Document:

EXHIBIT 4.1

                          IMPAC CMB TRUST SERIES 2004-7

                                     Issuer

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY

                                Indenture Trustee

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

                                    INDENTURE

                            Dated as of July 29, 2004

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

                        COLLATERALIZED ASSET-BACKED BONDS

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                                TABLE OF CONTENTS

SECTION                                                                     PAGE
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ARTICLE I

Definitions
         Section 1.01  DEFINITIONS ........................................    3
         Section 1.02  INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT ..    3
         Section 1.03  RULES OF CONSTRUCTION ..............................    3

Bonds
         Section 2.01  FORM ...............................................    5
         Section 2.02  EXECUTION, AUTHENTICATION AND DELIVERY .............    5
         Section 2.03  ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE ..    6
         Section 2.04  ACCEPTANCE OF DERIVATIVE CONTRACTS .................    7
         Section 2.05  CONVEYANCE OF THE GROUP 1 SUBSEQUENT MORTGAGE LOANS     7
         Section 2.06  CONVEYANCE OF THE GROUP 2 SUBSEQUENT MORTGAGE LOANS    10

Covenants
         Section 3.01  COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE
                       LOANS ..............................................   14
         Section 3.02  MAINTENANCE OF OFFICE OR AGENCY ....................   14
         Section 3.03  MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT   14
         Section 3.04  EXISTENCE ..........................................   15
         Section 3.05  PAYMENT OF PRINCIPAL AND INTEREST ..................   16
         Section 3.06  PROTECTION OF TRUST ESTATE .........................   22
         Section 3.07  OPINIONS AS TO TRUST ESTATE ........................   23
         Section 3.08  PERFORMANCE OF OBLIGATIONS .........................   23
         Section 3.09  NEGATIVE COVENANTS .................................   24
         Section 3.10  ANNUAL STATEMENT AS TO COMPLIANCE ..................   24
         Section 3.11  REPRESENTATIONS AND WARRANTIES CONCERNING THE
                       MORTGAGE LOANS .....................................   25
         Section 3.12  AMENDMENTS TO SERVICING AGREEMENT ..................   25
         Section 3.13  MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE
                       TRUSTEE ............................................   25
         Section 3.14  INVESTMENT COMPANY ACT .............................   25
         Section 3.15  ISSUER MAY CONSOLIDATE, ETC ........................   25
         Section 3.16  SUCCESSOR OR TRANSFEREE ............................   27
         Section 3.17  NO OTHER BUSINESS ..................................   27
         Section 3.18  NO BORROWING .......................................   28
         Section 3.19  GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES ..   28
         Section 3.20  CAPITAL EXPENDITURES ...............................   28
         Section 3.21  DETERMINATION OF BOND INTEREST RATE ................   28
         Section 3.22  RESTRICTED PAYMENTS ................................   28
         Section 3.23  NOTICE OF EVENTS OF DEFAULT ........................   28
         Section 3.24  FURTHER INSTRUMENTS AND ACTS .......................   29
         Section 3.25  STATEMENTS TO BONDHOLDERS ..........................   29

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         Section 3.26  CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE .   29
         Section 3.27  INTEREST COVERAGE ACCOUNTS .........................   30
         Section 3.28  [RESERVED] .........................................   31
         Section 3.29  REPLACEMENT DERIVATIVE CONTRACTS ...................   31
         Section 3.30  [RESERVED] .........................................   32
         Section 3.31  ALLOCATION OF REALIZED LOSSES ......................   32
         Section 3.32  THE GROUP 1 PRE-FUNDING ACCOUNT ....................   32
         Section 3.33  THE GROUP 2 PRE-FUNDING ACCOUNT ....................   33

The Bonds; Satisfaction and Discharge of Indenture
         Section 4.01  THE BONDS ..........................................   36
         Section 4.02  REGISTRATION OF AND LIMITATIONS ON TRANSFER AND
                       EXCHANGE OF BONDS; APPOINTMENT OF BOND REGISTRAR
                       AND CERTIFICATE REGISTRAR ..........................   36
         Section 4.03  MUTILATED, DESTROYED, LOST OR STOLEN BONDS .........   37
         Section 4.04  PERSONS DEEMED OWNERS ..............................   38
         Section 4.05  CANCELLATION .......................................   38
         Section 4.06  BOOK-ENTRY BONDS ...................................   38
         Section 4.07  NOTICES TO DEPOSITORY ..............................   39
         Section 4.08  DEFINITIVE BONDS ...................................   39
         Section 4.09  TAX TREATMENT ......................................   40
         Section 4.10  SATISFACTION AND DISCHARGE OF INDENTURE ............   40
         Section 4.11  APPLICATION OF TRUST MONEY .........................   41
         Section 4.12  [RESERVED] .........................................   41
         Section 4.13  REPAYMENT OF MONIES HELD BY PAYING AGENT ...........   41
         Section 4.14  TEMPORARY BONDS ....................................   41
         Section 4.15  REPRESENTATION REGARDING ERISA .....................   42

ARTICLE V

Default and Remedies
         Section 5.01  EVENTS OF DEFAULT ..................................   43
         Section 5.02  ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT .   43
         Section 5.03  COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
                       BY INDENTURE TRUSTEE ...............................   44
         Section 5.04  REMEDIES; PRIORITIES ...............................   46
         Section 5.05  OPTIONAL PRESERVATION OF THE TRUST ESTATE ..........   48
         Section 5.06  LIMITATION OF SUITS ................................   48
         Section 5.07  UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE
                       PRINCIPAL AND INTEREST .............................   49
         Section 5.08  RESTORATION OF RIGHTS AND REMEDIES .................   49
         Section 5.09  RIGHTS AND REMEDIES CUMULATIVE .....................   49
         Section 5.10  DELAY OR OMISSION NOT A WAIVER .....................   49
         Section 5.11  CONTROL BY BONDHOLDERS .............................   50
         Section 5.12  WAIVER OF PAST DEFAULTS ............................   50
         Section 5.13  UNDERTAKING FOR COSTS ..............................   50
         Section 5.14  WAIVER OF STAY OR EXTENSION LAWS ...................   51

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         Section 5.15  SALE OF TRUST ESTATE ...............................   51
         Section 5.16  ACTION ON BONDS ....................................   53
         Section 5.17  PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS .   53

ARTICLE VI

The Indenture Trustee
         Section 6.01  DUTIES OF INDENTURE TRUSTEE ........................   54
         Section 6.02  RIGHTS OF INDENTURE TRUSTEE ........................   55
         Section 6.03  INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE .............   56
         Section 6.04  INDENTURE TRUSTEE'S DISCLAIMER .....................   56
         Section 6.05  NOTICE OF EVENT OF DEFAULT .........................   56
         Section 6.06  REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX
                       ADMINISTRATION .....................................   56
         Section 6.07  COMPENSATION AND INDEMNITY .........................   56
         Section 6.08  REPLACEMENT OF INDENTURE TRUSTEE ...................   57
         Section 6.09  SUCCESSOR INDENTURE TRUSTEE BY MERGER ..............   58
         Section 6.10  APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE
                       INDENTURE TRUSTEE ..................................   58
         Section 6.11  ELIGIBILITY; DISQUALIFICATION ......................   59
         Section 6.12  PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER ...   59
         Section 6.13  REPRESENTATIONS AND WARRANTIES .....................   59
         Section 6.14  DIRECTIONS TO INDENTURE TRUSTEE ....................   60
         Section 6.15  THE AGENTS .........................................   60

ARTICLE VII

Bondholders' Lists and Reports
         Section 7.01  ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND
                       ADDRESSES OF BONDHOLDERS ...........................   61
         Section 7.02  PRESERVATION OF INFORMATION; COMMUNICATIONS TO
                       BONDHOLDERS ........................................   61
         Section 7.03  REPORTS OF ISSUER ..................................   61
         Section 7.04  REPORTS BY INDENTURE TRUSTEE .......................   62
         Section 7.05  STATEMENTS TO BONDHOLDERS ..........................   62

ARTICLE VIII

Accounts, Disbursements and Releases
         Section 8.01  COLLECTION OF MONEY ................................   65
         Section 8.02  TRUST ACCOUNTS .....................................   65
         Section 8.03  OFFICER'S CERTIFICATE ..............................   65
         Section 8.04  TERMINATION UPON DISTRIBUTION TO BONDHOLDERS .......   66
         Section 8.05  RELEASE OF TRUST ESTATE ............................   66
         Section 8.06  SURRENDER OF BONDS UPON FINAL PAYMENT ..............   66
         Section 8.07  OPTIONAL REDEMPTION OF THE BONDS ...................   66

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ARTICLE IX

Supplemental Indentures
         Section 9.01  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
                       BONDHOLDERS ........................................   68
         Section 9.02  SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS    69
         Section 9.03  EXECUTION OF SUPPLEMENTAL INDENTURES ...............   71
         Section 9.04  EFFECT OF SUPPLEMENTAL INDENTURE ...................   71
         Section 9.05  CONFORMITY WITH TRUST INDENTURE ACT ................   71
         Section 9.06  REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES ......   71

ARTICLE X

Miscellaneous
         Section 10.01  COMPLIANCE CERTIFICATES AND OPINIONS, ETC .........   72
         Section 10.02  FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE ..   73
         Section 10.03  ACTS OF BONDHOLDERS ...............................   74
         Section 10.04  NOTICES ETC., TO INDENTURE TRUSTEE ISSUER AND
                        RATING AGENCIES ...................................   74
         Section 10.05  NOTICES TO BONDHOLDERS; WAIVER ....................   75
         Section 10.06  CONFLICT WITH TRUST INDENTURE ACT .................   76
         Section 10.07  EFFECT OF HEADINGS ................................   76
         Section 10.09  SEPARABILITY ......................................   76
         Section 10.10  [RESERVED] ........................................   76
         Section 10.11  LEGAL HOLIDAYS ....................................   76
         Section 10.12  GOVERNING LAW .....................................   76
         Section 10.13  COUNTERPARTS ......................................   76
         Section 10.14  RECORDING OF INDENTURE ............................   76
         Section 10.15  ISSUER OBLIGATION .................................   77
         Section 10.16  NO PETITION .......................................   77
         Section 10.17  INSPECTION ........................................   77

ARTICLE XI

Certain Matters Regarding the Bond Insurer
         Section 11.01  RIGHTS OF THE BOND INSURER TO EXERCISE THE RIGHTS
                        OF THE CLASS 2-A BONDS ............................   78
         Section 11.02  CLAIMS UPON THE BOND INSURANCE POLICY; INSURANCE
                        ACCOUNT ...........................................   78
         Section 11.03  EFFECT OF PAYMENTS BY THE BOND INSURER;
                        SUBROGATION .......................................   79
         Section 11.04  NOTICES AND INFORMATION TO THE BOND INSURER .......   79
         Section 11.05  TRUSTEE TO HOLD BOND INSURANCE POLICY .............   79

                  EXHIBITS

         Exhibit A-1      --        Form of Class [_-A-_] Bonds
         Exhibit A-2      --        Form of Class M-[_]-[_] Bonds
         Exhibit B        --        Mortgage Loan Schedule
         Exhibit C        --        Initial Certification

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         Exhibit D        --        Final Certification
         Exhibit E        --        Derivative Contracts
         Exhibit F        --        Special Certificate Cap Contract
         Exhibit G        --        Form of Group [_] Subsequent Transfer
                                      Instrument
         Appendix A       --        Definitions

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            This Indenture, dated as of July 29, 2004, is entered into between
Impac CMB Trust Series 2004-7, a Delaware statutory trust, as Issuer (the
"Issuer"), and Deutsche Bank National Trust Company, a national banking
association, as Indenture Trustee (the "Indenture Trustee").

                                WITNESSETH THAT:

            Each party hereto agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's
Collateralized Asset-Backed Bonds, Series 2004-7 (the "Bonds").

                                 GRANTING CLAUSE

            The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as trustee for the benefit of the Holders of the Bonds, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created by (a) the Mortgage Loans, Eligible Substitute Mortgage Loans and the
proceeds thereof and all rights under the Related Documents; (b) all funds on
deposit from time to time in the Collection Account allocable to the Mortgage
Loans excluding any investment income from such funds; (c) all funds on deposit
from time to time in the Payment Account and in all proceeds thereof; (d) all
funds on deposit from time to time in each of the Group 1 Pre-Funding Account
and Group 2 Pre-Funding Account and in all proceeds thereof; (e) all rights
under (i) the Mortgage Loan Purchase Agreement as assigned to the Issuer, with
respect to the Initial Mortgage Loans, and each Group 1 Subsequent Mortgage Loan
Purchase Agreement and Group 2 Subsequent Mortgage Loan Purchase Agreement as
assigned to the Issuer, with respect to the Group 1 Subsequent Mortgage Loans
and Group 2 Subsequent Mortgage Loans, respectively, (ii) the Servicing
Agreement and any Subservicing Agreements, (iii) any title, hazard and primary
insurance policies with respect to the Mortgaged Properties and (iv) the rights
with respect to the Derivative Contracts and the Special Certificate Cap
Contract as assigned to the Issuer; and (e) all present and future claims,
demands, causes and choses in action in respect of any or all of the foregoing
and all payments on or under, and all proceeds of every kind and nature
whatsoever in respect of, any or all of the foregoing and all payments on or
under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").

            The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Bonds, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.

            The Indenture Trustee, as trustee on behalf of the Holders of the
Bonds, acknowledges such Grant, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein. The Indenture Trustee agrees that it will
hold the Bond Insurance Policy in trust and that it will hold any proceeds of
any claim made

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upon the Bond Insurance Policy solely for the use and benefit of the Holders of
the Class 2-A Bonds in accordance with the terms hereof and the terms of the
Bond Insurance Policy.

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                                    ARTICLE I

                                   Definitions

      Section 1.01 DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.

      Section 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the Trust Indenture Act (the "TIA"), the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:

            "Commission" means the Securities and Exchange Commission.

            "indenture securities" means the Bonds.

            "indenture security holder" means a Bondholder.

            "indenture to be qualified" means this Indenture.

            "indenture trustee" or "institutional trustee" means the Indenture
      Trustee.

            "obligor" on the indenture securities means the Issuer and any other
      obligor on the indenture securities.

      All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rules and
have the meanings assigned to them by such definitions.

      Section 1.03 RULES OF CONSTRUCTION. Unless the context otherwise requires:

                  (i) a term has the meaning assigned to it;

                  (ii) an accounting term not otherwise defined has the meaning
      assigned to it in accordance with generally accepted accounting principles
      as in effect from time to time;

                  (iii) "or" is not exclusive;

                  (iv) "including" means including without limitation;

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                  (v) words in the singular include the plural and words in the
      plural include the singular; and

                  (vi) any agreement, instrument or statute defined or referred
      to herein or in any instrument or certificate delivered in connection
      herewith means such agreement, instrument or statute as from time to time
      amended, modified or supplemented and includes (in the case of agreements
      or instruments) references to all attachments thereto and instruments
      incorporated therein; references to a Person are also to its permitted
      successors and assigns.

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                                   ARTICLE II

                           Original Issuance of Bonds

         Section 2.01 FORM. The Class A and Class M Bonds, together with the
Indenture Trustee's certificate of authentication, shall be in substantially the
form set forth in Exhibits A-1 and A-2 to this Indenture, respectively, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture.

         The Bonds shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders).

         The terms of the Bonds set forth in Exhibits A-1 and A-2 to this
Indenture are part of the terms of this Indenture.

         Section 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. The Bonds shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Bonds may be manual or
facsimile.

         Bonds bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Bonds or did not hold
such offices at the date of such Bonds.

         The Indenture Trustee shall upon Issuer Request authenticate and
deliver the Class 1-A-1, Class 1-A-2, Class 2-A, Class M-1-1, Class M-2-1, Class
M-3-1, Class M-4-1, Class M-5-1, Class M-1-2, Class M-2-2, Class M-3-2, Class
M-4-2 and Class M-5-2 Bonds for original issue in an aggregate initial principal
amount of $2,200,000,000. The Class 1-A-1 Bonds shall be issued in an aggregate
initial principal amount of $1,047,174,000, the Class 1-A-2 Bonds shall be
issued in an aggregate initial principal amount of $116,352,000, the Class 2-A
Bonds shall be issued in an aggregate initial principal amount of $772,477,000,
the Class M-1-1 Bonds shall be issued in an aggregate initial principal amount
of $23,139,000, the Class M-2-1 Bonds shall be issued in an aggregate initial
principal amount of $36,360,000, the Class M-3-1 Bonds shall be issued in an
aggregate initial principal amount of $26,444,000, the Class M-4-1 Bonds shall
be issued in an aggregate initial principal amount of $36,360,000, the Class
M-5-1 Bonds shall be issued in an aggregate initial principal amount of
$36,360,000, Class M-1-2 Bonds shall be issued in an aggregate initial principal
amount of $15,361,000, the Class M-2-2 Bonds shall be issued in an aggregate
initial principal amount of $24,139,000, the Class M-3-2 Bonds shall be issued
in an aggregate initial principal amount of $17,556,000, the Class M-4-2 Bonds
shall be issued in an aggregate initial principal amount of $24,139,000 and the
Class M-5-2 Bonds shall be issued in an aggregate initial principal amount of
$24,139,000.

         Each of the Bonds shall be dated the date of its authentication. The
Bonds shall be issuable as registered Bonds and the Bonds shall be issuable in
the minimum initial Bond Principal Balances of $25,000 and in integral multiples
of $1 in excess thereof.

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         No Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Bond a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Bond shall be conclusive
evidence, and the only evidence, that such Bond has been duly authenticated and
delivered hereunder.

      Section 2.03 ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE. (a) The
Indenture Trustee acknowledges receipt of, subject to the exceptions it notes
pursuant to the procedures described below, the documents (or certified copies
thereof) referred to in Section 2.1(b) of the Mortgage Loan Purchase Agreement,
and declares that it holds and will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Estate as agent for the Indenture Trustee in trust for the use and benefit
of all present and future Holders of the Bonds. No later than 45 days after the
Closing Date, with respect to the Initial Mortgage Loans, or the applicable
Subsequent Transfer Date, with respect to the related Group 1 Subsequent
Mortgage Loans and Group 2 Subsequent Mortgage Loans (or, with respect to any
Eligible Substitute Mortgage Loan, within 5 days after the receipt by the
Indenture Trustee thereof and, with respect to any documents received beyond 45
days after the Closing Date, promptly thereafter), the Indenture Trustee agrees,
for the benefit of the Bondholders, to review each Mortgage File delivered to it
and to execute and deliver, or cause to be executed and delivered, to the
Seller, the Indenture Trustee and the Master Servicer an Initial Certification
in the form annexed hereto as Exhibit C. In conducting such review, the
Indenture Trustee will ascertain whether all required documents described in
Section 2.1(b) of (i) the Mortgage Loan Purchase Agreement, with respect to the
Initial Mortgage Loans, and (ii) the applicable Group 1 Subsequent Mortgage Loan
Purchase Agreements and Group 2 Subsequent Mortgage Loan Purchase Agreements,
with respect to the related Group 1 Subsequent Mortgage Loans and Group 2
Subsequent Mortgage Loans, respectively, 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 it has
received, as identified in Exhibit B to this Indenture, as supplemented
(PROVIDED, HOWEVER, that with respect to those documents described in subclause
(b)(vii) of such section, the Indenture Trustee's obligations shall extend only
to documents actually delivered pursuant to such subclause). In performing any
such review, the Indenture Trustee 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 Indenture Trustee 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 to this Indenture
or to appear to be defective on its face, the Indenture Trustee shall promptly
notify the Seller of such finding and the Seller's obligation to cure such
defect or repurchase or substitute for the related Mortgage Loan. To the extent
the Indenture Trustee has not received a Mortgage File with respect to any of
the Initial Mortgage Loans by the Closing Date, or any of the related Group 1
Subsequent Mortgage Loans and Group 2 Subsequent Mortgage Loans by the
applicable Subsequent Transfer Date, the Indenture Trustee shall not require the
deposit of cash into the Payment Account or any other account to cover the
amount of that Mortgage Loan and shall solely treat such Mortgage Loan as if it
were in breach of a representation or warranty; provided that the aggregate
Stated Principal Balance of such Mortgage Loans does not exceed 1% of the sum of
the Cut-off Date Balance and the Group 1 Original Pre-Funded Amount and Group 2
Original Pre-Funded Amount.

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         (b) No later than 180 days after the Closing Date (with respect to the
Initial Mortgage Loans) or the applicable Subsequent Transfer Date (with respect
to the related Group 1 Subsequent Mortgage Loans and Group 2 Subsequent Mortgage
Loans), the Indenture Trustee will review, for the benefit of the Bondholders,
the Mortgage Files and will execute and deliver or cause to be executed and
delivered to the Seller and the Indenture Trustee, a Final Certification in the
form annexed hereto as Exhibit D. In conducting such review, the Indenture
Trustee will ascertain whether an original of each document described in
subclauses (b)(ii)-(iv) of Section 2.1 of (i) the Mortgage Loan Purchase
Agreement, with respect to the Initial Mortgage Loans, and (ii) any Group 1 or
Group 2 Subsequent Mortgage Loan Purchase Agreement, with respect to the related
Group 1 Subsequent Mortgage Loans and Group 2 Subsequent Mortgage Loans,
required to be recorded has been returned from the recording office with
evidence of recording thereon or a certified copy has been obtained from the
recording office. If the Indenture Trustee finds any document constituting part
of the Mortgage File 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 to this Indenture or to appear
defective on its face, the Indenture Trustee shall promptly notify the Seller.

