information, a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made, not misleading, (ii) any representation or warranty made by the
Purchaser in Section 10 hereof being, or alleged to be, untrue or incorrect, or
(iii) any failure by the Purchaser to perform its obligations under this
Agreement; and the Purchaser shall reimburse the Mortgage Loan Seller, and each
other indemnified party for any legal and other expenses reasonably incurred by
them in connection with investigating or defending or preparing to defend any
such loss, claim, damage, liability or action. The foregoing indemnity agreement
is in addition to any liability which the Purchaser otherwise may have to the
Mortgage Loan Seller, or any other such indemnified party.

                  (c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 14 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the
indemnified party promptly (but, in any event, within 30 days) after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have reasonably
concluded that there is a conflict of interest between itself or themselves and
the indemnifying party in the conduct of the defense of any claim or that the
interests of the indemnified party or parties are not substantially co-extensive
with those of the indemnifying party (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties (PROVIDED, HOWEVER, that the
indemnifying party shall be liable only for the fees and expenses of one counsel
in addition to one local counsel in the jurisdiction involved. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement or any claim or action effected without its written
consent; PROVIDED, HOWEVER, that such consent was not unreasonably withheld.

                  (d) If the indemnification provided for in paragraphs (a) and
(b) of this Section 14 shall for any reason be unavailable to an indemnified
party in respect of any loss,

                                     - 26 -
<PAGE>

claim, damage or liability, or any action in respect thereof, referred to in
Section 14, then the indemnifying party shall in lieu of indemnifying the
indemnified party contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the relative
benefits received by the Mortgage Loan Seller on the one hand and the Purchaser
on the other from the purchase and sale of the Mortgage Loans, the offering of
the Certificates and the other transactions contemplated hereunder. No person
found liable for a fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for such fraudulent
misrepresentation.

                  (e) The parties hereto agree that reliance by an indemnified
party on any publicly available information or any information or directions
furnished by an indemnifying party shall not constitute negligence, bad faith or
willful misconduct by such indemnified party.

                  SECTION 15. NOTICES. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, 909 Hidden Ridge Drive, Suite 200 Irving,
Texas 75038, (Telecopy: (972-444-2880)), and notices to the Purchaser shall be
directed to Bear Stearns Asset Backed Securities I LLC, 383 Madison Avenue, New
York, New York 10179, (Telecopy: (212-272-7206)), Attention: Chief Counsel; or
to any other address as may hereafter be furnished by one party to the other
party by like notice. Any such demand, notice or communication hereunder shall
be deemed to have been received on the date received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt) provided that it is received on a business day
during normal business hours and, if received after normal business hours, then
it shall be deemed to be received on the next business day.

                  SECTION 16. TRANSFER OF MORTGAGE LOANS. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Trustee without the consent of the Mortgage Loan Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; provided, however, the Purchaser shall
remain entitled to the benefits set forth in Sections 12, 14 and 18 hereto and
as provided in Section 2(a). Notwithstanding the foregoing, the sole and
exclusive right and remedy of the Trustee with respect to a breach of
representation or warranty of the Mortgage Loan Seller shall be the cure,
purchase or substitution obligations of the Mortgage Loan Seller contained in
Sections 5 and 7 hereof.

                  SECTION 17. TERMINATION. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 11(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 11(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of-pocket expenses incurred by the other in connection with the transactions
contemplated by this Agreement. In the event of a termination pursuant to clause
(a), each party shall be responsible for its own expenses.

                                     - 27 -
<PAGE>

                  SECTION 18. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by
the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans
to the Purchaser, each of the Mortgage Loan Seller's and Encore's
representations and warranties contained herein with respect to the Mortgage
Loans shall be deemed to relate to the Mortgage Loans actually delivered to the
Purchaser and included in the Final Mortgage Loan Schedule and any Replacement
Mortgage Loan and not to those Mortgage Loans deleted from the Preliminary
Mortgage Loan Schedule pursuant to Section 3 hereof prior to the Closing.

                  SECTION 19. SEVERABILITY. If any provision of this Agreement
shall be prohibited or invalid under applicable law, this Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.

                  SECTION 20. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.

                  SECTION 21. AMENDMENT. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.

                  SECTION 22. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.

                  SECTION 23. FURTHER ASSURANCES. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.

                  SECTION 24. SUCCESSORS AND ASSIGNS.

                  This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 14 hereof, Bear
Stearns, and their directors, officers and controlling persons (within the
meaning of federal securities laws), to the extent of its rights as a third
party beneficiary hereunder. The Mortgage Loan Seller acknowledges and agrees
that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and warranties respecting the Mortgage Loans) to the Trustee. Any person into
which the Mortgage Loan Seller may be merged or consolidated (or any person
resulting from any merger or consolidation involving the Mortgage Loan Seller),
any person resulting from a change in form of the Mortgage Loan Seller or any
person succeeding to the business of the Mortgage Loan Seller, shall be
considered the "successor" of the Mortgage Loan Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper or any
further act or consent on the part of any party hereto. Except as provided in
the

                                     - 28 -
<PAGE>

two preceding sentences, this Agreement cannot be assigned, pledged or
hypothecated by either party hereto without the written consent of the other
parties to this Agreement and any such assignment or purported assignment shall
be deemed null and void.

SECTION 25. THE MORTGAGE LOAN SELLER. The Mortgage Loan Seller will keep in full
force and effect its existence, all rights and franchises as a corporation under
the laws of the State of its incorporation and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is necessary to perform its obligations under this
Agreement.

SECTION 26. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding between the parties with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings, inducements
and conditions, express or implied, oral or written, of any nature whatsoever
with respect to the subject matter hereof.

SECTION 27. NO PARTNERSHIP. Nothing herein contained shall be deemed or
construed to create a partnership or joint venture between the parties hereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     - 29 -
<PAGE>

                                                         - 1 -

                  IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective duly authorized officers as of the date
first above written.

                                     EMC MORTGAGE CORPORATION

                                     By:__________________________________
                                     Name:  Sue Stepanek
                                     Title: Executive Vice President

                                     BEAR STEARNS ASSET BACKED
                                     SECURITIES I LLC

                                     By:__________________________________
                                     Name:  Joseph T. Jurkowski, Jr.
                                     Title: Vice President

                                     ENCORE CREDIT CORP.

                                     By:__________________________________
                                     Name:________________________________
                                     Title:_______________________________

<PAGE>

                                    EXHIBIT 1
                                    ---------
                            CONTENTS OF MORTGAGE FILE
                            -------------------------

         With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its designee, and which shall be delivered to the Purchaser or its
designee pursuant to the terms of this Agreement.

                           (i) The original Mortgage Note, including any riders
                  thereto, endorsed without recourse to the order of "LaSalle
                  Bank National Association", as Trustee for certificateholders
                  of Bear Stearns Asset Backed Securities I LLC Asset Backed
                  Certificates, Series 2004-HE5," and showing to the extent
                  available to the Mortgage Loan Seller an unbroken chain of
                  endorsements from the original payee thereof to the Person
                  endorsing it to the Trustee;

                           (ii) the original Mortgage and, if the related
                  Mortgage Loan is a MOM Loan, noting the presence of the MIN
                  and language indicating that such Mortgage Loan is a MOM Loan,
                  which shall have been recorded (or if the original is not
                  available, a copy), with evidence of such recording indicated
                  thereon (or if clause (x) in the proviso below applies, shall
                  be in recordable form);

                           (iii) unless the Mortgage Loan is a MOM Loan, the
                  assignment (either an original or a copy, which may be in the
                  form of a blanket assignment if permitted in the jurisdiction
                  in which the Mortgaged Property is located) to the Trustee of
                  the Mortgage with respect to each Mortgage Loan in the name of
                  "LaSalle Bank National Association", as Trustee for
                  certificateholders of Bear Stearns Asset Backed Securities I
                  LLC Asset Backed Certificates, Series 2004-HE5," which shall
                  have been recorded (or if clause (x) in the proviso below
                  applies, shall be in recordable form);

                           (iv) an original or a copy of all intervening
                  assignments of the Mortgage, if any, to the extent available
                  to the Mortgage Loan Seller, with evidence of recording
                  thereon;

                           (v) the original policy of title insurance or
                  mortgagee's certificate of title insurance or commitment or
                  binder for title insurance, if available, or a copy thereof,
                  or, in the event that such original title insurance policy is
                  unavailable, a photocopy thereof, or in lieu thereof, a
                  current lien search on the related Mortgaged Property and

                           (vi) originals or copies of all available assumption,
                  modification or substitution agreements, if any; provided,
                  however, that in lieu of the foregoing, the Mortgage Loan
                  Seller may deliver the following documents, under the
                  circumstances set forth below: x) if any Mortgage, assignment
                  thereof to the Trustee or intervening assignments thereof have
                  been delivered or are being delivered to recording offices for
                  recording and have not been returned in time to permit their
                  delivery as specified above, the Purchaser may deliver a true
                  copy

                                      E-1-1
<PAGE>

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

                                     E-1-2
<PAGE>

                                    EXHIBIT 2
                                    ---------
                                   [Reserved]

                                      E-2-1
<PAGE>

                                    EXHIBIT 3
                                    ---------
                       MORTGAGE LOAN SCHEDULE INFORMATION
                       ----------------------------------

         The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:

                           (i) the loan number;

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

                           (iii) the Servicing Fee Rate;

                           (iv) the Trustee Fee Rate;

                           (v) the LPMI Fee, if applicable;

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

                           (vii) the maturity date;

                           (viii) the original principal balance;

                           (ix) the Cut-off Date Principal Balance;

                           (x) the original term;

                           (xi) the remaining term;

                           (xii) the property type;

                           (xiii) the MIN with respect to each MOM Loan;

                           (xiv) with respect to each Adjustable Rate Mortgage
                  Loan, the Minimum Mortgage Rate;

                           (xv) with respect to each Adjustable Rate Mortgage
                  Loan, the Maximum Mortgage Rate;

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

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

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

                           (xix) the Loan Group; and

                                      E-3-1
<PAGE>

                           (xx) a code indicating whether such Mortgage Loan is
                  a first lien Mortgage Loan or a second lien Mortgage Loan.