         (c) Upon deposit of the Repurchase Price in the Payment Account, the
Indenture Trustee shall release to the Seller the related Mortgage File and
shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by the Seller as are necessary to vest in the Seller
title to and rights under the related Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which the deposit of the Repurchase Price
in the Payment Account was received by the Indenture Trustee. The Indenture
Trustee shall amend the applicable Mortgage Loan Schedule to reflect such
repurchase and shall promptly notify the Master Servicer, the Rating Agencies
and the Indenture Trustee of such amendment.

         Section 2.04 ACCEPTANCE OF DERIVATIVE CONTRACTS AND SPECIAL CERTIFICATE
CAP CONTRACT BY INDENTURE TRUSTEE. The Indenture Trustee acknowledges receipt of
the Derivative Contracts and the Special Certificate Cap Contract and declares
that it holds and will continue to hold these documents and any amendments,
replacements or supplements thereto and all other assets of the Trust Estate as
Indenture Trustee in trust for the use and benefit of all present and future
Holders of the Bonds. The Indenture Trustee shall enforce the Derivative
Contracts and the Special Certificate Cap Contract in accordance with their
terms.

         Section 2.05 CONVEYANCE OF THE GROUP 1 SUBSEQUENT MORTGAGE LOANS. (a)
Subject to the conditions set forth in paragraph (b) below and in consideration
of the Indenture Trustee's delivery on the applicable Subsequent Transfer Dates,
to or upon the written order of the Depositor, of all or a portion of the
balance of funds in the Group 1 Pre-Funding Account, the Depositor shall on any
Group 1 Subsequent Transfer Date sell, transfer, assign, set over and convey
without recourse to the Trust Estate, but subject to the other terms and
provisions of this Agreement, all of the right, title and interest of the
Depositor in and to (i) the related Group 1 Subsequent Mortgage Loans identified
on the Mortgage Loan Schedule attached to the related Group 1 Subsequent
Transfer Instrument delivered by the Depositor on such Group 1 Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date (with respect to the Group 1 Subsequent Mortgage Loans) and all
collections in respect of interest and principal due after the Subsequent
Cut-off Date and (iii) all items with respect to such Group 1 Subsequent
Mortgage Loans to be delivered pursuant

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to Section 2.03 and the other items in the related Mortgage Files; PROVIDED,
HOWEVER, that the Depositor reserves and retains all right, title and interest
in and to principal received and interest accruing on the Group 1 Subsequent
Mortgage Loans prior to the related Subsequent Cut-off Date. The transfer to the
Indenture Trustee for deposit in the Trust Estate by the Depositor of the Group
1 Subsequent Mortgage Loans identified on the Mortgage Loan Schedule shall be
absolute and is intended by the Depositor, the Master Servicer, the Indenture
Trustee and the Bondholders to constitute and to be treated as a sale of the
Group 1 Subsequent Mortgage Loans by the Depositor to the Trust Estate. The
related Mortgage File for each Group 1 Subsequent Mortgage Loan shall be
delivered to the Indenture Trustee at least three (3) Business Days prior to the
related Subsequent Transfer Date.

         The purchase price paid by the Indenture Trustee from amounts released
from the Group 1 Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Group 1 Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor).

         (b) The Depositor shall transfer to the Indenture Trustee for deposit
in the Trust Estate the applicable Group 1 Subsequent Mortgage Loans and the
other property and rights related thereto as described in paragraph (a) above,
and the Indenture Trustee shall release such applicable funds from the Group 1
Pre-Funding Account, only upon the satisfaction of each of the following
conditions on or prior to the related Group 1 Subsequent Transfer Date:

            (i) the Depositor shall have provided the Indenture Trustee, the
      Bond Insurer and the Rating Agencies with a timely Addition Notice and
      shall have provided any information reasonably requested by the Indenture
      Trustee with respect to the Group 1 Subsequent Mortgage Loans;

            (ii) the Depositor shall have delivered to the Indenture Trustee a
      duly executed Group 1 Subsequent Transfer Instrument (which the Indenture
      Trustee is hereby authorized to execute), which shall include a Mortgage
      Loan Schedule listing the Group 1 Subsequent Mortgage Loans, and the
      Master Servicer, in its capacity as Originator, shall have delivered a
      computer file containing such Mortgage Loan Schedule to the Indenture
      Trustee at least three (3) Business Days prior to the related Group 1
      Subsequent Transfer Date;

            (iii) as of each Group 1 Subsequent Transfer Date, as evidenced by
      delivery of the related Group 1 Subsequent Transfer Instrument,
      substantially in the form of Exhibit G, the Depositor shall not be
      insolvent nor shall it have been rendered insolvent by such transfer nor
      shall it be aware of any pending insolvency;

            (iv) such sale and transfer shall not result in a material adverse
      tax consequence to the Trust Estate or to the Bondholders;

            (v) the Funding Period shall not have terminated;

                                        8

<PAGE>

            (vi) the Depositor shall not have selected the applicable Group 1
      Subsequent Mortgage Loans in a manner that it believed to be adverse to
      the interests of the Bondholders or the Bond Insurer;

            (vii) the Depositor shall have delivered to the Indenture Trustee
      the related Group 1 Subsequent Transfer Instrument confirming the
      satisfaction of the conditions precedent specified in this Section 2.05
      and, pursuant to such Group 1 Subsequent Transfer Instrument, assigned to
      the Indenture Trustee without recourse for the benefit of the Bondholders
      all the right, title and interest of the Depositor, in, to and under the
      applicable Group 1 Subsequent Mortgage Loan Purchase Agreement, to the
      extent of the related Group 1 Subsequent Mortgage Loans; and

            (viii) the Depositor shall have delivered to the Indenture Trustee
      an Opinion of Counsel addressed to the Indenture Trustee and the Rating
      Agencies with respect to the transfer of the applicable Group 1 Subsequent
      Mortgage Loans substantially in the form of the Opinion of Counsel
      delivered to the Indenture Trustee on the Closing Date regarding the
      validity of the conveyance and the true sale of such Group 1 Subsequent
      Mortgage Loans.

         (c) The obligation of the Trust Estate to purchase a Group 1 Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in the immediately following paragraph and the accuracy
of the following representations and warranties with respect to each such Group
1 Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Mortgage Loan may not be 30 or more days delinquent as of the
last day of the month preceding the Subsequent Cut-off Date; (ii) the original
term to stated maturity of such Mortgage Loan will be 360 months; (iii) each
Group 1 Subsequent Mortgage Loan must be an adjustable-rate mortgage loan with a
first lien on the related mortgaged property; (iv) no Group 1 Subsequent
Mortgage Loan will have a first payment date occurring after November 1, 2004;
(v) the latest maturity date of any Group 1 Subsequent Mortgage Loan will be no
later than October 1, 2034; (vi) none of the Group 1 Subsequent Mortgage Loans
will be a buydown loan; (vii) such Mortgage Loan will have a credit score of not
less than 500; (viii) such Mortgage Loan will have a Mortgage Rate as of the
applicable Subsequent Cut-off Date ranging from approximately 2.375% per annum
to approximately 10.000% per annum; (ix) none of the Group 1 Subsequent Mortgage
loans will be a New York State "high cost" loan; and (x) such Group 1 Subsequent
Mortgage Loan shall have been underwritten in accordance with the criteria set
forth under "The Mortgage Pool--Underwriting Standards" in the Prospectus
Supplement.

         (d) In addition, following the purchase of any Group 1 Subsequent
Mortgage Loan by the Trust, the applicable Group 1 Subsequent Mortgage Loans
will as of the related Subsequent Cut-off Date: (i) have a weighted average
Mortgage Rate ranging from 5.100% to 6.250% per annum; (ii) consist of Mortgage
Loans with prepayment charges representing no less than approximately 52% of the
Pool Balance; (iii) have a weighted average credit score ranging from 680 to
720; (iv) have no more than 70% of such Mortgage Loans concentrated in the state
of California; (v) have no less than 75% of the mortgaged properties securing
Group 1 Loans be owner occupied; (vi) have no less than 65% of the mortgaged
properties securing Group 1 Loans be single family detached and de minimis
planned unit developments; (vii) have no more than 28% of the Group 1 Loans be
cash-out refinance; (viii) not have any of such group of Group 1 Subsequent
Mortgage Loans with a

                                        9

<PAGE>

loan-to-value ratio greater than 80% not be covered by a Primary Insurance
Policy or the Radian Lender-Paid PMI Policy; (ix) have no more than 75% of the
Group 1 Loans be Mortgage Loans with an interest only period; and (x) together
with the Group 1 Loans already included in the trust, have no more than 1.50% of
such Mortgage Loans (by aggregate Stated Principal Balance as of the Subsequent
Cut-off Date) secured by mortgaged properties located in any one zip code.

      (e) Notwithstanding the foregoing, any Group 1 Subsequent Mortgage Loan
may be rejected by any Rating Agency if the inclusion of any such Group 1
Subsequent Mortgage Loan would adversely affect the ratings of the Bonds. In
addition, minor variances from the characteristics stated above will be
permitted with the consent of the Rating Agencies so long as there are
compensating factors, and the consent of the Rating Agencies to any group of
Group 1 Subsequent Mortgage Loans shall mean that the representations and
warranties set forth in clauses (c) and (d) above are accurate; PROVIDED,
HOWEVER, that the information furnished to the Rating Agencies in respect of
such Group 1 Subsequent Mortgage Loans is true and correct in all material
respects. At least one (1) Business Day prior to the applicable Group 1
Subsequent Transfer Date, each Rating Agency shall notify the Indenture Trustee
as to which Group 1 Subsequent Mortgage Loans, if any, shall not be included in
the transfer on such Group 1 Subsequent Transfer Date; PROVIDED, HOWEVER, that
the Master Servicer, in its capacity as Originator, shall have delivered to each
Rating Agency at least three (3) Business Days prior to such Group 1 Subsequent
Transfer Date a computer file acceptable to each Rating Agency describing the
characteristics specified in paragraphs (c) and (d) above.

      Section 2.06 CONVEYANCE OF THE GROUP 2 SUBSEQUENT MORTGAGE LOANS. (a)
Subject to the conditions set forth in paragraph (b) below and in consideration
of the Indenture Trustee's delivery on the applicable Subsequent Transfer Dates,
to or upon the written order of the Depositor, of all or a portion of the
balance of funds in the Group 2 Pre-Funding Account, the Depositor shall on any
Group 2 Subsequent Transfer Date sell, transfer, assign, set over and convey
without recourse to the Trust Estate, but subject to the other terms and
provisions of this Agreement, all of the right, title and interest of the
Depositor in and to (i) the related Group 2 Subsequent Mortgage Loans identified
on the Mortgage Loan Schedule attached to the related Group 2 Subsequent
Transfer Instrument delivered by the Depositor on such Group 2 Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date (with respect to the Group 2 Subsequent Mortgage Loans) and all
collections in respect of interest and principal due after the Subsequent
Cut-off Date and (iii) all items with respect to such Group 2 Subsequent
Mortgage Loans to be delivered pursuant to Section 2.03 and the other items in
the related Mortgage Files; PROVIDED, HOWEVER, that the Depositor reserves and
retains all right, title and interest in and to principal received and interest
accruing on the Group 2 Subsequent Mortgage Loans prior to the related
Subsequent Cut-off Date. The transfer to the Indenture Trustee for deposit in
the Trust Estate by the Depositor of the Group 2 Subsequent Mortgage Loans
identified on the Mortgage Loan Schedule shall be absolute and is intended by
the Depositor, the Master Servicer, the Indenture Trustee and the Bondholders to
constitute and to be treated as a sale of the Group 2 Subsequent Mortgage Loans
by the Depositor to the Trust Estate. The related Mortgage File for each Group 2
Subsequent Mortgage Loan shall be delivered to the Indenture Trustee at least
three (3) Business Days prior to the related Subsequent Transfer Date.

                                                        10

<PAGE>

      The purchase price paid by the Indenture Trustee from amounts released
from the Group 2 Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Group 2 Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor).

      (b) The Depositor shall transfer to the Indenture Trustee for deposit in
the Trust Estate the applicable Group 2 Subsequent Mortgage Loans and the other
property and rights related thereto as described in paragraph (a) above, and the
Indenture Trustee shall release such applicable funds from the Group 2
Pre-Funding Account, only upon the satisfaction of each of the following
conditions on or prior to the related Group 2 Subsequent Transfer Date:

            (i) the Depositor shall have provided the Indenture Trustee, the
      Bond Insurer and the Rating Agencies with a timely Addition Notice and
      shall have provided any information reasonably requested by the Indenture
      Trustee with respect to the Group 2 Subsequent Mortgage Loans;

            (ii) the Depositor shall have delivered to the Indenture Trustee a
      duly executed Group 2 Subsequent Transfer Instrument (which the Indenture
      Trustee is hereby authorized to execute), which shall include a Mortgage
      Loan Schedule listing the Group 2 Subsequent Mortgage Loans, and the
      Master Servicer, in its capacity as Originator, shall have delivered a
      computer file containing such Mortgage Loan Schedule to the Indenture
      Trustee at least three (3) Business Days prior to the related Group 2
      Subsequent Transfer Date;

            (iii) as of each Group 2 Subsequent Transfer Date, as evidenced by
      delivery of the related Group 2 Subsequent Transfer Instrument,
      substantially in the form of Exhibit G, the Depositor shall not be
      insolvent nor shall it have been rendered insolvent by such transfer nor
      shall it be aware of any pending insolvency;

            (iv) such sale and transfer shall not result in a material adverse
      tax consequence to the Trust Estate or to the Bondholders;

            (v) the Funding Period shall not have terminated;

            (vi) the Depositor shall not have selected the applicable Group 2
      Subsequent Mortgage Loans in a manner that it believed to be adverse to
      the interests of the Bondholders or the Bond Insurer;

            (vii) the Depositor shall have delivered to the Indenture Trustee
      the related Group 2 Subsequent Transfer Instrument confirming the
      satisfaction of the conditions precedent specified in this Section 2.05
      and, pursuant to such Group 2 Subsequent Transfer Instrument, assigned to
      the Indenture Trustee without recourse for the benefit of the Bondholders
      all the right, title and interest of the Depositor, in, to and under the
      applicable Group 2 Subsequent Mortgage Loan Purchase Agreement, to the
      extent of the related Group 2 Subsequent Mortgage Loans; and

                                       11

<PAGE>

            (viii) the Depositor shall have delivered to the Indenture Trustee
      an Opinion of Counsel addressed to the Indenture Trustee and the Rating
      Agencies with respect to the transfer of the applicable Group 2 Subsequent
      Mortgage Loans substantially in the form of the Opinion of Counsel
      delivered to the Indenture Trustee on the Closing Date regarding the
      validity of the conveyance and the true sale of such Group 2 Subsequent
      Mortgage Loans.

      (c) The obligation of the Trust Estate to purchase a Group 2 Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in the immediately following paragraph and the accuracy
of the following representations and warranties with respect to each such Group
2 Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Subsequent Mortgage Loan may not be 30 or more days delinquent as
of the last day of the month preceding the related Subsequent Cut off Date; (ii)
the original term to stated maturity of such Subsequent Mortgage Loan will be
360 months; (iii) each Subsequent Mortgage Loan must be an adjustable-rate
Mortgage Loan with a first lien on the related mortgaged property; (iv) no
Subsequent Mortgage Loan will have a first payment date occurring after November
1, 2004; (v) the latest maturity date of any Subsequent Mortgage Loan will be no
later than October 1, 2034; (vi) no Subsequent Mortgage Loan will be a buydown
loan; (vii) such Subsequent Mortgage Loan will have a credit score of not less
than 500; (viii) such Subsequent Mortgage Loan will have a Mortgage Rate ranging
from approximately 2.375% per annum to approximately 10.000% per annum; (ix)
none of the Group 2 Subsequent Mortgage Loans will be a New York State "high
cost" loan; and (x) such Mortgage Loan shall have been underwritten in
accordance with the criteria set forth under "The Mortgage Pool--Underwriting
Standards" in the Prospectus Supplement.

      (d) In addition, following the purchase of any Group 2 Subsequent Mortgage
Loan by the Trust, the applicable Group 2 Subsequent Mortgage Loans will as of
the related Subsequent Cut-off Date: (i) have a weighted average Mortgage Rate
ranging from 5.100% per annum to 6.250% per annum; (ii) consist of Mortgage
Loans with prepayment charges representing no less than approximately 54% of the
Pool Balance; (iii) have a weighted average credit score ranging from 680 to
720; (iv) have no more than 70% of such Mortgage Loans concentrated in the state
of California; (v) have no less than 75% of the mortgaged properties be owner
occupied; (vi) have no less than 62% of the mortgaged properties be single
family detached and de minimis planned unit developments; (vii) have no more
than 28% of the Mortgage Loans be cash-out refinance; (viii) all of the
Subsequent Mortgage Loans with a loan to value ratio greater than 80% will be
covered by a Primary Insurance Policy or the Radian Lender-Paid PMI Policy; (ix)
have no more than 75% of the Group 2 Loans be Mortgage Loans with an interest
only period; and (x) together with the Group 2 Loans already included in the
Trust, have no more than 1.50% of such Mortgage Loans (by aggregate Stated
Principal Balance as of the applicable Subsequent Cut-off Date) be secured by
mortgaged properties located in any one zip code.

      (e) Notwithstanding the foregoing, any Group 2 Subsequent Mortgage Loan
may be rejected by any Rating Agency if the inclusion of any such Group 2
Subsequent Mortgage Loan would adversely affect the ratings of the Bonds without
taking the Bond Insurance Policy into account. In addition, minor variances from
the characteristics stated above will be permitted with the consent of the
Rating Agencies so long as there are compensating factors, and the consent of
the Rating Agencies to any group of Group 2 Subsequent Mortgage Loans shall mean
that the

                                       12

<PAGE>

representations and warranties set forth in clauses (c) and (d) above are
accurate; PROVIDED, HOWEVER, that the information furnished to the Rating
Agencies in respect of such Group 2 Subsequent Mortgage Loans is true and
correct in all material respects. At least one (1) Business Day prior to the
applicable Group 2 Subsequent Transfer Date, each Rating Agency shall notify the
Indenture Trustee as to which Group 2 Subsequent Mortgage Loans, if any, shall
not be included in the transfer on such Group 2 Subsequent Transfer Date;
PROVIDED, HOWEVER, that the Master Servicer, in its capacity as Originator,
shall have delivered to each Rating Agency at least three (3) Business Days
prior to such Group 2 Subsequent Transfer Date a computer file acceptable to
each Rating Agency describing the characteristics specified in paragraphs (c)
and (d) above.

                                       13

<PAGE>

                                   ARTICLE III

                                    Covenants

      Section 3.01 COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS.
The Indenture Trustee shall establish and maintain an Eligible Account (the
"Payment Account") in which the Indenture Trustee shall, subject to the terms of
this paragraph, deposit, on the same day as it is received from the Master
Servicer, each remittance received by the Indenture Trustee with respect to the
Mortgage Loans. The Indenture Trustee shall make all payments of principal of
and interest on the Bonds, subject to Section 3.03 as provided in Section 3.05
herein from monies on deposit in the Payment Account.

      Section 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain an
office or agency where, subject to satisfaction of conditions set forth herein,
Bonds may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Bonds and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders may be made at
the office of the Indenture Trustee located at c/o DTC Transfer Services, 55
Water Street, Jeanette Park Entrance, New York, New York 10041, and notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.

      Section 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT. (a) As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Bonds that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
Account for payments of Bonds shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer hereby appoints the Indenture Trustee
as its Paying Agent.

      The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:

                  (i) hold all sums held by it for the payment of amounts due
      with respect to the Bonds in trust for the benefit of the Persons entitled
      thereto until such sums shall be paid to such Persons or otherwise
      disposed of as herein provided and pay such sums to such Persons as herein
      provided;

                  (ii) give the Indenture Trustee and the Bond Insurer notice of
      any default by the Issuer of which it has actual knowledge in the making
      of any payment required to be made with respect to the Bonds;

                                       14

<PAGE>

                  (iii) at any time during the continuance of any such default,
      upon the written request of the Indenture Trustee, forthwith pay to the
      Indenture Trustee all sums so held in trust by such Paying Agent;

                  (iv) immediately resign as Paying Agent and forthwith pay to
      the Indenture Trustee all sums held by it in trust for the payment of
      Bonds if at any time it ceases to meet the standards required to be met by
      a Paying Agent at the time of its appointment;

                  (v) comply with all requirements of the Code with respect to
      the withholding from any payments made by it on any Bonds of any
      applicable withholding taxes imposed thereon and with respect to any
      applicable reporting requirements in connection therewith; and

                  (vi) not commence a bankruptcy proceeding against the Issuer
      in connection with this Indenture.

      The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Request
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

      Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Bond (other than amounts paid under the Bond
Insurance Policy) and remaining unclaimed for one year after such amount has
become due and payable shall be discharged from such trust and be paid to the
Issuer on Issuer Request; and the Holder of such Bond shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability of
the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; PROVIDED, HOWEVER, that the Indenture Trustee or such
Paying Agent, before being required to make any such repayment, shall at the
expense and direction of the Issuer cause to be published once, in an Authorized
Newspaper published in the English language, notice that such money remains
unclaimed and that, after a date specified therein which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer. The Indenture Trustee may also
adopt and employ, at the expense and direction of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Bonds have been called but
have not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for each
such Holder).

      Section 3.04 EXISTENCE. The Issuer will keep in full effect its existence,
rights and franchises as a statutory trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and

                                       15

<PAGE>

franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Bonds, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.

      Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST. (a) On each Payment Date
from amounts on deposit in the Payment Account in accordance with Section 8.02
hereof, the Indenture Trustee shall pay to the Persons specified below, to the
extent provided therein, the Available Funds for such Payment Date and any Class
2-A Insured Amount for such Payment Date; PROVIDED, HOWEVER, that any amounts
representing payments from the Bond Insurer shall only be used to pay interest
and principal to the Class 2-A Bondholders pursuant to clauses (f)(i) and (g)
below.