                                      E-3-2
<PAGE>

                                    EXHIBIT 4
                                    ---------
                       MORTGAGE LOAN SELLER'S INFORMATION
                       ----------------------------------

         All information in the Prospectus Supplement described under the
following captions: "SUMMARY -- The Mortgage Loans," "THE MORTGAGE POOL" and
"SCHEDULE A -- Mortgage Loan Statistical Data."

                                      E-4-1
<PAGE>

                                    EXHIBIT 5
                                    ---------
                             PURCHASER'S INFORMATION
                             -----------------------

         All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.

                                      E-5-1
<PAGE>

                                    EXHIBIT 6
                                    ---------
                             SCHEDULE OF LOST NOTES
                             ----------------------

                             Available Upon Request

                                      E-6-1
<PAGE>

                                   SCHEDULE A
                                   ----------

                 REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
                 -----------------------------------------------

                               PUBLIC CERTIFICATES
                               -------------------

<TABLE>
<CAPTION>

                 Class                                 Moody's                                 S&P
                 -----                                 -------                                 ---
<S>                                                      <C>                                   <C>
                 I-A-1                                   Aaa                                   AAA
                 I-A-2                                   Aaa                                   AAA
                 II-A                                    Aaa                                   AAA
                 III-A                                   Aaa                                   AAA
                  M-1                                    Aa2                                   AA+
                  M-2                                     A2                                   AA-
                  M-3                                     A3                                    A
                  M-4                                    Baa1                                   A-
                  M-5                                    Baa2                                  BBB+
                  M-6                                    Baa3                                  BBB

None of the above ratings has been lowered, qualified or withdrawn since the
dates of issuance of such ratings by the Rating Agencies.

<CAPTION>

                              PRIVATE CERTIFICATES
                              --------------------

                 Class                                 Moody's                                 S&P
                 -----                                 -------                                 ---
<S>                                                   <C>                                   <C>
                  M-7                                    Ba2                                   BBB-
                  CE                                  Not Rated                             Not Rated
                   P                                  Not Rated                             Not Rated
                  R-1                                 Not Rated                             Not Rated
                  R-2                                 Not Rated                             Not Rated
                  RX                                  Not Rated                             Not Rated
</TABLE>

                                       A-1
<PAGE>

                                    EXHIBIT 7

         APPENDIX E: 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

STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
------------------                                    ----------------------------------------------------
<S>                                                   <C>
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
</TABLE>

                                     E-7-1
<PAGE>

STANDARD & POOR'S HIGH-COST LOAN CATEGORIZATION

<TABLE>
<CAPTION>

STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
------------------                                    ----------------------------------------------------
<S>                                                   <C>
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
</TABLE>

                                     E-7-2
<PAGE>

<TABLE>
<CAPTION>

STANDARD & POOR'S HIGH-COST LOAN CATEGORIZATION

STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
------------------                                    ----------------------------------------------------
<S>                                                   <C>
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
</TABLE>

                                     E-7-3
<PAGE>

<TABLE>
<CAPTION>

<S>                                                   <C>
STANDARD & POOR'S HIGH-COST LOAN CATEGORIZATION

STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
------------------                                    ----------------------------------------------------

West Virginia                                         West Virginia Mortgage Loan Act Loan

STANDARD & POOR'S COVERED LOAN CATEGORIZATION
---------------------------------------------

STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
------------------                                    ----------------------------------------------------

Georgia (Oct. 1, 2002-March 6, 2003)                  Covered Loan
New Jersey                                            Covered Home Loan

STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------

STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
------------------                                    ----------------------------------------------------

Georgia (Oct. 1, 2002-March 6, 2003)                  Home Loan
New Jersey                                            Home Loan
</TABLE>

                                     E-7-4
<PAGE>

<TABLE>
<CAPTION>

STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------

STATE/JURISDICTION                                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
------------------                                    ----------------------------------------------------
<S>                                                   <C>
New Mexico                                            Home Loan
North Carolina                                        Consumer Home Loan
Oakland, Calif.                                       Home Loan
South Carolina                                        Consumer Home Loan
</TABLE>

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