      (b) On each Payment Date, the Group 1 Available Funds shall be distributed
in the following order of priority, in each case to the extent of the Group 1
Available Funds remaining for such Payment Date:

                  (i) concurrently, to the Holders of the Class 1-A-1 Bonds and
      Class 1-A-2 Bonds, the related Accrued Bond Interest for such Class for
      such Payment Date;

                  (ii) to the Holders of the Class M-1-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (iii) to the Holders of the Class M-2-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (iv) to the Holders of the Class M-3-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (v) to the Holders of the Class M-4-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date; and

                  (vi) to the Holders of the Class M-5-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date.

      (c) On each Payment Date, the Holders of the Group 1 Bonds shall be
entitled to receive payments in respect of principal equal the related Principal
Distribution Amount for that Payment Date, allocated on a pro rata basis, based
on the Bond Principal Balances thereof, in reduction of the Bond Principal
Balances thereof, until the Bond Principal Balances thereof have been reduced to
zero.

      (d) On each Payment Date, any Net Monthly Excess Cashflow in respect of
the Group 1 Loans shall be paid as follows:

                  (i) to the Holders of the Group 1 Bonds, pro rata, an amount
      equal to any related Undercollateralized Amount, payable to such Holders
      of the Group 1 Bonds as part of the related Principal Distribution Amount
      as described under Section 3.05(c) above;

                                       16

<PAGE>

                  (ii) to the Holders of the Group 2 Bonds, pro rata, an amount
      equal to any related Undercollateralized Amount, payable to such Holders
      of the Group 2 Bonds as part of the related Principal Distribution Amount
      as described under Section 3.05(g) below;

                  (iii) if Loan Group 1 is an Undercollateralized Loan Group, to
      the Holders of the Group 1 Bonds, pro rata, an amount in respect of
      principal equal to any remaining outstanding Subordinated Transfer
      Realized Loss Amount, payable to such Holders of the Group 1 Bonds as part
      of the related Principal Distribution Amount as described under Section
      3.05(c) above, until either (a) such amount has been reduced to zero or
      (b) the Overcollateralized Amount for Loan Group 2 is equal to the
      Overcollateralization Target Amount for Loan Group 2;

                  (iv) to the Holders of the Group 1 Bonds, pro rata, an amount
      equal to any Realized Losses on the Group 1 Loans during the related Due
      Period, payable to such Holders of the Group 1 Bonds as part of the
      related Principal Distribution Amount as described under Section 3.05(c)
      above, but not greater than the amount required to increase the
      Overcollateralized Amount for Loan Group 1 to the Overcollateralization
      Target Amount for Loan Group 1;

                  (v) to the Holders of the Group 2 Bonds, pro rata, an amount
      equal to any Realized Losses on the Group 2 Loans during the related Due
      Period, to the extent unreimbursed by Net Monthly Excess Cashflow for the
      Group 2 Loans on that Payment Date, payable to such Holders of the Group 2
      Bonds as part of the related Principal Distribution Amount as described
      under Section 3.05(g) below, but not greater than the amount required to
      increase the Overcollateralized Amount for Loan Group 2 to the
      Overcollateralization Target Amount for Loan Group 2;

                  (vi) to the Bond Insurer, the aggregate of all payments, if
      any, made by the Bond Insurer under the Bond Insurance Policy with respect
      to the Class 2-A Bonds, including interest thereon, to the extent not
      previously paid or reimbursed pursuant to Section 3.05(h)(i) below;

                  (vii) to the Holders of the Class 1-A-1 Bonds and Class 1-A-2
      Bonds and the Underlying Class M-1-1, Class M-2-1, Class M-3-1, Class
      M-4-1 and Class M-5-1 Bonds, pro rata, an amount equal to any related
      Overcollateralization Increase Amount, payable to such Holders as part of
      the related Principal Distribution Amount as described under Section
      3.05(c) above;

                  (viii) to the Holders of the Group 2 Bonds, pro rata, an
      amount equal to any related Overcollateralization Increase Amount
      resulting from any previously unreimbursed Realized Losses on the Group 2
      Loans, to the extent that such Realized Losses have not been reimbursed by
      related and non-related Net Monthly Excess Cashflow on prior Payment
      Dates, payable to such Holders of the Group 2 Bonds as part of the related
      Principal Distribution Amount as described under Section 3.05(g) below;

                                       17

<PAGE>

                  (ix) first, to the Holders of the Class 1-A-2 Bonds, and
      second, to the Holders of the Underlying Class M-1-1, Class M-1-2, Class
      M-2-1, Class M-2-2, Class M-3- 1, Class M-3-2, Class M-4-1, Class M-4-2,
      Class M-5-1 and Class M-5-2 Bonds, in that order, in an amount equal to
      the Allocated Realized Loss Amount for such Classes of Bonds, except that
      in the case of the non-related Underlying Class M Bonds, to the extent not
      covered by non-related Net Monthly Excess Cashflow;

                  (x) first, concurrently to the Holders of the Class 1-A-1
      Bonds and Class 1-A-2 Bonds, and second, to the Underlying Class M-1-1,
      Class M-2-1, Class M-3-1, Class M-4-1 and Class M-5-1 Bonds, in that
      order, any Unpaid Interest Shortfall for such Bonds on such Payment Date,
      to the extent not previously reimbursed

                  (xi) first, concurrently to the Holders of the Class 1-A-1
      Bonds and Class 1-A-2 Bonds, and second, sequentially to the Holders of
      the Class M-1-1, Class M-2-1, Class M-3-1, Class M-4-1 and Class M-5-1
      Bonds, in that order, any related Basis Risk Shortfall Carry-Forward
      Amount for such Bonds on such Payment Date, to the extent not covered by
      the Derivative Contracts;

                  (xii) to the Indenture Trustee for amounts owed the Indenture
      Trustee hereunder (other than the Indenture Trustee Fee) remaining unpaid;
      and

                  (xiii) any remaining amounts will be distributed to the
      Certificate Paying Agent, as designee of the Issuer, for the benefit of
      the Holders of the Owner Trust Certificates.

      (e) With respect to the Derivative Contracts and on each Payment Date, the
Net Derivative Contract Payment Amount with respect to such Payment Date shall
be distributed in the following order of priority, in each case to the extent of
amounts available:

                  (i) concurrently to the Holders of the Class 1-A-1, Class
      1-A-2 and Class 2-A Bonds, pro rata, any related Basis Risk Shortfall
      Carry-Forward Amount for such Payment Date;

                  (ii) to the Underlying Class M-1-1 Bonds and Class M-1-2
      Bonds, pro rata, any related Basis Risk Shortfall Carry-Forward Amount for
      such Payment Date;

                  (iii) to the Underlying Class M-2-1 Bonds and Class M-2-2
      Bonds, pro rata, any related Basis Risk Shortfall Carry-Forward Amount for
      such Payment Date;

                  (iv) to the Underlying Class M-3-1 Bonds and Class M-3-2
      Bonds, pro rata, any related Basis Risk Shortfall Carry-Forward Amount for
      such Payment Date;

                  (v) to the Underlying Class M-4-1 Bonds and Class M-4-2 Bonds,
      pro rata, any related Basis Risk Shortfall Carry-Forward Amount for such
      Payment Date;

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<PAGE>

                  (vi) to the Underlying Class M-5-1 Bonds and Class M-5-2
      Bonds, pro rata, any related Basis Risk Shortfall Carry-Forward Amount for
      such Payment Date;

                  (vii) on or after the Payment Date in August 2005, any
      remaining amounts, up to a cumulative amount equal to $180,000,000, shall
      be included in the Net Monthly Excess Cashflow for the Group 1 Loans and
      the Group 2 Loans, pro rata, based on the aggregate Stated Principal
      Balances of the Group 1 Loans and Group 2 Loans, and shall be used as
      described in Section 3.05(d) above and Section 3.05(h) below; and

                  (viii) any remaining amounts will be distributed to the
      Certificate Paying Agent, as designee of the Issuer, for the benefit of
      the Holders of the Owner Trust Certificates.

      (f) On each Payment Date, the Group 2 Available Funds and any Class 2-A
Insured Amount shall be distributed in the following order of priority, in each
case to the extent of the Group 2 Available Funds and any Class 2-A Insured
Amount remaining for such Payment Date:

                  (i) to the Holders of the Class 2-A Bonds, the related Accrued
      Bond Interest for such Class for such Payment Date;

                  (ii) to the Holders of the Class M-1-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (iii) to the Holders of the Class M-2-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (iv) to the Holders of the Class M-3-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (v) to the Holders of the Class M-4-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date; and

                  (vi) to the Holders of the Class M-5-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date.

      (g) On each Payment Date, the Holders of the Group 2 Bonds shall be
entitled to receive payments in respect of principal equal the related Principal
Distribution Amount for that Payment Date, allocated on a pro rata basis, in
reduction of the Bond Principal Balance thereof, until the Bond Principal
Balance thereof have been reduced to zero.

      (h) On each Payment Date, any Net Monthly Excess Cashflow in respect of
the Group 2 Loans shall be paid as follows:

                  (i) to the Bond Insurer, the aggregate of all payments, if
      any, made by the Bond Insurer under the Bond Insurance Policy with respect
      to the Class 2-A Bonds, including interest thereon, to the extent not
      previously paid or reimbursed;

                                       19

<PAGE>

                  (ii) to the Holders of the Group 2 Bonds, pro rata, an amount
      equal to any related Undercollateralized Amount, payable to such Holders
      of the Group 2 Bonds as part of the related Principal Distribution Amount
      as described under Section 3.05(g) above;

                  (iii) to the Holders of the Group 1 Bonds, pro rata, an amount
      equal to any related Undercollateralized Amount, payable to such Holders
      of the Group 1 Bonds as part of the related Principal Distribution Amount
      as described under Section 3.05(c) above;

                  (iv) if Loan Group 2 is an Undercollateralized Loan Group, to
      the Holders of the Group 2 Bonds, pro rata, an amount in respect of
      principal equal to any remaining outstanding Subordinated Transfer
      Realized Loss Amount, payable to such Holders of the Group 2 Bonds as part
      of the related Principal Distribution Amount as described under Section
      3.05(g) above, until either (a) such amount has been reduced to zero or
      (b) the Overcollateralized Amount for Loan Group 1 is equal to the
      Overcollateralization Target Amount for Loan Group 1;

                  (v) to the Holders of the Group 2 Bonds, pro rata, an amount
      equal to any Realized Losses on the Group 2 Loans during the related Due
      Period, payable to such Holders of the Group 2 Bonds as part of the
      related Principal Distribution Amount as described under Section 3.05(g)
      above, but not greater than the amount required to increase the
      Overcollateralized Amount for Loan Group 2 to the Overcollateralization
      Target Amount for Loan Group;

                  (vi) to the Holders of the Group 1 Bonds, pro rata, an amount
      equal to any Realized Losses on the Group 1 Loans during the related Due
      Period, to the extent unreimbursed by Net Monthly Excess Cashflow for the
      Group 1 Loans on that Payment Date, payable to such Holders of the Group 1
      Bonds as part of the related Principal Distribution Amount as described
      under Section 3.05(c) above, but not greater than the amount required to
      increase the Overcollateralized Amount for Loan Group 1 to the
      Overcollateralization Target Amount for Loan Group 1;

                  (vii) to the Holders of the Class 2-A Bonds and the Underlying
      Class M-1- 2, Class M-2-2, Class M-3-2, Class M-4-2 and Class M-5-2 Bonds,
      pro rata, an amount equal to any related Overcollateralization Increase
      Amount, payable to such Holders as part of the related Principal
      Distribution Amount as described under Section 3.05(g) above;

                  (viii) to the Holders of the Group 1 Bonds, pro rata, an
      amount equal to any related Overcollateralization Increase Amount
      resulting from any previously unreimbursed Realized Losses on the Group 1
      Loans, to the extent that such Realized Losses have not been reimbursed by
      related and non-related Net Monthly Excess Cashflow on prior Payment
      Dates, payable to such Holders of the Group 1 Bonds as part of the related
      Principal Distribution Amount as described under Section 3.05(c) above;

                  (ix) to the Holders of the Underlying Class M-1-2, Class
      M-1-1, Class M- 2-2, Class M-2-1, Class M-3-2, Class M-3-1, Class M-4-2,
      Class M-4-1, Class M-5-2 and Class M-5-1 Bonds, in that order, in an
      amount equal to the Allocated Realized Loss Amount

                                       20

<PAGE>

      for such classes of the Underlying Class M Bonds, in each case to the
      extent not covered by non-related Net Monthly Excess Cashflow for a
      non-related Underlying Class M Bond;

                  (x) to the Holders of the Class 2-A Bonds and then to the
      Underlying Class M-1-2, Class M-2-2, Class M-3-2, Class M-4-2 and Class
      M-5-2 Bonds, in that order, any Unpaid Interest Shortfall for such Bonds
      on such Payment Date, to the extent not previously reimbursed;

                  (xi) to the Holders of the Class 2-A Bonds and Underlying
      Class M-1-2, Class M-2-2, Class M-3-2, Class M-4-2 and Class M-5-2 Bonds,
      in that order, any related Basis Risk Shortfall Carry-Forward Amount for
      such Bonds on such Payment Date, to the extent not covered by the
      Derivative Contracts, as applicable;

                  (xii) to the Indenture Trustee for amounts owed the Indenture
      Trustee hereunder (other than the Indenture Trustee Fee) remaining unpaid;
      and

                  (xiii) any remaining amounts will be distributed to the
      Certificate Paying Agent, as designee of the Issuer, for the benefit of
      the Holders of the Owner Trust Certificates.

      (i) [reserved].

      (j) On each Payment Date any amounts received in respect of the Special
Certificate Cap Contract shall be distributed to the Certificate Paying Agent,
as designee of the Issuer, for the benefit of the Holders of the Owner Trust
Certificates.

      (k) Each distribution with respect to a Book-Entry Bond shall be paid to
the Depository, as Holder thereof, and the Depository shall be responsible for
crediting the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the Bond
Owners that it represents and to each indirect participating brokerage firm (a
"brokerage firm" or "indirect participating firm") for which it acts as agent.
Each brokerage firm shall be responsible for disbursing funds to the Bond Owners
that it represents. None of the Indenture Trustee, the Bond Registrar, the
Paying Agent, the Depositor or the Master Servicer shall have any responsibility
therefor except as otherwise provided by this Indenture or applicable law.

      (l) On each Payment Date, the Certificate Paying Agent shall deposit in
the Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certificateholders.

      (m) Any installment of interest or principal, if any, payable on any Bond
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall, if such Holder shall have so requested at least five
Business Days prior to the related Record Date, be paid to each Holder of record
on the preceding Record Date, by wire transfer to an account specified in
writing by such Holder reasonably satisfactory to the Indenture Trustee as of
the preceding Record Date or in all other cases or if no such instructions have
been delivered to the Indenture Trustee, by check to such

                                       21

<PAGE>

Bondholder mailed to such Holder's address as it appears in the Bond Register in
the amount required to be distributed to such Holder on such Payment Date
pursuant to such Holder's Bonds; PROVIDED, HOWEVER, that the Indenture Trustee
shall not pay to such Holders any amount required to be withheld from a payment
to such Holder by the Code.

      (n) The principal of each Bond shall be due and payable in full on the
Final Scheduled Payment Date for such Bond as provided in the forms of Bond set
forth in Exhibits A-1 and A-2 to this Indenture. All principal payments on the
Bonds shall be made to the Bondholders entitled thereto in accordance with the
Percentage Interests represented by such Bonds. Upon notice to the Indenture
Trustee by the Issuer, the Indenture Trustee shall notify the Person in whose
name a Bond is registered at the close of business on the Record Date preceding
the Final Scheduled Payment Date or other final Payment Date (including any
final Payment Date resulting from any redemption pursuant to Section 8.07
hereof). Such notice shall to the extent practicable be mailed no later than
five Business Days prior to such Final Scheduled Payment Date or other final
Payment Date and shall specify that payment of the principal amount and any
interest due with respect to such Bond at the Final Scheduled Payment Date or
other final Payment Date will be payable only upon presentation and surrender of
such Bond and shall specify the place where such Bond may be presented and
surrendered for such final payment. No interest shall accrue on the Bonds on or
after the Final Scheduled Payment Date or any such other final Payment Date.

      The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.05 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.

      Section 3.06 PROTECTION OF TRUST ESTATE. (a) The Issuer will from time to
time prepare, execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:

                  (i) maintain or preserve the lien and security interest (and
      the priority thereof) of this Indenture or carry out more effectively the
      purposes hereof;

                  (ii) perfect, publish notice of or protect the validity of any
      Grant made or to be made by this Indenture;

                  (iii) cause the Issuer or Master Servicer to enforce any of
      the rights to the Mortgage Loans; or

                  (iv) preserve and defend title to the Trust Estate and the
      rights of the Indenture Trustee and the Bondholders in such Trust Estate
      against the claims of all persons and parties.

      (b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.07 hereof (or from the jurisdiction in which it was held
as

                                       22

<PAGE>

described in the Opinion of Counsel delivered on the Closing Date pursuant to
Section 3.07(a) hereof, or if no Opinion of Counsel has yet been delivered
pursuant to Section 3.07(b) hereof, unless the Indenture Trustee shall have
first received an Opinion of Counsel to the effect that the lien and security
interest created by this Indenture with respect to such property will continue
to be maintained after giving effect to such action or actions).

      The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.06 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.

      Section 3.07 OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and first
priority security interest in the Collateral and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and first priority security interest effective.

      (b) On or before April 15 in each calendar year, beginning in 2005, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re- recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and first priority security interest in the Collateral and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Collateral until December 31
in the following calendar year.

      Section 3.08 PERFORMANCE OF OBLIGATIONS. (a) The Issuer will punctually
perform and observe all of its obligations and agreements contained in this
Indenture, the Basic Documents and in the instruments and agreements included in
the Trust Estate.

      (b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer.

      (c) The Issuer will not take any action or permit any action to be taken
by others which would release any Person from any of such Person's covenants or
obligations under any of the documents relating to the Mortgage Loans or under
any instrument included in the Trust Estate, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any of the documents relating to the Mortgage
Loans or any such instrument, except such actions as the Master Servicer is
expressly permitted to take in the

                                       23

<PAGE>

Servicing Agreement. The Indenture Trustee may exercise the rights of the Issuer
to direct the actions of the Master Servicer pursuant to the Servicing
Agreement.

      (d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.

      Section 3.09 NEGATIVE COVENANTS. So long as any Bonds are Outstanding, the
Issuer shall not:

                  (i) except as expressly permitted by this Indenture, sell,
      transfer, exchange or otherwise dispose of the Trust Estate, unless
      directed to do so by the Indenture Trustee;

                  (ii) claim any credit on, or make any deduction from the
      principal or interest payable in respect of, the Bonds (other than amounts
      properly withheld from such payments under the Code) or assert any claim
      against any present or former Bondholder by reason of the payment of the
      taxes levied or assessed upon any part of the Trust Estate;

                  (iii) (A) permit the validity or effectiveness of this
      Indenture to be impaired, or permit the lien of this Indenture to be
      amended, hypothecated, subordinated, terminated or discharged, or permit
      any Person to be released from any covenants or obligations with respect
      to the Bonds under this Indenture except as may be expressly permitted
      hereby, (B) permit any lien, charge, excise, claim, security interest,
      mortgage or other encumbrance (other than the lien of this Indenture) to
      be created on or extend to or otherwise arise upon or burden the Trust
      Estate or any part thereof or any interest therein or the proceeds thereof
      or (C) permit the lien of this Indenture not to constitute a valid first
      priority security interest in the Trust Estate; or

                  (iv) waive or impair, or fail to assert rights under, the
      Mortgage Loans, or impair or cause to be impaired the Issuer's interest in
      the Mortgage Loans, the Mortgage Loan Purchase Agreement or in any Basic
      Document, if any such action would materially and adversely affect the
      interests of the Bondholders.

      Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver to
the Indenture Trustee, by March 1 of each year commencing with the calendar year
2005, an Officer's Certificate stating, as to the Authorized Officer signing
such Officer's Certificate, that:

                  (i) a review of the activities of the Issuer during the
      previous calendar year and of its performance under this Indenture has
      been made under such Authorized Officer's supervision; and

                  (ii) to the best of such Authorized Officer's knowledge, based
      on such review, the Issuer has complied with all conditions and covenants
      under this Indenture throughout such year, or, if there has been a default
      in its compliance with any such condition

                                       24

<PAGE>

      or covenant, specifying each such default known to such Authorized Officer
      and the nature and status thereof.

      Section 3.11 REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS.
The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the
representations and warranties made by the Seller in (i) the Mortgage Loan
Purchase Agreement concerning the Seller and the Initial Mortgage Loans and (ii)
any Group 1 or Group 2 Subsequent Mortgage Loan Purchase Agreements concerning
the Seller and the Group 1 Subsequent Mortgage Loans and Group 2 Subsequent
Mortgage Loans to the same extent as though such representations and warranties
were made directly to the Indenture Trustee. If a Responsible Officer of the
Indenture Trustee has actual knowledge of any breach of any representation or
warranty made by the Seller in the Mortgage Loan Purchase Agreement or in the
applicable Group 1 and Group 2 Subsequent Mortgage Loan Purchase Agreements, the
Indenture Trustee shall promptly notify the Seller of such finding and the
Seller's obligation to cure such defect or repurchase or substitute for the
related Mortgage Loan.

      Section 3.12 AMENDMENTS TO SERVICING AGREEMENT. The Issuer covenants with
the Indenture Trustee that it will not enter into any amendment or supplement to
the Servicing Agreement without the prior written consent of the Indenture
Trustee.

      Section 3.13 MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by the Master Servicer, the Issuer and the Indenture
Trustee hereby acknowledge that the Master Servicer is acting as bailee of the
Indenture Trustee in holding amounts on deposit in the Collection Account, as
well as its bailee in holding any Related Documents released to the Master
Servicer, and any other items constituting a part of the Trust Estate which from
time to time come into the possession of the Master Servicer. It is intended
that, by the Master Servicer's acceptance of such bailee arrangement, the
Indenture Trustee, as a secured party of the Mortgage Loans, will be deemed to
have possession of such Related Documents, such monies and such other items for
purposes of Section 9-305 of the Uniform Commercial Code of the state in which
such property is held by the Master Servicer. The Indenture Trustee shall not be
liable with respect to such documents, monies or items while in possession of
the Master Servicer.

      Section 3.14 INVESTMENT COMPANY ACT. The Issuer shall not become an
"investment company" or be under the "control" of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
PROVIDED, HOWEVER, that the Issuer shall be in compliance with this Section 3.14
if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions imposed
in such order.

      Section 3.15 ISSUER MAY CONSOLIDATE, ETC. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:

                                       25

<PAGE>

                  (i) the Person (if other than the Issuer) formed by or
      surviving such consolidation or merger shall be a Person organized and
      existing under the laws of the United States of America or any state or
      the District of Columbia and shall expressly assume, by an indenture
      supplemental hereto, executed and delivered to the Indenture Trustee, in
      form reasonably satisfactory to the Indenture Trustee, the due and
      punctual payment of the principal of and interest on all Bonds, and the
      payment of the Bond Insurance Premium and all other amounts payable to the
      Bond Insurer, the Indenture Trustee and the Derivative Contract
      Counterparty, the payment to the Certificate Paying Agent of all amounts
      due to the Certificateholders, and the performance or observance of every
      agreement and covenant of this Indenture on the part of the Issuer to be
      performed or observed, all as provided herein;

                  (ii) immediately after giving effect to such transaction, no
      Event of Default shall have occurred and be continuing;

                  (iii) the Rating Agencies shall have notified the Issuer that
      such transaction shall not cause the rating of the Bonds to be reduced,
      suspended or withdrawn or to be considered by either Rating Agency to be
      below investment grade;

                  (iv) the Issuer shall have received an Opinion of Counsel (and
      shall have delivered a copy thereof to the Indenture Trustee) to the
      effect that such transaction will not (A) result in a "substantial
      modification" of the Bonds under Treasury Regulation section 1.1001-3, or
      adversely affect the status of the Bonds as indebtedness for federal
      income tax purposes, or (B) if 100% of the Certificates are not owned by
      IMH Assets Corp., cause the Trust to be subject to an entity level tax for
      federal income tax purposes;

                  (v) any action that is necessary to maintain the lien and
      security interest created by this Indenture shall have been taken; and

                  (vi) the Issuer shall have delivered to the Indenture Trustee
      an Officer's Certificate and an Opinion of Counsel each stating that such
      consolidation or merger and such supplemental indenture comply with this
      Article III and that all conditions precedent herein provided for or
      relating to such transaction have been complied with (including any filing
      required by the Exchange Act), and that such supplemental indenture is
      enforceable.

      (b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:

                  (i) the Person that acquires by conveyance or transfer the
      properties and assets of the Issuer, the conveyance or transfer of which
      is hereby restricted, shall (A) be a United States citizen or a Person
      organized and existing under the laws of the United States of America or
      any state thereof, (B) expressly assume, by an indenture supplemental
      hereto, executed and delivered to the Indenture Trustee, in form
      satisfactory to the Indenture Trustee, the due and punctual payment of the
      principal of and interest on all Bonds and the payment of the Bond
      Insurance Premium and all other amounts payable to the Bond Insurer and
      Derivative Contract Counterparty and the performance or observance of
      every agreement and covenant of this Indenture on the part of the Issuer
      to be performed or observed, all as

                                       26

<PAGE>

      provided herein, (C) expressly agree by means of such supplemental
      indenture that all right, title and interest so conveyed or transferred
      shall be subject and subordinate to the rights of the Holders of the
      Bonds, (D) unless otherwise provided in such supplemental indenture,
      expressly agree to indemnify, defend and hold harmless the Issuer, the
      Indenture Trustee and the Bond Insurer against and from any loss,
      liability or expense arising under or related to this Indenture and the
      Bonds and (E) expressly agree by means of such supplemental indenture that
      such Person (or if a group of Persons, then one specified Person) shall
      make all filings with the Commission (and any other appropriate Person)
      required by the Exchange Act in connection with the Bonds;

                  (ii) immediately after giving effect to such transaction, no
      Default or Event of Default shall have occurred and be continuing;

                  (iii) the Rating Agencies shall have notified the Issuer that
      such transaction shall not cause the rating of the Bonds to be reduced,
      suspended or withdrawn;

                  (iv) the Issuer shall have received an Opinion of Counsel (and
      shall have delivered a copy thereof to the Indenture Trustee) to the
      effect that such transaction will not (A) result in a "substantial
      modification" of the Bonds under Treasury Regulation section 1.1001-3, or
      adversely affect the status of the Bonds as indebtedness for federal
      income tax purposes, or (B) if 100% of the Certificates are not owned by
      IMH Assets Corp., cause the Trust to be subject to an entity level tax for
      federal income tax purposes;

                  (v) any action that is necessary to maintain the lien and
      security interest created by this Indenture shall have been taken; and

                  (vi) the Issuer shall have delivered to the Indenture Trustee
      an Officer's Certificate and an Opinion of Counsel each stating that such
      conveyance or transfer and such supplemental indenture comply with this
      Article III and that all conditions precedent herein provided for relating
      to such transaction have been complied with (including any filing required
      by the Exchange Act).

      Section 3.16 SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or merger
of the Issuer in accordance with Section 3.15(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.

      (b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.15(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Bonds immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.

      Section 3.17 NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans and the issuance of the

                                       27

<PAGE>

Bonds and Certificates in the manner contemplated by this Indenture and the
Basic Documents and all activities incidental thereto.

      Section 3.18 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Bonds under this Indenture.

      Section 3.19 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.

      Section 3.20 CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).

      Section 3.21 DETERMINATION OF BOND INTEREST RATE. On each Interest
Determination Date the Indenture Trustee shall determine One-Month LIBOR and the
related Bond Interest Rate for each Class of Bonds for the following Accrual
Period and shall inform the Issuer, the Master Servicer, and the Depositor at
their respective facsimile numbers given to the Indenture Trustee in writing
thereof. The establishment of One-Month LIBOR on each Interest Determination
Date by the Indenture Trustee and the Indenture Trustee's calculation of the
rate of interest applicable to each Class of Bonds for the related Accrual
Period shall (in the absence of manifest error) be final and binding.

      Section 3.22 RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; PROVIDED, HOWEVER, that
the Issuer may make, or cause to be made, (x) distributions and payments to the
Owner Trustee, the Indenture Trustee, Bondholders and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under
this Indenture and the Trust Agreement and (y) payments to the Master Servicer
and the Subservicers pursuant to the terms of the Servicing Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture and the Basic
Documents.

      Section 3.23 NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee, the Bond Insurer and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust Agreement.

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      Section 3.24 FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

      Section 3.25 STATEMENTS TO BONDHOLDERS. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall prepare and make available
on the Indenture Trustee's website, https://www.corporatetrust.db.com/invr (or
deliver at the recipient's option), to the Bond Insurer and to each Bondholder
and Certificateholder the most recent statement prepared by the Master Servicer
pursuant to Section 4.01 of the Servicing Agreement and in the manner provided
for in Section 7.05 hereof.

      Section 3.26 CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE.

      (a) With respect to that portion of the Collateral described in clauses
(a) through (d) of the definition of Trust Estate, the Issuer represents to the
Indenture Trustee that:

            (i) This Indenture creates a valid and continuing security interest
(as defined in the applicable UCC) in the Collateral in favor of the Indenture
Trustee, which security interest is prior to all other liens, and is enforceable
as such as against creditors of and purchasers from the Issuer.

            (ii) The Collateral constitutes "deposit accounts" or "instruments,"
as applicable, within the meaning of the applicable UCC.

            (iii) The Issuer owns and has good and marketable title to the
Collateral, free and clear of any lien, claim or encumbrance of any Person.

            (iv) The Issuer has taken all steps necessary to cause the Indenture
Trustee to become the account holder of the Collateral.

            (v) Other than the security interest granted to the Indenture
Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Collateral.

            (vi) The Collateral is not in the name of any Person other than the
Issuer or the Indenture Trustee. The Issuer has not consented to the bank
maintaining the Collateral to comply with instructions of any Person other than
the Indenture Trustee.

      (b) With respect to that portion of the Collateral described in clauses
(e) and (f), the Issuer represents to the Indenture Trustee that:

            (i) This Indenture creates a valid and continuing security interest
(as defined in the applicable UCC) in the Collateral in favor of the Indenture
Trustee, which security interest is prior to all other liens, and is enforceable
as such as against creditors of and purchasers from the Issuer.

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            (ii) The Collateral constitutes "general intangibles" within the
meaning of the applicable UCC.

            (iii) The Issuer owns and has good and marketable title to the
Collateral, free and clear of any lien, claim or encumbrance of any Person.

            (iv) Other than the security interest granted to the Indenture
Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Collateral.

      (c) With respect to any Collateral in which a security interest may be
perfected by filing, the Issuer has not authorized the filing of, and is not
aware of any financing statements against, the Issuer, that include a
description of collateral covering such Collateral, other than any financing
statement relating to the security interest granted to the Indenture Trustee
hereunder or that has been terminated. The Issuer is not aware of any judgment
or tax lien filings against the Issuer.

      (d) The Issuer has caused or will have caused, within ten days, the filing
of all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the security
interest in all Collateral granted to the Indenture Trustee hereunder in which a
security interest may be perfected by filing. Any financing statement that is
filed in connection with this Section 3.26 shall contain a statement that a
purchase or security interest in any collateral described therein will violate
the rights of the secured party named in such financing statement.

      (e) The foregoing representations may not be waived and shall survive the
issuance of the Bonds.

      Section 3.27 INTEREST COVERAGE ACCOUNTS.

      (a) No later than the Closing Date, the Indenture Trustee shall establish
and maintain two segregated trust accounts that are Eligible Accounts, which
shall be titled "Group 1 Interest Coverage Account, Deutsche Bank National Trust
Company, as indenture trustee for the registered holders of IMH Assets Corp.,
Collateralized Asset-Backed Bonds, Series 2004-7" (the "Group 1 Interest
Coverage Account") and "Group 2 Interest Coverage Account, Deutsche Bank
National Trust Company, as indenture trustee for the registered holders of IMH
Assets Corp., Collateralized Asset-Backed Bonds, Series 2004-7" (the "Group 2
Interest Coverage Account", and together with the Group 1 Interest Coverage
Account, the "Interest Coverage Accounts"). The Indenture Trustee shall,
promptly upon receipt, deposit in each Interest Coverage Account and retain
therein the related Interest Coverage Amount remitted on the Closing Date to the
Indenture Trustee by the Depositor. Funds deposited in the Interest Coverage
Accounts shall be held in trust by the Indenture Trustee for the Bondholders for
the uses and purposes set forth herein.

      (b) For federal income tax purposes, the Master Servicer shall be the
owner of the Interest Coverage Accounts and shall report all items of income,
deduction, gain or loss arising therefrom. All income and gain realized from
investment of funds deposited in the Interest Coverage Accounts, which
investment shall be made solely upon the written direction of the Master
Servicer in Permitted

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Investments, shall be for the sole and exclusive benefit of the Master Servicer
and shall be remitted by the Indenture Trustee to the Master Servicer at the end
of the Funding Period. The Master Servicer shall deposit in the Interest
Coverage Accounts the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss.

      (c) On each Payment Date during the Funding Period and on the Payment Date
immediately following the end of the Funding Period, the Indenture Trustee shall
withdraw from the Interest Coverage Accounts and deposit in the Payment Account
an amount equal to 30 days' interest on the excess, if any, of the Group 1
Original Pre-Funded Amount and the Group 2 Original Pre- Funded Amount,
respectively, over the aggregate Principal Balance of Group 1 Subsequent
Mortgage Loans and the Group 2 Subsequent Mortgage Loans, respectively, that (in
each case) both (i) had a Due Date during the Due Period relating to such
Payment Date and (ii) had a Subsequent Cut-off Date prior to the first day of
the month in which such Payment Date occurs, at a per annum rate equal to 1.25%,
plus the Indenture Trustee's Fee Rate. Such withdrawal and deposit shall be
treated as a contribution of cash by the Master Servicer to the Trust Fund on
the date thereof. Immediately following any such withdrawal and deposit, and
immediately following the conveyance of any Group 1 Subsequent Mortgage Loans or
Group 2 Subsequent Mortgage Loans to the Trust on any Subsequent Transfer Date,
the Indenture Trustee shall withdraw from the Group 1 Interest Coverage Account
or the Group 2 Interest Coverage Account, respectively, and remit to the Master
Servicer or its designee an amount equal to the excess, if any, of the amount
remaining in such Group 1 Interest Coverage Account or Group 2 Interest Coverage
Account, respectively, over the amount that would be required to be withdrawn
therefrom (assuming sufficient funds therein) pursuant to the preceding sentence
on each subsequent Payment Date, if any, that will occur during the Funding
Period or that will be the Payment Date immediately following the end of the
Funding Period, if no Group 1 Subsequent Mortgage Loans or Group 2 Subsequent
Mortgage Loans were acquired by the Trust Fund after the end of the Prepayment
Period relating to the current Payment Date.

      (d) Upon the earliest of (i) the Payment Date immediately following the
end of the Funding Period, (ii) the reduction of the Bond Principal Balances of
the Bonds to zero or (iii) the termination of this Agreement in accordance with
Section 8.04, any amount remaining on deposit in the Interest Coverage Accounts
after distributions pursuant to paragraph (c) above shall be withdrawn by the
Indenture Trustee and paid to the Master Servicer or its designee.

      Section 3.28 [RESERVED].

      Section 3.29 REPLACEMENT DERIVATIVE CONTRACTS. In the event of a default
by a Derivative Contract Counterparty with respect to the related Derivative
Contracts (a "Derivative Contract Default"), the Issuer, at its expense, may,
but shall not be required to, substitute a new derivative contract for the
existing Derivative Contracts or any other form of similar coverage for basis
risk shortfalls; PROVIDED, HOWEVER, that the timing and mechanism for receiving
payments under such new derivative contracts shall be reasonably acceptable to
the Indenture Trustee. It shall be a condition to substitution of any new
derivative contracts that there be delivered to the Indenture Trustee an Opinion
of Counsel to the effect that such substitution would not (a) result in a
"substantial modification" of the Bonds under Treasury Regulation section
1.1001-3, or adversely affect the status of the Bonds as indebtedness for
federal income tax purposes, or (b) if 100% of the

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Certificates are not owned by IMH Assets Corp., cause the Trust to be subject to
an entity level tax for federal income tax purposes.

      Section 3.30 [RESERVED].

      Section 3.31 ALLOCATION OF REALIZED LOSSES. (a) Prior to each Payment
Date, the Master Servicer shall determine the total amount of Realized Losses
that occurred during the related Prepayment Period. The amount of each Realized
Loss shall be evidenced by an Officer's Certificate delivered to the Indenture
Trustee with the related Remittance Report.

      (b) On each Payment Date following the application of all amounts
distributable on such date, to the extent the aggregate Stated Principal Balance
of the Group 1 Loans is less than the aggregate Bond Principal Balances of the
Group 1 Bonds due to Realized Losses on the Group 1 Loans, the Bond Principal
Balances of the Class M-5-1, Class M-5-2, Class M-4-1, Class M-4-2, Class M-3-1,
Class M-3-2, Class M-2-1, Class M-2-2, Class M-1-1and Class M-1-2 Bonds, in that
order, and then the Bond Principal Balance of the Class 1-A-2 Bonds shall be
reduced, until the Bond Principal Balance thereof has been reduced to zero. On
each Payment Date following the application of all amounts distributable on such
date, to the extent the aggregate Stated Principal Balance of the Group 2 Loans
is less than the aggregate Bond Principal Balances of the Group 2 Bonds due to
Realized Losses on the Group 2 Loans, the Bond Principal Balances of the of the
Class M-5-2, Class M-5-1, Class M-4-2, Class M-4-1, Class M-3-2, Class M-3-1,
Class M-2-2, Class M-2- 1, Class M-1-2 and Class M-1-1, in that order, shall be
reduced, until the Bond Principal Balance thereof has been reduced to zero. All
Realized Losses allocated to a Class of Bonds will be allocated in proportion to
the Percentage Interests evidenced thereby.

      Section 3.32 THE GROUP 1 PRE-FUNDING ACCOUNT. (a) No later than the
Closing Date, the Indenture Trustee shall establish and maintain a segregated
trust account that is an Eligible Account, which shall be titled "Group 1
Pre-Funding Account, Deutsche Bank National Trust Company, as indenture trustee
for the registered holders of IMH Assets Corp., Collateralized Asset-Backed
Bonds, Series 2004-7" (the "Group 1 Pre-Funding Account"). The Indenture Trustee
shall, promptly upon receipt, deposit in the Group 1 Pre-Funding Account and
retain therein the Group 1 Original Pre-Funded Amount remitted on the Closing
Date to the Indenture Trustee by the Depositor. Funds deposited in the Group 1
Pre-Funding Account shall be held in trust by the Indenture Trustee for the
Bondholders for the uses and purposes set forth herein.

      (b) The Indenture Trustee will invest funds deposited in the Group 1
Pre-Funding Account, as directed by the Master Servicer in writing, in Eligible
Investments with a maturity date (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Indenture, if a Person other than the Indenture Trustee
or an Affiliate manages or advises such investment, (ii) no later than the date
on which such funds are required to be withdrawn from such account pursuant to
this Indenture, if the Indenture Trustee or an Affiliate manages or advises such
investment or (iii) within one (1) Business Day of the Indenture Trustee's
receipt thereof. For federal income tax purposes, the Master Servicer shall be
the owner of the Group 1 Pre-Funding Account and shall report all items of
income, deduction, gain or loss arising therefrom. All income and gain realized
from investment of funds deposited in the Group 1 Pre-Funding Account shall be
included in Available Funds at the following times: (i)

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<PAGE>

on the Business Day immediately preceding each Payment Date, if a Person other
than the Indenture Trustee or an Affiliate of the Indenture Trustee manages or
advises such investment, or on each Payment Date, if the Indenture Trustee or an
Affiliate of the Indenture Trustee manages or advises such investment, (ii) on
the Business Day immediately preceding each Group 1 Subsequent Transfer Date, if
a Person other than the Indenture Trustee or an Affiliate of the Indenture
Trustee manages or advises such investment, or on each Group 1 Subsequent
Transfer Date, if the Indenture Trustee or an Affiliate of the Indenture Trustee
manages or advises such investment or (iii) within one (1) Business Day of the
Indenture Trustee's receipt thereof. The Master Servicer shall deposit in the
Group 1 Pre-Funding Account the amount of any net loss incurred in respect of
any such Eligible Investment immediately upon realization of such loss without
any right of reimbursement therefor.

      (c) Amounts on deposit in the Group 1 Pre-Funding Account shall be
withdrawn by the Indenture Trustee as follows:

            (i) On any Group 1 Subsequent Transfer Date, the Indenture Trustee
shall withdraw from the Group 1 Pre-Funding Account an amount equal to 100% of
the aggregate Stated Principal Balances of the related Group 1 Subsequent
Mortgage Loans transferred and assigned to the Indenture Trustee for deposit in
the Mortgage Pool on such Group 1 Subsequent Transfer Date and pay such amount
to or upon the order of the Issuer upon satisfaction of the conditions set forth
in Section 2.05 with respect to such transfer and assignment;

            (ii) If the amount on deposit in the Group 1 Pre-Funding Account has
not been reduced to zero during the Funding Period, on the day immediately
following the termination of the Funding Period, the Indenture Trustee shall
deposit into the Payment Account any amounts remaining in the Group 1
Pre-Funding Account for distribution in accordance with the terms hereof;

            (iii) To withdraw any amount not required to be deposited in the
Group 1 Pre-Funding Account or deposited therein in error; and

            (iv) To clear and terminate the Group 1 Pre-Funding Account upon the
earlier to occur of (A) the Payment Date immediately following the end of the
Funding Period and (B) the termination of this Indenture, with any amounts
remaining on deposit therein being paid to the Holders of the Bonds then
entitled to distributions in respect of principal.

      Section 3.33 THE GROUP 2 PRE-FUNDING ACCOUNT. (a) No later than the
Closing Date, the Indenture Trustee shall establish and maintain a segregated
trust account that is an Eligible Account, which shall be titled "Group 2
Pre-Funding Account, Deutsche Bank National Trust Company, as indenture trustee
for the registered holders of IMH Assets Corp., Collateralized Asset-Backed
Bonds, Series 2004-7" (the "Group 2 Pre-Funding Account"). The Indenture Trustee
shall, promptly upon receipt, deposit in the Group 2 Pre-Funding Account and
retain therein the Group 2 Original Pre-Funded Amount remitted on the Closing
Date to the Indenture Trustee by the Depositor. Funds deposited in the Group 2
Pre-Funding Account shall be held in trust by the Indenture Trustee for the
Bondholders for the uses and purposes set forth herein.

      (b) The Indenture Trustee will invest funds deposited in the Group 2
Pre-Funding Account, as directed by the Master Servicer in writing, in Eligible
Investments with a maturity date

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(i) no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Indenture,
if a Person other than the Indenture Trustee or an Affiliate manages or advises
such investment, (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Indenture, if the Indenture
Trustee or an Affiliate manages or advises such investment or (iii) within one
(1) Business Day of the Indenture Trustee's receipt thereof. For federal income
tax purposes, the Master Servicer shall be the owner of the Group 2 Pre-Funding
Account and shall report all items of income, deduction, gain or loss arising
therefrom. All income and gain realized from investment of funds deposited in
the Group 2 Pre-Funding Account shall be included in Available Funds at the
following times: (i) on the Business Day immediately preceding each Payment
Date, if a Person other than the Indenture Trustee or an Affiliate of the
Indenture Trustee manages or advises such investment, or on each Payment Date,
if the Indenture Trustee or an Affiliate of the Indenture Trustee manages or
advises such investment, (ii) on the Business Day immediately preceding each
Group 2 Subsequent Transfer Date, if a Person other than the Indenture Trustee
or an Affiliate of the Indenture Trustee manages or advises such investment, or
on each Group 2 Subsequent Transfer Date, if the Indenture Trustee or an
Affiliate of the Indenture Trustee manages or advises such investment or (iii)
within one (1) Business Day of the Indenture Trustee's receipt thereof. The
Master Servicer shall deposit in the Group 2 Pre-Funding Account the amount of
any net loss incurred in respect of any such Eligible Investment immediately
upon realization of such loss without any right of reimbursement therefor.

      (c) Amounts on deposit in the Group 2 Pre-Funding Account shall be
withdrawn by the Indenture Trustee as follows:

            (i) On any Group 2 Subsequent Transfer Date, the Indenture Trustee
shall withdraw from the Group 2 Pre-Funding Account an amount equal to 100% of
the aggregate Stated Principal Balances of the related Group 2 Subsequent
Mortgage Loans transferred and assigned to the Indenture Trustee for deposit in
the Mortgage Pool on such Group 2 Subsequent Transfer Date and pay such amount
to or upon the order of the Issuer upon satisfaction of the conditions set forth
in Section 2.05 with respect to such transfer and assignment;

            (ii) If the amount on deposit in the Group 2 Pre-Funding Account has
not been reduced to zero during the Funding Period, on the day immediately
following the termination of the Funding Period, the Indenture Trustee shall
deposit into the Payment Account any amounts remaining in the Group 2
Pre-Funding Account for distribution in accordance with the terms hereof;

            (iii) To withdraw any amount not required to be deposited in the
Group 2 Pre-Funding Account or deposited therein in error; and

            (iv) To clear and terminate the Group 2 Pre-Funding Account upon the
earlier to occur of (A) the Payment Date immediately following the end of the
Funding Period and (B) the termination of this Indenture, with any amounts
remaining on deposit therein being paid to the Holders of the Bonds then
entitled to distributions in respect of principal.

      Section 3.34 GRANT OF THE GROUP 1 SUBSEQUENT MORTGAGE LOANS. In
consideration of the delivery on each Group 1 Subsequent Transfer Date to or
upon the order of the Issuer of all or a portion of the amount on deposit in the
Group 1 Pre-Funding Account, the Depositor shall, to the

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<PAGE>

extent of the availability thereof, on such Group 1 Subsequent Transfer Date
during the Funding Period, grant to the Indenture Trustee all of its rights,
title and interest in the Group 1 Subsequent Mortgage Loans and simultaneously
with the Grant of the Group 1 Subsequent Mortgage Loans, the Depositor will
cause the related Mortgage File to be delivered to the Indenture Trustee.

      Section 3.35 GRANT OF THE GROUP 2 SUBSEQUENT MORTGAGE LOANS. In
consideration of the delivery on each Group 2 Subsequent Transfer Date to or
upon the order of the Issuer of all or a portion of the amount on deposit in the
Group 2 Pre-Funding Account, the Depositor shall, to the extent of the
availability thereof, on such Group 2 Subsequent Transfer Date during the
Funding Period, grant to the Indenture Trustee all of its rights, title and
interest in the Group 2 Subsequent Mortgage Loans and simultaneously with the
Grant of the Group 2 Subsequent Mortgage Loans, the Depositor will cause the
related Mortgage File to be delivered to the Indenture Trustee.

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                                   ARTICLE IV

               The Bonds; Satisfaction and Discharge of Indenture

      Section 4.01 THE BONDS. Each Class of Bonds shall be registered in the
name of a nominee designated by the Depository. Beneficial Owners will hold
interests in the Bonds through the book- entry facilities of the Depository in
minimum initial Bond Principal Balances of $25,000 and integral multiples of $1
in excess thereof.

      The Indenture Trustee may for all purposes (including the making of
payments due on the Bonds) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Bonds for the
purposes of exercising the rights of Holders of the Bonds hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Bonds shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08
hereof, Beneficial Owners shall not be entitled to definitive certificates for
the Bonds as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Bonds shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Bondholders and give notice to the
Depository of such record date. Without the consent of the Issuer and the
Indenture Trustee, no Bond may be transferred by the Depository except to a
successor Depository that agrees to hold such Bond for the account of the
Beneficial Owners.

      In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Bonds it
beneficially owns in the manner prescribed in Section 4.08.

      The Bonds shall, on original issue, be executed on behalf of the Issuer by
the Owner Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated by the Indenture Trustee and delivered by the Indenture Trustee to
or upon the order of the Issuer.

      Section 4.02 REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF
BONDS; APPOINTMENT OF BOND REGISTRAR AND CERTIFICATE REGISTRAR. The Issuer shall
cause to be kept at the Corporate Trust Office a Bond Register in which, subject
to such reasonable regulations as it may prescribe, the Bond Registrar shall
provide for the registration of Bonds and of transfers and exchanges of Bonds as
herein provided.

      Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Bond at the Corporate Trust
Office, the Issuer shall execute and the Bond Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Bonds in authorized initial Bond Principal Balances evidencing the same
Class and aggregate Percentage Interests.

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      Subject to the foregoing, at the option of the Bondholders, Bonds may be
exchanged for other Bonds of like tenor and in authorized initial Bond Principal
Balances evidencing the same Class and aggregate Percentage Interests upon
surrender of the Bonds to be exchanged at the Corporate Trust Office of the Bond
Registrar. Whenever any Bonds are so surrendered for exchange, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver the Bonds which
the Bondholder making the exchange is entitled to receive. Each Bond presented
or surrendered for registration of transfer or exchange shall (if so required by
the Bond Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Bond Registrar
duly executed by the Holder thereof or his attorney duly authorized in writing
with such signature guaranteed by a commercial bank or trust company located or
having a correspondent located in the city of New York. Bonds delivered upon any
such transfer or exchange will evidence the same obligations, and will be
entitled to the same rights and privileges, as the Bonds surrendered.

      No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Bond Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Bonds.

      The Issuer hereby appoints the Indenture Trustee as (i) Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement and (ii) Bond Registrar under this
Indenture. The Indenture Trustee hereby accepts such appointments.

      Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN BONDS. If (i) any
mutilated Bond is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Bond Registrar or
the Indenture Trustee that such Bond has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8- 405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Bond, a replacement Bond; PROVIDED, HOWEVER, that if
any such destroyed, lost or stolen Bond, but not a mutilated Bond, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Bond, the Issuer may pay such destroyed, lost or stolen Bond when so
due or payable without surrender thereof. If, after the delivery of such
replacement Bond or payment of a destroyed, lost or stolen Bond pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Bond in
lieu of which such replacement Bond was issued presents for payment such
original Bond, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Bond (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Bond from such Person to whom such
replacement Bond was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.

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<PAGE>

      Upon the issuance of any replacement Bond under this Section 4.03, the
Issuer may require the payment by the Holder of such Bond of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.

      Every replacement Bond issued pursuant to this Section 4.03 in replacement
of any mutilated, destroyed, lost or stolen Bond shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Bonds duly issued hereunder.

      The provisions of this Section 4.03 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Bonds.

      Section 4.04 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Bond, the Issuer, the Indenture Trustee, the
Paying Agent and any agent of the Issuer or the Indenture Trustee may treat the
Person in whose name any Bond is registered (as of the day of determination) as
the owner of such Bond for the purpose of receiving payments of principal of and
interest, if any, on such Bond and for all other purposes whatsoever, whether or
not such Bond be overdue, and neither the Issuer, the Indenture Trustee, the
Paying Agent nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.

      Section 4.05 CANCELLATION. All Bonds surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Bonds previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Bonds so delivered shall be promptly cancelled by the Indenture Trustee.
No Bonds shall be authenticated in lieu of or in exchange for any Bonds
cancelled as provided in this Section 4.05, except as expressly permitted by
this Indenture. All cancelled Bonds may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; PROVIDED, HOWEVER, that such Issuer Request is
timely and the Bonds have not been previously disposed of by the Indenture
Trustee.

      Section 4.06 BOOK-ENTRY BONDS. The Bonds, upon original issuance, will be
issued in the form of typewritten Bonds representing the Book-Entry Bonds, to be
delivered to The Depository Trust Company, the initial Depository, by, or on
behalf of, the Issuer. The Bonds shall initially be registered on the Bond
Register in the name of Cede & Co., the nominee of the initial Depository, and
no Beneficial Owner will receive a Definitive Bond representing such Beneficial
Owner's interest in such Bond, except as provided in Section 4.08. With respect
to such Bonds, unless and until definitive, fully registered Bonds (the
"Definitive Bonds") have been issued to Beneficial Owners pursuant to Section
4.08:

                  (i) the provisions of this Section 4.06 shall be in full force
      and effect;

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                  (ii) the Bond Registrar, the Paying Agent and the Indenture
      Trustee shall be entitled to deal with the Depository for all purposes of
      this Indenture (including the payment of principal of and interest on the
      Bonds and the giving of instructions or directions hereunder) as the sole
      holder of the Bonds, and shall have no obligation to the Beneficial Owners
      of the Bonds;

                  (iii) to the extent that the provisions of this Section 4.06
      conflict with any other provisions of this Indenture, the provisions of
      this Section 4.06 shall control;

                  (iv) the rights of Beneficial Owners shall be exercised only
      through the Depository and shall be limited to those established by law
      and agreements between such Owners of Bonds and the Depository and/or the
      Depository Participants. Unless and until Definitive Bonds are issued
      pursuant to Section 4.08, the initial Depository will make book- entry
      transfers among the Depository Participants and receive and transmit
      payments of principal of and interest on the Bonds to such Depository
      Participants; and

                  (v) whenever this Indenture requires or permits actions to be
      taken based upon instructions or directions of Holders of Bonds evidencing
      a specified percentage of the Bond Principal Balances of the Bonds, the
      Depository shall be deemed to represent such percentage with respect to
      the Bonds only to the extent that it has received instructions to such
      effect from Beneficial Owners and/or Depository Participants owning or
      representing, respectively, such required percentage of the beneficial
      interest in the Bonds and has delivered such instructions to the Indenture
      Trustee.

      Section 4.07 NOTICES TO DEPOSITORY. Whenever a notice or other
communication to the Bond Holders is required under this Indenture, unless and
until Definitive Bonds shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Bonds to the
Depository, and shall have no obligation to the Beneficial Owners.

      Section 4.08 DEFINITIVE BONDS. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Bonds and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Beneficial Owners of Bonds representing beneficial interests
aggregating at least a majority of the Bond Principal Balances of the Bonds
advise the Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Beneficial
Owners, then the Depository shall notify all Beneficial Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Bonds to Beneficial Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Bonds representing the Book-Entry Bonds by
the Depository, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Bonds in
accordance with the instructions of the Depository. None of the Issuer, the Bond
Registrar or the Indenture Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Bonds, the
Indenture Trustee shall recognize the Holders of the Definitive Bonds as
Bondholders.

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<PAGE>

      Section 4.09 TAX TREATMENT. The Issuer has entered into this Indenture,
and the Bonds will be issued with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Bonds will qualify
as indebtedness. The Issuer and the Indenture Trustee (in accordance with
Section 6.06 hereof), by entering into this Indenture, and each Bondholder, by
its acceptance of its Bond (and each Beneficial Owner by its acceptance of an
interest in the applicable Book-Entry Bond), agree to treat the Bonds for
federal, state and local income, single business and franchise tax purposes as
indebtedness.

      Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall
cease to be of further effect with respect to the Bonds except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Bonds, (iii) rights of Bondholders (and the Bond
Insurer, as subrogee of the Class 2-A Bondholders) to receive payments of
principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11), (vi) the
right of the Derivative Contract Counterparty to receive the Net Derivative Fee
and (vii) the rights of Bondholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Bonds and shall release and deliver the Collateral
to or upon the order of the Issuer, when

            (A) either

            (1) all Bonds theretofore authenticated and delivered (other than
      (i) Bonds that have been destroyed, lost or stolen and that have been
      replaced or paid as provided in Section 4.03 hereof and (ii) Bonds for
      whose payment money has theretofore been deposited in trust or segregated
      and held in trust by the Issuer and thereafter repaid to the Issuer or
      discharged from such trust, as provided in Section 3.03) have been
      delivered to the Indenture Trustee for cancellation; or

            (2) all Bonds not theretofore delivered to the Indenture Trustee for
      cancellation

                  a.    have become due and payable,

                  b.    will become due and payable at the Final Scheduled
                        Payment Date within one year, or

                  c.    have been called for early redemption and the Trust has
                        been terminated pursuant to Section 8.07 hereof,

and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Bonds then outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the

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<PAGE>

Final Scheduled Payment Date or other final Payment Date and has delivered to
the Indenture Trustee a verification report from a nationally recognized
accounting firm certifying that the amounts deposited with the Indenture Trustee
are sufficient to pay and discharge the entire indebtedness of such Bonds, or,
in the case of c. above, the Issuer shall have complied with all requirements of
Section 8.07 hereof,

            (B) the Issuer has paid or caused to be paid all other sums payable
      hereunder; and

            (C) the Issuer has delivered to the Indenture Trustee an Officer's
      Certificate and an Opinion of Counsel, each meeting the applicable
      requirements of Section 10.01 hereof, each stating that all conditions
      precedent herein provided for relating to the satisfaction and discharge
      of this Indenture have been complied with and, if the Opinion of Counsel
      relates to a deposit made in connection with Section 4.10(A)(2)b. above,
      such opinion shall further be to the effect that such deposit will
      constitute an "in-substance defeasance" within the meaning of Revenue
      Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuer will
      be the owner of the assets deposited in trust for federal income tax
      purposes.

      Section 4.11 APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Bonds and this
Indenture, to the payment, either directly or through any Paying Agent or the
Issuer, Certificate Paying Agent as designee of the Issuer, as the Indenture
Trustee may determine, to the Holders of Securities, of all sums due and to
become due thereon for principal and interest or otherwise; but such monies need
not be segregated from other funds except to the extent required herein or
required by law.

      Section 4.12 [RESERVED].

      Section 4.13 REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection with
the satisfaction and discharge of this Indenture with respect to the Bonds, all
monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Bonds shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Person shall be released from all further
liability with respect to such monies.

      Section 4.14 TEMPORARY BONDS. Pending the preparation of any Definitive
Bonds, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Bonds that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Bonds in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Bonds may
determine, as evidenced by their execution of such Bonds.

      If temporary Bonds are issued, the Issuer will cause Definitive Bonds to
be prepared without unreasonable delay. After the preparation of the Definitive
Bonds, the temporary Bonds shall be exchangeable for Definitive Bonds upon
surrender of the temporary Bonds at the office of the

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<PAGE>

Indenture Trustee's agent located at DTC Transfer Services, located at 55 Water
Street, Jeanette Park Entrance, New York, New York 10041, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Bonds, the
Issuer shall execute and the Indenture Trustee shall authenticate and make
available for delivery, in exchange therefor, Definitive Bonds of authorized
denominations and of like tenor, class and aggregate principal amount. Until so
exchanged, such temporary Bonds shall in all respects be entitled to the same
benefits under this Indenture as Definitive Bonds.

      Section 4.15 REPRESENTATION REGARDING ERISA. By acquiring a Class 1-A-1,
Class 1-A-2 or Class 2-A Bond or interest therein, each Holder of such Bond or
Beneficial Owner of any such interest will be deemed to represent that either
(1) it is not acquiring such Bond with Plan Assets or (2) (A) the acquisition,
holding and transfer of such Bond will not give rise to a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and (B) the
Bonds are rated investment grade or better and such purchaser agrees to treat
them as indebtedness for federal income tax purposes. Alternatively, regardless
of the rating of such Bonds, such person may provide the Indenture Trustee and
the Owner Trustee with an opinion of counsel, which opinion of counsel will not
be at the expense of the Issuer, the Seller, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master Servicer or any successor
servicer, which opines that the acquisition, holding and transfer of such Bond
or interest therein is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under ERISA or Section 4975 of the
Code and will not subject the Issuer, the Seller, the Depositor, any
Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or
any successor servicer to any obligation in addition to those undertaken in the
Indenture.

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                                    ARTICLE V

                              Default and Remedies

      Section 5.01 EVENTS OF DEFAULT. The Issuer shall deliver to the Indenture
Trustee and the Bond Insurer, within five days after learning of the occurrence
of an Event of Default, written notice in the form of an Officer's Certificate
of any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii) or (iv) of the definition of "Event of
Default", its status and what action the Issuer is taking or proposes to take
with respect thereto. The Indenture Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer has actual
knowledge thereof or unless written notice of such Event of Default is received
by a Responsible Officer and such notice references the Bonds, the Trust Estate
or this Indenture.

      Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee at the written direction of the Holders of Bonds representing
not less than a majority of the aggregate Bond Principal Balance of the Bonds
may declare the Bonds to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if such notice is given by
Bondholders), and upon any such declaration the unpaid Bond Principal Balance of
the Class A Bonds and Class M Bonds, together with accrued and unpaid interest
thereon through the date of acceleration shall become immediately due and
payable.

      At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, Holders of the Bonds representing not
less than a majority of the aggregate Bond Principal Balance of the Bonds, by
written notice to the Issuer and the Indenture Trustee, may waive the related
Event of Default and rescind and annul such declaration and its consequences if

                  (i) the Issuer has paid or deposited with the Indenture
      Trustee a sum sufficient to pay:

                  (A) all payments of principal of and interest on the Bonds and
            all other amounts that would then be due hereunder or upon the Bonds
            if the Event of Default giving rise to such acceleration had not
            occurred;

                  (B) all sums paid or advanced by the Indenture Trustee
            hereunder and the reasonable compensation, expenses, disbursements
            and advances of the Indenture Trustee and its agents and counsel;
            and

                  (C) all amounts owed to the Derivative Contract Counterparty;
            and

                  (ii) all Events of Default, other than the nonpayment of the
      principal of the Bonds that has become due solely by such acceleration,
      have been cured or waived as provided in Section 5.12.

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<PAGE>

No such rescission shall affect any subsequent default or impair any right
consequent thereto.

      Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.

      (a) The Issuer covenants that if (i) default is made in the payment of any
interest on any Bond when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment of
the principal of or any installment of the principal of any Bond when the same
becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee,
at the direction of the Holders of a majority of the aggregate Bond Principal
Balances of the Bonds, pay to the Indenture Trustee, for the benefit of the
Holders of Bonds, the whole amount then due and payable on the Bonds for
principal and interest, with interest at the applicable Bond Interest Rate upon
the overdue principal, and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.

      (b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.16 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Bonds and collect in the manner provided by
law out of the property of the Issuer or other obligor the Bonds, wherever
situated, the monies adjudged or decreed to be payable.

      (c) If an Event of Default occurs and is continuing, the Indenture
Trustee, subject to the provisions of Section 10.16 hereof may, as more
particularly provided in Section 5.04 hereof, in its discretion, proceed to
protect and enforce its rights and the rights of the Bondholders, by such
appropriate Proceedings, as directed in writing by Holders of a majority of the
aggregate Bond Principal Balances of the Bonds, to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.

      (d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Bonds or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Bonds, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, as directed in writing by Holders
of a majority of the aggregate Bond Principal Balances of the Bonds,
irrespective of whether the principal of any Bonds shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:

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<PAGE>

                  (i) to file and prove a claim or claims for the whole amount
      of principal and interest owing and unpaid in respect of the Bonds and to
      file such other papers or documents as may be necessary or advisable in
      order to have the claims of the Indenture Trustee (including any claim for
      reasonable compensation to the Indenture Trustee and each predecessor
      Indenture Trustee, and their respective agents, attorneys and counsel, and
      for reimbursement of all expenses and liabilities incurred, and all
      advances made, by the Indenture Trustee and each predecessor Indenture
      Trustee, except as a result of negligence or bad faith) and of the
      Bondholders allowed in such Proceedings;

                  (ii) unless prohibited by applicable law and regulations, to
      vote on behalf of the Holders of Bonds in any election of a trustee, a
      standby trustee or Person performing similar functions in any such
      Proceedings;

                  (iii) to collect and receive any monies or other property
      payable or deliverable on any such claims and to distribute all amounts
      received with respect to the claims of the Bondholders and of the
      Indenture Trustee on their behalf, and

                  (iv) to file such proofs of claim and other papers or
      documents as may be necessary or advisable in order to have the claims of
      the Indenture Trustee or the Holders of Bonds allowed in any judicial
      proceedings relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Bondholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Bondholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee and all amounts due to the Bond Insurer.

      (e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Bondholder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Bondholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.

      (f) All rights of action and of asserting claims under this Indenture, or
under any of the Bonds, may be enforced by the Indenture Trustee without the
possession of any of the Bonds or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Bonds, subject to Section 5.05 hereof.

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<PAGE>

      (g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Bonds, and it shall not be necessary to
make any Bondholder a party to any such Proceedings.

      Section 5.04 REMEDIES; PRIORITIES. (a) If an Event of Default shall have
occurred and be continuing and if an acceleration has been declared and not
rescinded pursuant to Section 5.02 hereof, the Indenture Trustee subject to the
provisions of Section 10.16 hereof may, and shall, at the written direction of
the Holders of a majority of the aggregate Bond Principal Balances of the Bonds,
do one or more of the following (subject to Section 5.05 hereof):

                  (i) institute Proceedings in its own name and as trustee of an
      express trust for the collection of all amounts then payable on the Bonds
      or under this Indenture with respect thereto, whether by declaration or
      otherwise enforce any judgment obtained, and collect from the Issuer and
      any other obligor upon such Bonds monies adjudged due;

                  (ii) institute Proceedings from time to time for the complete
      or partial foreclosure of this Indenture with respect to the Trust Estate;

                  (iii) exercise any remedies of a secured party under the UCC
      and take any other appropriate action to protect and enforce the rights
      and remedies of the Indenture Trustee and the Holders of the Bonds; and

                  (iv) sell the Trust Estate or any portion thereof or rights or
      interest therein, at one or more public or private sales called and
      conducted in any manner permitted by law;

PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Bond Principal Balance of the Bonds, (B) the proceeds of such sale or
liquidation distributable to the Holders of the Bonds are sufficient to
discharge in full all amounts then due and unpaid upon such Bonds for principal
and interest and to reimburse the Bond Insurer for any amounts drawn under the
Bond Insurance Policy and any other amounts due to the Bond Insurer under the
Bond Insurance Policy or (C) the Indenture Trustee determines that the Mortgage
Loans will not continue to provide sufficient funds for the payment of principal
of and interest on the applicable Bonds as they would have become due if the
Bonds had not been declared due and payable, and the Indenture Trustee obtains
the consent of the Holders of a majority of the aggregate Bond Principal Balance
of the Bonds. In determining such sufficiency or insufficiency with respect to
clause (B) and (C), the Indenture Trustee may, but need not, obtain and rely
upon an opinion (obtained at the expense of the Trust) of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose. Notwithstanding the foregoing, so long as an Event of
Servicer Termination has not occurred, any Sale of the Trust Estate shall be
made subject to the continued servicing of the Mortgage Loans by the Master
Servicer as provided in the Servicing Agreement.

      (b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order;
provided, however, that any amounts

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<PAGE>

representing payments from the Bond Insurer shall only be used to pay interest
and principal to the Class 2-A Bondholders pursuant to clauses FOURTH and FIFTH
below:

            FIRST: to the Indenture Trustee for amounts due under Section 6.07
      hereof;

            SECOND: to the Derivative Contract Counterparty, any amounts owed
      under the Derivative Contracts, other than any Additional Derivative
      Contract Counterparty Payment;

            THIRD: to the Bond Insurer, provided no Bond Insurer Default exists,
      with respect to any Premium Amount then due to the extent unpaid pursuant
      to the Servicing Agreement;

            FOURTH: to the Bondholders for amounts due and unpaid on the Bonds
      (including Unpaid Interest Shortfalls but not including any Basis Risk
      Shortfall Carry-Forward Amounts) with respect to interest, first, to the
      Class 1-A-1, Class 1-A-2 and Class 2-A Bondholders, concurrently, second,
      to the Class M-1-1 Bondholders and Class M-1-2 Bondholders, concurrently,
      third to the Class M-2-1 Bondholders and Class M-2-2 Bondholders,
      concurrently, fourth to the Class M-3-1 Bondholders and Class M-3-2
      Bondholders, concurrently, fifth to the Class M-4-1 Bondholders and Class
      M-4-2 Bondholders, concurrently, and sixth to the Class M-5-1 Bondholders
      and Class M-5-2 Bondholders, concurrently, according to the amounts due
      and payable on the Bonds for interest;

            FIFTH: to Bondholders for amounts due and unpaid on the Bonds with
      respect to principal, and to each Bondholder ratably, without preference
      or priority of any kind, according to the amounts due and payable on such
      Bonds for principal, until the Bond Principal Balance of each such Class
      is reduced to zero;

            SIXTH: to the payment of all amounts due and owing to the Bond
      Insurer under the Bond Insurance Policy (including any Premium Amount not
      paid pursuant to clause THIRD above);

            SEVENTH: to the Bondholders, first, to the Class 1-A-2 Bondholders,
      second to the Class M-1-1 Bondholders and Class M-1-2 Bondholders,
      concurrently, third to the Class M- 2-1 Bondholders and Class M-2-2
      Bondholders, concurrently, fourth to the Class M-3-1 Bondholders and Class
      M-3-2 Bondholders, concurrently, fifth to the Class M-4-1 Bondholders and
      Class M-4-2 Bondholders, concurrently, and sixth to the Class M-5-1
      Bondholders and Class M-5-2 Bondholders, concurrently, the amount of any
      related Allocated Realized Loss Amount not previously paid;

            EIGHTH: to the Bondholders for amounts due and unpaid on the Bonds
      with respect to any related Basis Risk Shortfall Carry-Forward Amounts,
      first, to the Class 1-A-1, Class 1-A-2 and Class 2-A Bondholders,
      concurrently on a pro rata basis, second, to the Class M-1- 1 Bondholders
      and Class M-1-2 Bondholders, concurrently, third to the Class M-2-1
      Bondholders and Class M-2-2 Bondholders, concurrently, fourth to the Class
      M-3-1 Bondholders and Class M-3-2 Bondholders, concurrently, fifth to the
      Class M-4-1 Bondholders and Class M-4-2 Bondholders, concurrently, and
      sixth to the Class M-5-1

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<PAGE>

      Bondholders and Class M-5-2 Bondholders, concurrently, according to the
      amounts due and payable on the Bonds with respect thereto, from amounts
      available in the Trust Estate for the Bondholders;

            NINTH: to the Derivative Contract Counterparty, any remaining
      amounts owed under the Derivative Contracts; and

            TENTH: to the payment of the remainder, if any to the Certificate
      Paying Agent on behalf of the Issuer or to any other person legally
      entitled thereto.

      The Indenture Trustee may fix a record date and Payment Date for any
payment to Bondholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Bondholder a notice
that states the record date, the Payment Date and the amount to be paid.

      Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Bonds have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may elect to take and maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Bondholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Bonds and other obligations of the Issuer, including payment to
the Bond Insurer, and the Indenture Trustee, unless directed otherwise by the
Bond Insurer, shall take such desire into account when determining whether or
not to take and maintain possession of the Trust Estate. In determining whether
to take and maintain possession of the Trust Estate, the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.

      Section 5.06 LIMITATION OF SUITS. No Holder of any Bond shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.16 hereof

                  (i) such Holder has previously given written notice to the
      Indenture Trustee of a continuing Event of Default;

                  (ii) the Holders of not less than 25% of the aggregate Bond
      Principal Balances of the Bonds have made a written request to the
      Indenture Trustee to institute such Proceeding in respect of such Event of
      Default in its own name as Indenture Trustee hereunder;

                  (iii) such Holder or Holders have offered to the Indenture
      Trustee reasonable indemnity against the costs, expenses and liabilities
      to be incurred in complying with such request;

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                  (iv) the Indenture Trustee for 60 days after its receipt of
      such notice of request and offer of indemnity has failed to institute such
      Proceedings; and

                  (v) no direction inconsistent with such written request has
      been given to the Indenture Trustee during such 60-day period by the
      Holders of a majority of the Bond Principal Balances of the Bonds.

It is understood and intended that no one or more Holders of Bonds shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Bonds or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.

      Subject to the last paragraph of Section 5.11 herein, in the event the
Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Bonds, each representing less
than a majority of the Bond Principal Balances of the Bonds, the Indenture
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.

      Section 5.07 UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST. Notwithstanding any other provisions in this Indenture, the Holder of
any Bond shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Bond on or after the
respective due dates thereof expressed in such Bond or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.

      Section 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture Trustee
or any Bondholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Bondholder, then and in every such case the Issuer, the Indenture Trustee and
the Bondholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Bondholders
shall continue as though no such Proceeding had been instituted.

      Section 5.09 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Bondholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

      Section 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of the
Indenture Trustee or any Holder of any Bond to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture

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Trustee or to the Bondholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Bondholders, as
the case may be.

      Section 5.11 CONTROL BY BONDHOLDERS. The Holders of a majority of the
aggregate Bond Principal Balances of Bonds shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Bonds or exercising any trust or power
conferred on the Indenture Trustee; provided that:

                  (i) such direction shall not be in conflict with any rule of
      law or with this Indenture;

                  (ii) any direction to the Indenture Trustee to sell or
      liquidate the Trust Estate shall be by Holders of Bonds representing not
      less than 100% of the Bond Principal Balances of the Bonds; and

                  (iii) the Indenture Trustee may take any other action deemed
      proper by the Indenture Trustee that is not inconsistent with such
      direction of the Holders of Bonds representing a majority of the Bond
      Principal Balances of the Bonds.

Notwithstanding the rights of Bondholders set forth in this Section 5.11 the
Indenture Trustee need not take any action that it determines might involve it
in liability.

      Section 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Bonds as provided in Section 5.02 hereof,
the Holders of Bonds representing not less than a majority of the aggregate Bond
Principal Balance of the Bonds may waive any past Event of Default and its
consequences except an Event of Default (a) with respect to payment of principal
of or interest on any of the Bonds, (b) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the Holder of
each Bond or (c) the waiver of which would materially and adversely affect the
interests of the Bond Insurer or modify its obligations under the Bond Insurance
Policy. In the case of any such waiver, the Issuer, the Indenture Trustee and
the Holders of the Bonds shall be restored to their former positions and rights
hereunder, respectively, but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereto.

      Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.

      Section 5.13 UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of any Bond and each Beneficial Owner of any interest therein by
such Holder's or Beneficial Owner's acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses

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<PAGE>

made by such party litigant; but the provisions of this Section 5.13 shall not
apply to (a) any suit instituted by the Indenture Trustee, (b) any suit
instituted by any Bondholder, or group of Bondholders, in each case holding in
the aggregate more than 10% of the Bond Principal Balances of the Bonds or (c)
any suit instituted by any Bondholder for the enforcement of the payment of
principal of or interest on any Bond on or after the respective due dates
expressed in such Bond and in this Indenture.

      Section 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.

      Section 5.15 SALE OF TRUST ESTATE. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 hereof is expressly subject to the provisions of Section 5.05
hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Bonds and under this
Indenture and under the Bond Insurance Policy shall have been paid. The
Indenture Trustee may from time to time postpone any public Sale by public
announcement made at the time and place of such Sale. The Indenture Trustee
hereby expressly waives its right to any amount fixed by law as compensation for
any Sale.

      (b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless

            (1) the Holders of all Bonds consent to or direct the Indenture
      Trustee to make, such Sale, or

            (2) the proceeds of such Sale would be not less than the entire
      amount which would be payable to the Bondholders under the Bonds and the
      Bond Insurer in respect of amounts drawn under the Bond Insurance Policy,
      in full payment thereof in accordance with Section 5.02 hereof, on the
      Payment Date next succeeding the date of such Sale, or

            (3) the Indenture Trustee determines that the conditions for
      retention of the Trust Estate set forth in Section 5.05 hereof cannot be
      satisfied (in making any such determination, the Indenture Trustee may
      rely upon an opinion of an Independent investment banking firm obtained
      and delivered as provided in Section 5.05 hereof), the Holders of Bonds
      representing at least 100% of the Bond Principal Balances of the Bonds
      consent to such Sale.

The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).

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      (c) Unless the Holders representing at least 66-2/3% of the Bond Principal
Balances of the Bonds have otherwise consented or directed the Indenture
Trustee, at any public Sale of all or any portion of the Trust Estate at which a
minimum bid equal to or greater than the amount described in paragraph (2) of
subsection (b) of this Section 5.15 has not been established by the Indenture
Trustee and no Person bids an amount equal to or greater than such amount, the
Indenture Trustee, as trustee for the benefit of the Holders of the Bonds, shall
bid an amount at least $1.00 more than the highest other bid.

      (d) In connection with a Sale of all or any portion of the Trust Estate,

            (1) any Holder or Holders of Bonds may bid for and purchase the
      property offered for sale, and upon compliance with the terms of sale may
      hold, retain and possess and dispose of such property, without further
      accountability, and may, in paying the purchase money therefor, deliver
      any Bonds or claims for interest thereon in lieu of cash up to the amount
      which shall, upon distribution of the net proceeds of such sale, be
      payable thereon, and such Bonds, in case the amounts so payable thereon
      shall be less than the amount due thereon, shall be returned to the
      Holders thereof after being appropriately stamped to show such partial
      payment;

            (2) the Indenture Trustee, may bid for and acquire the property
      offered for Sale in connection with any Sale thereof, and, subject to any
      requirements of, and to the extent permitted by, applicable law in
      connection therewith, may purchase all or any portion of the Trust Estate
      in a private sale, and, in lieu of paying cash therefor, may make
      settlement for the purchase price by crediting the gross Sale price
      against the sum of (A) the amount which would be distributable to the
      Holders of the Bonds and Holders of Certificates and amounts distributable
      to the Bond Insurer as a result of such Sale in accordance with Section
      5.04(b) hereof on the Payment Date next succeeding the date of such Sale
      and (B) the expenses of the Sale and of any Proceedings in connection
      therewith which are reimbursable to it, without being required to produce
      the Bonds in order to complete any such Sale or in order for the net Sale
      price to be credited against such Bonds, and any property so acquired by
      the Indenture Trustee shall be held and dealt with by it in accordance
      with the provisions of this Indenture;

            (3) the Indenture Trustee shall execute and deliver an appropriate
      instrument of conveyance, prepared by the Issuer and satisfactory to the
      Indenture Trustee, transferring its interest in any portion of the Trust
      Estate in connection with a Sale thereof;

            (4) the Indenture Trustee is hereby irrevocably appointed the agent
      and attorney- in-fact of the Issuer to transfer and convey its interest in
      any portion of the Trust Estate in connection with a Sale thereof, and to
      take all action necessary to effect such Sale; and

            (5) no purchaser or transferee at such a Sale shall be bound to
      ascertain the Indenture Trustee's authority, inquire into the satisfaction
      of any conditions precedent or see to the application of any monies.

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      Section 5.16 ACTION ON BONDS. The Indenture Trustee's right to seek and
recover judgment on the Bonds or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Bondholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b) hereof.

      Section 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer in
its capacity as holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller and the Master Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Mortgage Loan Purchase Agreement, any Group 1 or Group 2 Subsequent Mortgage
Loan Purchase Agreement and the Servicing Agreement, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Mortgage Loan Purchase Agreement, any Group 1 or Group
2 Subsequent Mortgage Loan Purchase Agreement and the Servicing Agreement to the
extent and in the manner directed by the Indenture Trustee, as pledgee of the
Mortgage Loans, including the transmission of notices of default on the part of
the Seller or the Master Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Master Servicer of each of their obligations under the Mortgage
Loan Purchase Agreement, any Group 1 or Group 2 Subsequent Mortgage Loan
Purchase Agreement and the Servicing Agreement.

      (b) The Indenture Trustee, as pledgee of the Mortgage Loans, may, and at
the direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3% of the Bond Principal
Balances of the Bonds, shall exercise all rights, remedies, powers, privileges
and claims of the Issuer against the Seller or the Master Servicer under or in
connection with the Mortgage Loan Purchase Agreement, any Group 1 or Group 2
Subsequent Mortgage Loan Purchase Agreement and the Servicing Agreement,
including the right or power to take any action to compel or secure performance
or observance by the Seller or the Master Servicer, as the case may be, of each
of their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Mortgage Loan
Purchase Agreement, any Group 1 or Group 2 Subsequent Mortgage Loan Purchase
Agreement and the Servicing Agreement, as the case may be, and any right of the
Issuer to take such action shall not be suspended.

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                                   ARTICLE VI

                              The Indenture Trustee

      Section 6.01 DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture 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.

      (b) Except during the continuance of an Event of Default:

                  (i) the Indenture Trustee undertakes to perform such duties
      and only such duties as are specifically set forth in this Indenture and
      no implied covenants or obligations shall be read into this Indenture
      against the Indenture Trustee; and

                  (ii) in the absence of bad faith on its part, the Indenture
      Trustee may conclusively rely, as to the truth of the statements and the
      correctness of the opinions expressed therein, upon certificates or
      opinions furnished to the Indenture Trustee and conforming to the
      requirements of this Indenture; however, the Indenture Trustee shall
      examine the certificates and opinions to determine whether or not they
      conform to the requirements of this Indenture.

      (c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:

                  (i) this paragraph does not limit the effect of paragraph (b)
      of this Section 6.01;

                  (ii) the Indenture Trustee shall not be liable for any error
      of judgment made in good faith by a Responsible Officer unless it is
      proved that the Indenture Trustee was negligent in ascertaining the
      pertinent facts; and

                  (iii) the Indenture Trustee shall not be liable with respect
      to any action it takes or omits to take in good faith in accordance with a
      direction received by it from Bondholders or from the Issuer, which they
      are entitled to give under the Basic Documents.

      (d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.

      (e) Money held in trust by the Indenture Trustee need not be segregated
from other trust funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.

      (f) No provision of this Indenture shall require the Indenture Trustee 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 it shall have reasonable grounds to believe that

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<PAGE>

repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

      (g) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.

      (h) The Indenture Trustee shall act in accordance with Sections 6.03 and
6.04 of the Servicing Agreement and shall act as successor to the Master
Servicer or appoint a successor Master Servicer in accordance with Section 6.02
of the Servicing Agreement.

      Section 6.02 RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.

      (b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.

      (c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee.

      (d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.

      (e) The Indenture Trustee may consult with counsel, and the advice or
Opinion of Counsel with respect to legal matters relating to this Indenture and
the Bonds shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.

      (f) For the limited purpose of effecting any action to be undertaken by
the Indenture Trustee, but not specifically as a duty of the Indenture Trustee
in the Indenture, the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder, either directly or by or through
agents, attorneys, custodians or nominees appointed with due care, and shall not
be responsible for any willful misconduct or negligence on the part of any
agent, attorney, custodian or nominee so appointed.

      (g) The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder servicing agent, custodian or sub-custodian with respect to certain
of the Eligible Investments, (ii) using Affiliates to effect transactions in
certain Eligible Investments and (iii) effecting transactions in certain
Eligible Investments. Such compensation shall not be considered an amount that
is reimbursable or payable to the Indenture Trustee (i) as part of the Indenture
Trustee Fee, (ii) pursuant to Sections 3.05(d), 3.05(h), 5.04(b), 6.07 or
8.02(c) hereunder or (iii) out of Available Funds.

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<PAGE>

      (h) In order to comply with its duties under the USA Patriot Act, the
Indenture Trustee shall obtain and verify certain information and documentation
from the other party to this Indenture, including, but not limited to, such
party's name, address, and other identifying information.

      Section 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Bonds
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee, subject to the requirements of the
Trust Indenture Act. Any Bond Registrar, co-registrar or co-paying agent may do
the same with like rights. However, the Indenture Trustee must comply with
Sections 6.11 and 6.12 hereof.

      Section 6.04 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Bonds, it shall not be accountable for the
Issuer's use of the proceeds from the Bonds, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Bonds or in the Bonds other than the Indenture
Trustee's certificate of authentication.

      Section 6.05 NOTICE OF EVENT OF DEFAULT. Subject to Section 5.01, the
Indenture Trustee shall promptly mail to each Bondholder and the Bond Insurer
notice of the Event of Default after it is known to a Responsible Officer of the
Indenture Trustee, unless such Event of Default shall have been waived or cured.
Except in the case of an Event of Default in payment of principal of or interest
on any Bond, the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of Bondholders.

      Section 6.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX
ADMINISTRATION. The Indenture Trustee shall deliver to each Bondholder such
information as may be required to enable such holder to prepare its federal and
state income tax returns.

      The Indenture Trustee shall prepare and file (or cause to be prepared and
filed), on behalf of the Owner Trustee, all tax returns (if any) and information
reports, tax elections and such annual or other reports of the Issuer as are
necessary for preparation of tax returns and information reports as provided in
Section 5.03 of the Trust Agreement, including without limitation Form 1099. All
tax returns and information reports shall be signed by the Owner Trustee as
provided in Section 5.03 of the Trust Agreement.

      Section 6.07 COMPENSATION AND INDEMNITY. The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The amount of the Indenture Trustee's Fee shall be deposited by the Master
Servicer into the Payment Account pursuant to Section 3.07(a)(x) of the
Servicing Agreement and all amounts owing to the Indenture Trustee hereunder
(including amounts owing from the Issuer for indemnification and otherwise)
shall be paid solely as provided in Section 3.05(d)(xii), Section 3.05(h)(xii)
and Section 5.04(b) hereof. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to
compensation for its services. Such expenses shall include reasonable
compensation and expenses, disbursements and

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<PAGE>

advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer shall indemnify the Indenture Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this Trust and the performance of its duties
hereunder. The Indenture Trustee shall notify the Issuer promptly of any claim
for which it may seek indemnity. Failure by the Indenture Trustee to so notify
the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer
shall defend any such claim, and the Indenture Trustee may have separate counsel
and the Issuer shall pay the fees and expenses of such counsel. The Issuer is
not obligated to reimburse any expense or indemnify against any loss, liability
or expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct, negligence or bad faith.

      The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section 6.07 shall survive the discharge of this Indenture and the termination
or resignation of the Indenture Trustee. When the Indenture Trustee incurs
expenses after the occurrence of an Event of Default with respect to the Issuer,
the expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.

      Section 6.08 REPLACEMENT OF INDENTURE TRUSTEE. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer. Holders of a majority of Bond
Principal Balances of the Bonds may remove the Indenture Trustee by so notifying
the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer
shall, remove the Indenture Trustee if:

                  (i) the Indenture Trustee fails to comply with Section 6.11
      hereof;

                  (ii) the Indenture Trustee is adjudged a bankrupt or
      insolvent;

                  (iii) a receiver or other public officer takes charge of the
      Indenture Trustee or its property; or

                  (iv) the Indenture Trustee otherwise becomes incapable of
      acting.

      If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall, promptly appoint a successor Indenture Trustee.

      A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Bondholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

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<PAGE>

      If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority of Bond Principal Balances of
the Bonds may petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee.

      Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.

      Section 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall
provide the Rating Agencies with prior written notice of any such transaction.

      If at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture and any of the Bonds shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee and deliver such Bonds so
authenticated; and if at that time any of the Bonds shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Bonds either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is in the Bonds or in this Indenture provided
that the certificate of the Indenture Trustee shall have.

      Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Bondholders, such title to the Trust Estate, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 hereof.

      (b) 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 Indenture Trustee shall be conferred or imposed upon and
      exercised or performed by the Indenture 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 Indenture
      Trustee joining in such act), except to the extent that under any law of
      any jurisdiction in

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      which any particular act or acts are to be performed the Indenture 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 Estate 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 Indenture
      Trustee;

                  (ii) no trustee hereunder shall be personally liable by reason
      of any act or omission of any other trustee hereunder; and

                  (iii) the Indenture Trustee may at any time accept the
      resignation of or remove any separate trustee or co-trustee.

      (c) Any notice, request or other writing given to the Indenture 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 Indenture and
the conditions of this Article VI. 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
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.

      (d) Any separate trustee or co-trustee may at any time constitute the
Indenture 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 Indenture 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

      Section 6.11 ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of Baa3 or better by Moody's and BBB or
better by Standard & Poor's. The Indenture Trustee shall comply with TIA ss.
310(b), including the optional provision permitted by the second sentence of TIA
ss. 310(b)(9); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA ss. 310(b)(1) are met.

      Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.

      Section 6.13 REPRESENTATIONS AND WARRANTIES. The Indenture Trustee hereby
represents that:

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                  (i) The Indenture Trustee is duly organized and validly
      existing as an association in good standing under the laws of the United
      States with power and authority to own its properties and to conduct its
      business as such properties are currently owned and such business is
      presently conducted;

                  (ii) The Indenture Trustee has the power and authority to
      execute and deliver this Indenture and to carry out its terms; and the
      execution, delivery and performance of this Indenture have been duly
      authorized by the Indenture Trustee by all necessary corporate action;

                  (iii) The consummation of the transactions contemplated by
      this Indenture and the fulfillment of the terms hereof do not conflict
      with, result in any breach of any of the terms and provisions of, or
      constitute (with or without notice or lapse of time) a default under, the
      articles of incorporation or bylaws of the Indenture Trustee or any
      agreement or other instrument to which the Indenture Trustee is a party or
      by which it is bound; and

                  (iv) To the Indenture Trustee's knowledge, there are no
      proceedings or investigations pending or threatened before any court,
      regulatory body, administrative agency or other governmental
      instrumentality having jurisdiction over the Indenture Trustee or its
      properties: (A) asserting the invalidity of this Indenture (B) seeking to
      prevent the consummation of any of the transactions contemplated by this
      Indenture or (C) seeking any determination or ruling that might materially
      and adversely affect the performance by the Indenture Trustee of its
      obligations under, or the validity or enforceability of, this Indenture.

      Section 6.14 DIRECTIONS TO INDENTURE TRUSTEE. The Indenture Trustee is
hereby directed:

      (a) to accept the pledge of the Mortgage Loans and hold the assets of the
Trust Estate in trust for the Bondholders;

      (b) to authenticate and deliver the Bonds substantially in the form
prescribed by Exhibits A-1 and A-2 to this Indenture in accordance with the
terms of this Indenture; and

      (c) to take all other actions as shall be required to be taken by the
terms of this Indenture.

      Section 6.15 THE AGENTS. The provisions of this Indenture relating to the
limitations of the Indenture Trustee's liability and to its indemnity, rights
and protections shall inure also to the Paying Agent and Bond Registrar.

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                                   ARTICLE VII

                         Bondholders' Lists and Reports

      Section 7.01 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
BONDHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Bonds as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; PROVIDED, HOWEVER,
that so long as the Indenture Trustee is the Bond Registrar, no such list shall
be required to be furnished to the Indenture Trustee.

      Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Bonds contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
hereof and the names and addresses of Holders of Bonds received by the Indenture
Trustee in its capacity as Bond Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.

      (b) Bondholders may communicate pursuant to TIA ss. 312(b) with other
Bondholders with respect to their rights under this Indenture or under the
Bonds.

      (c) The Issuer, the Indenture Trustee and the Bond Registrar shall have
the protection of TIA ss. 312(c).

      Section 7.03 REPORTS OF ISSUER. (a) Subject to Section 4.06 of the
Servicing Agreement (i) The Indenture Trustee shall file with the Commission on
behalf of the Issuer, with a copy to the Issuer within 15 days before the Issuer
is required to file the same with the Commission, the annual reports and the
information, documents and other reports (or such portions of any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) that the Issuer may be required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act;

                  (ii) The Indenture Trustee shall file with the Commission, on
      behalf of the Issuer, in accordance with rules and regulations prescribed
      from time to time by the Commission such additional information, documents
      and reports with respect to compliance by the Issuer with the conditions
      and covenants of this Indenture as may be required from time to time by
      such rules and regulations; and

                  (iii) The Indenture Trustee shall supply (and the Indenture
      Trustee shall transmit by mail to all Bondholders described in TIA ss.
      313(c)) such summaries of any information, documents and reports required
      to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section
      7.03(a) and by rules and regulations prescribed from time to time by the
      Commission.

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      (b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.

      Section 7.04 REPORTS BY INDENTURE TRUSTEE. If required by TIA ss. 313(a),
within 60 days after each January 30 beginning with March 31, 2005, the
Indenture Trustee shall mail to each Bondholder as required by TIA ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). The
Indenture Trustee also shall comply with TIA ss. 313(b).

      A copy of each such report at the time of its mailing to Bondholders shall
be filed by the Indenture Trustee with the Commission via EDGAR and each stock
exchange, if any, on which the Bonds are listed. The Issuer shall notify the
Indenture Trustee if and when the Bonds are listed on any stock exchange.

      Section 7.05 STATEMENTS TO BONDHOLDERS. (a) With respect to each Payment
Date, the Indenture Trustee shall make available via the Indenture Trustee's
website https://www.corporatetrust.db.com/invr or deliver at the recipient's
option to each Bondholder and each Certificateholder, the Derivative Contract
Counterparty, the Depositor, the Bond Insurer, the Owner Trustee, the
Certificate Paying Agent and each Rating Agency, a statement setting forth the
following information as to the Bonds, to the extent applicable:

                  (i) the aggregate amount of collections with respect to the
      Mortgage Loans;

                  (ii) the Group 1 Available Funds, Group 2 Available Funds and
      Net Monthly Excess Cash Flow, with respect to the Group 1 Loans and Group
      2 Loans, payable to each Class of Bondholders for such Payment Date, the
      Basis Risk Shortfall Carry-Forward Amount on each Class of Bonds for such
      Payment Date and the aggregate Unpaid Interest Shortfall on each Class of
      Bonds for such Payment Date;

                  (iii) (a) the amount of such distribution to each Class of
      Class 1-A-1, Class 1-A-2, Class M-1-1, Class M-2-1, Class M-3-1, Class
      M-4-1, Class M-5-1, Class 2-A, Class M-1-2, Class M-2-2, Class M-3-2,
      Class M-4-2 and Class M-5-2 Bonds applied to reduce the Bond Principal
      Balance thereof, and (b) the aggregate amount included therein
      representing Principal Prepayments;

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

                  (v) the amount of such distribution to the Certificates;

                  (vi) if the distribution to the Holders of any Class of Bonds
      is less than the full amount that would be distributable to such Holders
      if there were sufficient funds available therefor, the amount of the
      shortfall;

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                  (vii) the number and the aggregate Stated Principal Balance of
      the Mortgage Loans as of the end of the related Due Period, determined in
      the aggregate and separately for Loan Group 1 and Loan Group 2;

                  (viii) the aggregate Bond Principal Balance of each Class of
      Bonds, after giving effect to the amounts distributed on such Payment
      Date, separately identifying any reduction thereof due to Realized Losses
      other than pursuant to an actual distribution of principal and the
      aggregate Bond Principal Balance of all of the Class 1-A-1, Class 1-A-2,
      Class M-1-1, Class M-2-1, Class M-3-1, Class M-4-1, Class M-5-1, Class
      2-A, Class M-1-2, Class M-2-2, Class M-3-2, Class M-4-2 and Class M-5-2
      Bonds after giving effect to the distribution of principal on such Payment
      Date;

                  (ix) the number and aggregate Stated Principal Balances of
      Mortgage Loans (a) as to which the Monthly Payment is delinquent for 31-60
      days, 61-90 days, 91 or more days, respectively, (b) in foreclosure and
      (c) that have become REO Property, in each case as of the end of the
      preceding calendar month, determined in the aggregate and separately for
      Loan Group 1 and Loan Group 2;

                  (x) the Net Derivative Contract Payment Amount;

                  (xi) the Overcollateralization Increase Amount with respect to
      each Loan Group, Overcollateralization Release Amount,
      Overcollateralization Target Amount and Overcollateralized Amount, if any,
      in each case as the end of the related Payment Date, in each case as
      determined separately for each Loan Group;

                  (xii) the amount of any Advances and Compensating Interest
      payments;

                  (xiii) the aggregate Realized Losses with respect to the
      related Payment Date and cumulative Realized Losses since the Closing
      Date;

                  (xiv) the number and aggregate Stated Principal Balance of
      Mortgage Loans repurchased pursuant to the Mortgage Loan Purchase
      Agreement for the related Payment Date and cumulatively since the Closing
      Date determined in the aggregate and separately for Loan Group 1 and Loan
      Group 2;

                  (xv) the book value of any REO Property;

                  (xvi) the amount of any Prepayment Interest Shortfalls or
      Relief Act Shortfalls for such Payment Date;

                  (xvii) the aggregate Stated Principal Balance of Mortgage
      Loans purchased pursuant to Section 3.18 of the Servicing Agreement for
      the related Payment Date and cumulatively since the Closing Date;

                  (xviii) any Insured Amount paid for the benefit of the Class
      2-A Bonds;

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                  (xix) the amount withdrawn from the Group 1 Pre-Funding
      Account and used to make payments to Bondholders on that Payment Date, the
      amount remaining on deposit following such Payment Date, and the amount
      withdrawn from the Group 1 Pre- Funding Account used to buy certain Group
      1 Subsequent Mortgage Loans prior to such Payment Date; and

                  (xx) the amount withdrawn from the Group 2 Pre-Funding Account
      and used to make payments to Bondholders on that Payment Date, the amount
      remaining on deposit following such Payment Date, and the amount withdrawn
      from the Group 2 Pre- Funding Account used to buy certain Group 2
      Subsequent Mortgage Loans prior to such Payment Date.

      Items (iii) and (v) above shall be presented on the basis of a Bond having
a $1,000 denomination. In addition, by January 31 of each calendar year
following any year during which the Bonds are outstanding, the Indenture Trustee
shall furnish a report to each Bondholder of record if so requested in writing
at any time during each calendar year as to the aggregate of amounts reported
pursuant to (iii), (iv) and (v) with respect to the Bonds for such calendar
year.

      The Indenture Trustee may conclusively rely upon the Remittance Report
provided by the Master Servicer pursuant to Section 4.01 of the Servicing
Agreement and on the amount of the Net Derivative Contract Payment Amount
furnished to the Indenture Trustee pursuant to the Derivative Contracts in its
preparation of its Statement to Bondholders.

      The Indenture Trustee will make the monthly statements provided for in
this section (and, at its option, any additional files containing the same
information in an alternative format) available each month to Bondholders, other
parties to this Agreement and any other interested parties via the Indenture
Trustee's website. The Indenture Trustee's website shall initially be located at
https://www.corporatetrust.db.com/invr. Assistance in using the website can be
obtained by calling the Trustee's customer service desk at 1-800-735-7777.
Parties that are unable to use the website are entitled to have a paper copy
ailed to them via first class mail by calling the customer service desk and
indicating such. With the consent of the Depositor, the Indenture Trustee may
have the right to change the way the monthly statements are distributed in order
to make such distribution more convenient and/or more accessible to the above
parties and the Indenture Trustee shall provide timely and adequate notification
to all above parties regarding any such changes.

      The Indenture Trustee shall be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement, and may affix thereto
any disclaimer it deems appropriate in its reasonable discretion (without
suggesting liability on the part of any other party hereto).

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                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

      Section 8.01 COLLECTION OF MONEY. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.

      Section 8.02 TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Bondholders and the Derivative
Contract Counterparty, the Payment Account as provided in Section 3.01 hereof.

      (b) All monies deposited from time to time in the Payment Account and all
deposits therein pursuant to this Indenture (other than deposits of any gain or
income on investments thereof) are for the benefit of the Bondholders. Any loss
on any investment made by the Indenture Trustee with funds in the Payment
Account shall be reimbursed immediately to the Trust Estate by the Master
Servicer. All investments made with monies in the Payment Account and the
Certificate Distribution Account including all income or other gain from such
investments shall be for the benefit of and the risk of the Master Servicer.

      (c) On each Payment Date, the Indenture Trustee shall pay itself from
amounts on deposit in the Payment Account the Indenture Trustee's Fee for such
Payment Date and then shall pay the Derivative Contract Counterparty the Net
Derivative Contract Payment Amount, excluding any Additional Derivative Contract
Counterparty Payment, and then the Indenture Trustee shall distribute all
remaining amounts on deposit in the Payment Account to the Bondholders in
respect of the Bonds and to such other persons in the order of priority set
forth in Section 3.05 hereof (except as otherwise provided in Section 5.04(b)
hereof).

      (d) The Indenture Trustee shall invest any funds in the Payment Account,
but only in Eligible Investments, as directed by the Master Servicer, maturing
no later than the Business Day preceding each Payment Date and such Eligible
Investments shall not be sold or disposed of prior to their maturity. From the
Business Day prior to the Payment Date until disbursed, such funds shall be held
uninvested and any income, gain or other benefit with respect thereto shall be
for the benefit of the Indenture Trustee.

      Section 8.03 OFFICER'S CERTIFICATE. The Indenture Trustee shall receive at
least seven Business Days' notice when requested by the Issuer to take any
action pursuant to Section 8.05(a)

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hereof, accompanied by copies of any instruments to be executed, and the
Indenture Trustee shall also require, as a condition to such action, an
Officer's Certificate, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with.

      Section 8.04 TERMINATION UPON DISTRIBUTION TO BONDHOLDERS. This Indenture
and the respective obligations and responsibilities of the Issuer and the
Indenture Trustee created hereby shall terminate upon the distribution to
Bondholders, the Bond Insurer, the Certificate Paying Agent on behalf of the
Certificateholders and the Indenture Trustee of all amounts required to be
distributed pursuant to Article III; PROVIDED, HOWEVER, that in no event shall
the trust created hereby continue beyond 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.

      Section 8.05 RELEASE OF TRUST ESTATE. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture, including for the purposes of any repurchase by
the Master Servicer of a Mortgage Loan pursuant to Section 3.18 of the Servicing
Agreement. No party relying upon an instrument executed by the Indenture Trustee
as provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent,
or see to the application of any monies.

      (b) The Indenture Trustee shall, at such time as (i) there are no Bonds
Outstanding, (ii) all sums due to the Indenture Trustee pursuant to this
Indenture have been paid and (iii) all sums due to the Bond Insurer have been
paid, release any remaining portion of the Trust Estate that secured the Bonds
from the lien of this Indenture.

      (c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate and an Opinion of Counsel stating
that all applicable requirements have been satisfied.

      Section 8.06 SURRENDER OF BONDS UPON FINAL PAYMENT. By acceptance of any
Bond, the Holder thereof agrees to surrender such Bond to the Indenture Trustee
promptly, prior to such Bondholder's receipt of the final payment thereon.

      Section 8.07 OPTIONAL REDEMPTION OF THE BONDS. (a) The Majority
Certificateholder shall have the option to redeem the Bonds in whole, but not in
part, on any Payment Date on or after the earlier of (i) the Payment Date on
which the sum of the aggregate Stated Principal Balance of the Mortgage Loans,
the Group 1 Pre-Funded Amount and the Group 2 Pre-Funded Amount is less than or
equal to 20% of the sum of the aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date, the Group 1 Original Pre-Funded Amount and
the Group 2 Original Pre-Funded Amount and (ii) the Payment Date in August 2014.
The aggregate redemption price for the Bonds will be equal to the unpaid Bond
Principal Balance of the Bonds as of the Payment Date on which

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the proposed redemption will take place in accordance with the foregoing,
together with accrued and unpaid interest thereon at the applicable Bond
Interest Rate through such Payment Date (including any related Unpaid Interest
Shortfall and Basis Risk Shortfall Carry-Forward Amount), plus an amount
sufficient to pay in full all amounts owing to the Bond Insurer and the
Indenture Trustee under this Indenture and the Bond Insurance Policy (which
amounts shall be specified in writing upon request of the Issuer by the
Indenture Trustee and the Bond Insurer) and plus an amount equal to any amounts
owing to the Derivative Contract Counterparty under the Derivative Contracts.

      (b) In order to exercise the foregoing option, the Issuer shall provide
written notice of its exercise of such option to the Indenture Trustee, the
Owner Trustee and the Master Servicer at least 15 days prior to its exercise.
Following receipt of the notice, the Indenture Trustee shall provide notice to
the Bondholders of the final payment on the Bonds. In addition, the Issuer
shall, not less than one Business Day prior to the proposed Payment Date on
which such redemption is to be made, deposit the aggregate redemption price
specified in (a) above with the Indenture Trustee, who shall deposit the
aggregate redemption price into the Payment Account and shall, on the Payment
Date after receipt of the funds, apply such funds to make final payments of
principal and interest on the Bonds in accordance with Section 3.05(b) and (c)
hereof and payment in full to the Bond Insurer for all amounts owing under the
Bond Insurance Policy and to the Indenture Trustee for all amounts payable to it
under this Indenture, and this Indenture shall be discharged subject to the
provisions of Section 4.10 hereof. If for any reason the amount deposited by the
Issuer is not sufficient to make such redemption or such redemption cannot be
completed for any reason, the amount so deposited by the Issuer with the
Indenture Trustee shall be immediately returned to the Issuer in full and shall
not be used for any other purpose or be deemed to be part of the Trust Estate.

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                                   ARTICLE IX

                             Supplemental Indentures

      Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS. (a)
Without the consent of the Holders of any Bonds but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:

                  (i) to correct or amplify the description of any property at
      any time subject to the lien of this Indenture, or better to assure,
      convey and confirm unto the Indenture Trustee any property subject or
      required to be subjected to the lien of this Indenture, or to subject to
      the lien of this Indenture additional property;

                  (ii) to evidence the succession, in compliance with the
      applicable provisions hereof, of another person to the Issuer, and the
      assumption by any such successor of the covenants of the Issuer herein and
      in the Bonds contained;

                  (iii) to add to the covenants of the Issuer, for the benefit
      of the Holders of the Bonds, or to surrender any right or power herein
      conferred upon the Issuer;

                  (iv) to convey, transfer, assign, mortgage or pledge any
      property to or with the Indenture Trustee;

                  (v) to cure any ambiguity, to correct or supplement any
      provision herein or in any supplemental indenture that may be inconsistent
      with any other provision herein or in any supplemental indenture;

                  (vi) to make any other provisions with respect to matters or
      questions arising under this Indenture or in any supplemental indenture;
      provided, that such action shall not materially and adversely affect the
      interests of the Holders of the Bonds;

                  (vii) to evidence and provide for the acceptance of the
      appointment hereunder by a successor trustee with respect to the Bonds and
      to add to or change any of the provisions of this Indenture as shall be
      necessary to facilitate the administration of the trusts hereunder by more
      than one trustee, pursuant to the requirements of Article VI hereof; or

                  (viii) to modify, eliminate or add to the provisions of this
      Indenture to such extent as shall be necessary to effect the qualification
      of this Indenture under the TIA or under any similar federal statute
      hereafter enacted and to add to this Indenture such other provisions as
      may be expressly required by the TIA;

PROVIDED, HOWEVER, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel as to the
enforceability of any such indenture

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supplement and to the effect that (i) such indenture supplement is permitted
hereunder and (ii) entering into such indenture supplement will not result in a
"substantial modification" of the Bonds under Treasury Regulation Section
1.1001-3 or adversely affect the status of the Bonds as indebtedness for federal
income tax purposes.

      The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.

      (b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Bonds and
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Bonds under this
Indenture; PROVIDED, HOWEVER, that such action as evidenced by an Opinion of
Counsel, (i) is permitted by this Indenture, and shall not (ii) adversely affect
in any material respect the interests of any Bondholder or (iii) if 100% of the
Certificates are not owned by IMH Assets Corp., cause the Issuer to be subject
to an entity level tax for federal income tax purposes.

      Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and, with the consent of the
Holders of not less than a majority of the Bond Principal Balance of each Class
of Bonds affected thereby, by Act (as defined in Section 10.03 hereof) of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Bonds under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Bond affected
thereby:

                  (i) change the date of payment of any installment of principal
      of or interest on any Bond, or reduce the principal amount thereof or the
      interest rate thereon, change the provisions of this Indenture relating to
      the application of collections on, or the proceeds of the sale of, the
      Trust Estate to payment of principal of or interest on the Bonds, or
      change any place of payment where, or the coin or currency in which, any
      Bond or the interest thereon is payable, or impair the right to institute
      suit for the enforcement of the provisions of this Indenture requiring the
      application of funds available therefor, as provided in Article V, to the
      payment of any such amount due on the Bonds on or after the respective due
      dates thereof;

                  (ii) reduce the percentage of the Bond Principal Balances of
      the Bonds, the consent of the Holders of which is required for any such
      supplemental indenture, or the consent of the Holders of which is required
      for any waiver of compliance with certain provisions of this Indenture or
      certain defaults hereunder and their consequences provided for in this
      Indenture;

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                  (iii) modify or alter the provisions of the proviso to the
      definition of the term "Outstanding" or modify or alter the exception in
      the definition of the term "Holder";

                  (iv) reduce the percentage of the Bond Principal Balances of
      the Bonds required to direct the Indenture Trustee to direct the Issuer to
      sell or liquidate the Trust Estate pursuant to Section 5.04 hereof;

                  (v) modify any provision of this Section 9.02 except to
      increase any percentage specified herein or to provide that certain
      additional provisions of this Indenture or the Basic Documents cannot be
      modified or waived without the consent of the Holder of each Bond affected
      thereby;

                  (vi) modify any of the provisions of this Indenture in such
      manner as to affect the calculation of the amount of any payment of
      interest or principal due on any Bond on any Payment Date (including the
      calculation of any of the individual components of such calculation); or

                  (vii) permit the creation of any lien ranking prior to or on a
      parity with the lien of this Indenture with respect to any part of the
      Trust Estate or, except as otherwise permitted or contemplated herein,
      terminate the lien of this Indenture on any property at any time subject
      hereto or deprive the Holder of any Bond of the security provided by the
      lien of this Indenture;

and PROVIDED, FURTHER, that such action shall not, as evidenced by an Opinion of
Counsel, cause the Issuer (if 100% of the Certificates are not owned by IMH
Assets Corp.) to be subject to an entity level tax.

      Any such action shall not adversely affect in any material respect the
interest of any Holder (other than a Holder who shall consent to such
supplemental indenture) as evidenced by an Opinion of Counsel (provided by the
Person requesting such supplemental indenture) delivered to the Indenture
Trustee.

      No supplemental indenture adverse to the interests of the Derivative
Contract Counterparty shall be entered into without the Derivative Contract
Counterparty's written consent.

      It shall not be necessary for any Act of Bondholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.

      Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Bonds to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

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      Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02 hereof, shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.

      Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Bonds affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Bonds shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

      Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.

      Section 9.06 REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES. Bonds
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Bonds so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Bonds.

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                                    ARTICLE X

                                  Miscellaneous

      Section 10.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.

      Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:

            (1) a statement that each signatory of such certificate or opinion
      has read or has caused to be read such covenant or condition and the
      definitions herein relating thereto;

            (2) a brief statement as to the nature and scope of the examination
      or investigation upon which the statements or opinions contained in such
      certificate or opinion are based;

            (3) a statement that, in the opinion of each such signatory, such
      signatory has made such examination or investigation as is necessary to
      enable such signatory to express an informed opinion as to whether or not
      such covenant or condition has been complied with;

            (4) a statement as to whether, in the opinion of each such
      signatory, such condition or covenant has been complied with; and

            (5) if the signatory of such certificate or opinion is required to
      be Independent, the statement required by the definition of the term
      "Independent".

      (b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01 (a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days prior to such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited and
a report from a nationally recognized accounting firm verifying such value.

                  (ii) Whenever the Issuer is required to furnish to the
      Indenture Trustee an Officer's Certificate certifying or stating the
      opinion of any signer thereof as to the matters described in clause (i)
      above, the Issuer shall also deliver to the Indenture Trustee an
      Independent Certificate from a nationally recognized accounting firm as to
      the same matters, if the fair value of the securities to be so deposited
      and of all other such securities made the

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      basis of any such withdrawal or release since the commencement of the then
      current fiscal year of the Issuer, as set forth in the certificates
      delivered pursuant to clause (i) above and this clause (ii), is 10% or
      more of the Bond Principal Balances of the Bonds, but such a certificate
      need not be furnished with respect to any securities so deposited, if the
      fair value thereof as set forth in the related Officer's Certificate is
      less than $25,000 or less than one percent of the Bond Principal Balances
      of the Bonds.

                  (iii) Whenever any property or securities are to be released
      from the lien of this Indenture, the Issuer shall also furnish to the
      Indenture Trustee an Officer's Certificate certifying or stating the
      opinion of each person signing such certificate as to the fair value
      (within 90 days prior to such release) of the property or securities
      proposed to be released and stating that in the opinion of such person the
      proposed release will not impair the security under this Indenture in
      contravention of the provisions hereof.

                  (iv) Whenever the Issuer is required to furnish to the
      Indenture Trustee an Officer's Certificate certifying or stating the
      opinion of any signer thereof as to the matters described in clause (iii)
      above, the Issuer shall also furnish to the Indenture Trustee an
      Independent Certificate as to the same matters if the fair value of the
      property or securities and of all other property or securities released
      from the lien of this Indenture since the commencement of the then-current
      calendar year, as set forth in the certificates required by clause (iii)
      above and this clause (iv), equals 10% or more of the Bond Principal
      Balances of the Bonds, but such certificate need not be furnished in the
      case of any release of property or securities if the fair value thereof as
      set forth in the related Officer's Certificate is less than $25,000 or
      less than one percent of the then Bond Principal Balances of the Bonds.

      Section 10.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.

      Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Seller or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

      Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

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      Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.

      Section 10.03 ACTS OF BONDHOLDERS. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Bondholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Bondholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Bondholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01
hereof) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03 hereof.

      (b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.

      (c) The ownership of Bonds shall be proved by the Bond Registrar.

      (d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Bonds shall bind the Holder of every Bond
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Bond.

      Section 10.04 NOTICES ETC., TO INDENTURE TRUSTEE ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or act of Bondholders is to be made upon, given or
furnished to or filed with:

                  (i) the Indenture Trustee by any Bondholder or by the Issuer
      shall be sufficient for every purpose hereunder if made, given, furnished
      or filed in writing to or with the Indenture Trustee at the Corporate
      Trust Office. The Indenture Trustee shall promptly transmit any notice
      received by it from the Bondholders to the Issuer; or

                  (ii) the Issuer by the Indenture Trustee or by any Bondholder
      shall be sufficient for every purpose hereunder if in writing and mailed
      first-class, postage prepaid

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      to the Issuer addressed to: Impac CMB Trust Series 2004-7, in care of
      Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
      Wilmington, Delaware 19990- 0001, Attention: Corporate Trust
      Administration, or at any other address previously furnished in writing to
      the Indenture Trustee by the Issuer. The Issuer shall promptly transmit
      any notice received by it from the Bondholders to the Indenture Trustee;
      or

                  (iii) the Bond Insurer by the Issuer, the Indenture Trustee or
      by any Bondholders shall be sufficient for every purpose hereunder if in
      writing and mailed, first-class postage pre-paid, or personally delivered
      or telecopied to: Ambac Assurance Corporation, One State Street Plaza, New
      York, New York 10004, Attention: Consumer Asset-Backed Securities Group,
      Telephone: (212) 208-3394, Telecopier: (212) 363-1459. The Bond Insurer
      shall promptly transmit any notice received by it from the Issuer, the
      Indenture Trustee or the Bondholders to the Issuer or Indenture Trustee,
      as the case may be.

      Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, mailed first-class
postage pre-paid, to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., Residential Mortgage Monitoring Department, 99
Church Street, New York, New York 10007 and (ii) in the case of Standard &
Poor's, at the following address: Standard & Poor's, 55 Water Street, 41st
Floor, New York, New York 10041, Attention of Asset Backed Surveillance
Department; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.

      Section 10.05 NOTICES TO BONDHOLDERS; WAIVER. Where this Indenture
provides for notice to Bondholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Bondholder affected by such
event, at such Person's address as it appears on the Bond Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Bondholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Bondholder shall affect the sufficiency of such notice with
respect to other Bondholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.

      Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Bondholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.

      In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Bondholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.

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      Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.

      Section 10.06 CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.

      The provisions of TIA ss.ss. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

      Section 10.07 EFFECT OF HEADINGS. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.

      Section 10.08 SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Indenture and the Bonds by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.

      Section 10.09 SEPARABILITY. In case any provision in this Indenture or in
the Bonds shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

      Section 10.10 [RESERVED].

      Section 10.11 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Bonds or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

      Section 10.12 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

      Section 10.13 COUNTERPARTS. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.

      Section 10.14 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
at its expense (which may be counsel to the Indenture Trustee or any other
counsel reasonably acceptable to the Indenture Trustee) to the effect that such

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recording is necessary either for the protection of the Bondholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.

      Section 10.15 ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Bonds or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

      Section 10.16 NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Bondholder, by accepting a Bond, hereby covenant and agree
that they will not at any time prior to one year from the date of termination
hereof, institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Bonds, this Indenture or any
of the Basic Documents.

      Section 10.17 INSPECTION. The Issuer agrees that, at its expense, on
reasonable prior notice, it shall permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.

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                                   ARTICLE XI

                   Certain Matters Regarding the Bond Insurer

      Section 11.01 RIGHTS OF THE BOND INSURER TO EXERCISE THE RIGHTS OF THE
CLASS 2-A BONDS. By accepting its Bond, each Class 2-A Bondholder agrees that
unless an Bond Insurer Default exists, the Bond Insurer shall have the right to
exercise all consent, voting, direction and other control rights of the Class
2-A Bondholders under this Indenture without any further consent of the Class
2-A Bondholders.

      Section 11.02 CLAIMS UPON THE BOND INSURANCE POLICY; INSURANCE ACCOUNT.
(a) If, on the Business Day next succeeding the Determination Date, the Master
Servicer determines that (i) the funds that will be on deposit in the Payment
Account on the third Business Day prior to the related Payment Date, to the
extent payable to the Class 2-A Bondholders pursuant to Section 3.05, are
insufficient to pay the Accrued Bond Interest on the Class 2-A Bonds for such
Payment Date, net of any Prepayment Interest Shortfalls, Relief Act Shortfalls
or Basis Risk Shortfalls allocated to the Class 2-A Bonds or (ii) the funds
available in connection with an optional redemption of the Bonds pursuant to
Section 8.07 or on the Final Scheduled Payment Date will be insufficient to
reduce the Bond Principal Balance of the Class 2-A Bonds to zero, the Master
Servicer shall deliver to the Indenture Trustee not later than 1:00 p.m. New
York City time on the Business Day next succeeding the Determination Date a
certificate signed by a Servicing Officer directing the Indenture Trustee to
draw on the Bond Insurance Policy and stating the amount to be drawn and stating
the Insured Amount for the Class 2-A Bonds, and the Indenture Trustee shall give
notice by telephone or telecopy of the aggregate amount of such deficiency,
confirmed in writing in the form set forth as Exhibit A to the endorsement of
the Bond Insurance Policy, to the Bond Insurer at or before 12:00 noon, New York
City time, on the Business Day prior to such Payment Date. If, subsequent to
such notice, and prior to payment by the Bond Insurer pursuant to such notice,
additional amounts are deposited in the Payment Account, the Indenture Trustee
shall reasonably promptly notify the Bond Insurer and withdraw the notice or
reduce the amount claimed, as appropriate.

      (b) The Indenture Trustee shall establish a separate special purpose trust
account for the benefit of Holders of the Class 2-A Bonds and the Bond Insurer
referred to herein as the "Insurance Account" over which the Indenture Trustee
shall have exclusive control and sole right of withdrawal. The Indenture Trustee
shall deposit any amount paid to it under the Bond Insurance Policy in the
Insurance Account and distribute such amount only for purposes of payment to
Holders of Class 2-A Bonds of the Insured Amount for which a claim was made.
Such amount may not be applied to satisfy any costs, expenses or liabilities of
the Master Servicer, the Indenture Trustee or the Trust Estate. Amounts paid
under the Bond Insurance Policy shall be transferred to the Payment Account in
accordance with the next succeeding paragraph and disbursed by the Indenture
Trustee to Holders of Class 2-A Bonds in accordance with Section 3.05 or Section
8.04, as applicable. It shall not be necessary for such payments to be made by
checks or wire transfers separate from the checks or wire transfers used to pay
the Insured Amount with other funds available to make such payment. However, the
amount of any payment of principal of or interest on the Class 2-A Bonds to be
paid from funds transferred from the Insurance Account shall be noted as
provided in paragraph (c) below and in the statement to be furnished to Holders
of the Bonds and Certificates pursuant to Section 3.25. Funds held in the
Insurance Account shall not be invested by the Master Servicer.

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      On any Payment Date with respect to which a claim has been made under the
Bond Insurance Policy, the amount of any funds received by the Indenture Trustee
as a result of any claim under the Bond Insurance Policy, to the extent required
to pay the Insured Amount on such Payment Date, shall be withdrawn by the
Indenture Trustee from the Insurance Account and deposited in the Payment
Account and applied by the Indenture Trustee, together with the other funds to
be distributed to the Class 2-A Bondholders pursuant to Section 3.05, directly
to the payment in full of the Insured Amount due on the Class 2-A Bonds. Any
funds remaining in the Insurance Account on the first Business Day following a
Payment Date shall be remitted by the Indenture Trustee to the Bond Insurer,
pursuant to the written instructions of the Bond Insurer, by the end of such
Business Day.

      (c) The Indenture Trustee shall keep a complete and accurate record of the
amount of interest and principal paid into the Insurance Account in respect of
any Class 2-A Bond from moneys received by the Indenture Trustee under the Bond
Insurance Policy. The Bond Insurer shall have the right to inspect such records
at reasonable times during normal business hours upon two Business Day's prior
written notice to the Indenture Trustee.

      Section 11.03 EFFECT OF PAYMENTS BY THE BOND INSURER; SUBROGATION.
Anything herein to the contrary notwithstanding, for purposes of this Section
11.03, any payment with respect to principal of or interest on the Class 2-A
Bonds which is made with monies received pursuant to the terms of the Bond
Insurance Policy shall not be considered payment of the Class 2-A Bonds from the
Trust Estate. The Master Servicer and the Indenture Trustee acknowledge, and
each Holder by its acceptance of a Class 2-A Bond agrees, that without the need
for any further action on the part of the Bond Insurer, the Master Servicer, the
Indenture Trustee or the Certificate Registrar, to the extent the Bond Insurer
makes payments, directly or indirectly, on account of principal of or interest
on the Class 2-A Bonds to the Holders of such Bonds, the Bond Insurer will be
fully subrogated to, and each Class 2-A Bondholder and the Indenture Trustee
hereby delegate and assign to the Bond Insurer, to the fullest extent permitted
by law, the rights of such Holders to receive such principal and interest from
the Trust Estate; provided that the Bond Insurer shall be paid such amounts only
from the sources and in the manner explicitly provided for herein.

      The Indenture Trustee and the Master Servicer shall cooperate in all
respects with any reasonable request by the Bond Insurer for action to preserve
or enforce the Bond Insurer's rights or interests under this Indenture without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.

      Section 11.04 NOTICES AND INFORMATION TO THE BOND INSURER. All notices,
statements, reports, certificates or opinions required by this Indenture to be
sent or made available to any other party hereto or to the Bondholders or
Certificateholders shall also be sent or made available to the Bond Insurer.

      Section 11.05 TRUSTEE TO HOLD BOND INSURANCE POLICY. The Indenture Trustee
will hold the Bond Insurance Policy in trust as agent for the Class 2-A
Bondholders for the purpose of making claims thereon and distributing the
proceeds thereof. Neither the Bond Insurance Policy, nor the

                                       79

<PAGE>

amounts paid on the Bond Insurance Policy will constitute part of the Trust
Estate. Each Class 2-A Bondholder, by accepting its Bond, appoints the Indenture
Trustee as attorney-in-fact for the purpose of making claims on the Bond
Insurance Policy. The Indenture Trustee shall surrender the Bond Insurance
Policy to the Bond Insurer for cancellation upon the expiration of the term of
the Bond Insurance Policy as provided in the Bond Insurance Policy following the
retirement of the Class 2-A Bonds.

                                       80

<PAGE>

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

                                                IMPAC CMB TRUST SERIES 2004-7,
                                                as Issuer
                                                Wilmington Trust Company, not in
                                                its individual capacity but
                                                solely as Owner Trustee

                                                By:    /s/ James P. Lawler
                                                       -------------------------
                                                Name:  James P. Lawler
                                                Title: Vice President

                                                DEUTSCHE BANK NATIONAL TRUST
                                                COMPANY, as Indenture Trustee

                                                By:    /s/ Alan Sueda
                                                       -------------------------
                                                Name:  Alan Sueda
                                                Title: Associate

                                                By:    /s/ Eiko Akiyama
                                                       -------------------------
                                                Name:  Eiko Akiyama
                                                Title: Associate

<PAGE>

STATE OF CALIFORNIA       )
                          ) ss.:
COUNTY OF ORANGE          )

      On this 27th day of July, 2004, before me personally appeared Alan Sueda
to me known, who being by me duly sworn, did depose and say, that he is an
Associate of the Indenture Trustee, one of the corporations described in and
which executed the above instrument; and that she signed her name thereto by
like order.

                                           Notary Public

                                           /s/ Nicholas Charles Gisler
                                           -------------------------------------
                                           NOTARY PUBLIC

[NOTARIAL SEAL]

STATE OF CALIFORNIA       )
                          ) ss.:
COUNTY OF ORANGE          )

      On this 27th day of July, 2004, before me personally appeared Eiko Akiyama
to me known, who being by me duly sworn, did depose and say, that she is an
Associate of the Indenture Trustee, one of the corporations described in and
which executed the above instrument; and that she signed her name thereto by
like order.

                                           Notary Public

                                           /s/ Nicholas Charles Gisler
                                           -------------------------------------
                                           NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

STATE OF DELAWARE          )
                           ) ss.:
COUNTY OF NEW CASTLE       )

      On this 29th day of July, 2004, before me personally appeared James P.
Lawler to me known, who being by me duly sworn, did depose and say, that he is a
Vice President of the Owner Trustee, one of the entities described in and which
executed the above instrument; and that she signed her name thereto by like
order.

                                           Notary Public

                                           /s/ Heather L. Maier
                                           -------------------------------------
                                           NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

                                   EXHIBIT A-1

                           FORM OF CLASS [_-A-_] BONDS

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AND THE BOND INSURANCE POLICY AS
PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE
PERSONALLY LIABLE FOR PAYMENTS ON THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                      A-1-1

<PAGE>

                          IMPAC CMB TRUST SERIES 2004-7
                        COLLATERALIZED ASSET-BACKED BONDS
                                  CLASS [_-A-_]

AGGREGATE BOND PRINCIPAL                              BOND INTEREST
BALANCE:                                              RATE: Adjustable Rate
$[      ]

INITIAL BOND PRINCIPAL                                BOND NO. 1
BALANCE OF THIS BOND: $[      ]

PERCENTAGE INTEREST: 100%                             CUSIP NO. [      ]

      Impac CMB Trust Series 2004-7 (the "Issuer"), a Delaware statutory trust,
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of ($_________________) in monthly installments on the
twenty-fifth day of each month or, if such day is not a Business Day, the next
succeeding Business Day (each a "Payment Date"), commencing in August 2004 and
ending on or before the Payment Date occurring in _____________ (the "Final
Scheduled Payment Date") and to pay interest on the Bond Principal Balance of
this Bond (this "Bond") outstanding from time to time as provided below.

      This Bond is one of a duly authorized issue of the Issuer's Collateralized
Asset-Backed Bonds, Series 2004-7 (the "Bonds"), issued under an Indenture dated
as of July 29, 2004 (the "Indenture"), between the Issuer and Deutsche Bank
National Trust Company, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

      [Ambac Assurance Corporation (the "Bond Insurer"), in consideration of the
payment of the premium and subject to the terms of the certificate guaranty
insurance policy (the "Bond Insurance Policy") issued thereby, has
unconditionally and irrevocably guaranteed the payment of the Insured Amount
with respect to the Class 2-A Bonds with respect to each Payment Date. Such Bond
Insurance Policy will not cover any Prepayment Interest Shortfalls, Relief Act
Shortfalls or Basis Risk Shortfall Carry- Forward Amount.]

      Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal [and
the aggregate amount of cumulative Realized Losses allocated to such Bond] on
all prior Payment Dates.

                                      A-1-2

<PAGE>

      The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
[_-A-_] Bonds as described above, and shall be applied as between interest and
principal as provided in the Indenture.

      All principal and interest accrued on the Bonds, if not previously paid,
will become finally due and payable at the Final Scheduled Payment Date.

      The Bonds are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on or after the earlier of (i)
the Payment Date on which the aggregate Stated Principal Balance of the Mortgage
Loans as of the end of the prior Due Period is less than or equal to 20% of the
aggregate Stated Principal Balance of the Mortgage Loans as of Cut- off Date and
the aggregate amount deposited into the Group 1 Pre-Funding Account and Group 2
Pre-Funding Account on the Closing Date and (ii) the Payment Date in August
2014.

      The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class [_-A- _] Bonds,
and each Holder hereof, by its acceptance of this Bond, agrees that (i) such
Bond will be limited in right of payment to amounts available from the Trust
Estate as provided in the Indenture and (ii) such Holder shall have no recourse
to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class [_-A-_] Bonds pursuant to the
Indenture and the rights conveyed to the Issuer under the Indenture.

      Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All scheduled reductions in the principal amount of a
Bond (or one or more predecessor Bonds) effected by payments of principal made
on any Payment Date shall be binding upon all Holders of this Bond and of any
bond issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

                                      A-1-3

<PAGE>

      Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

      If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the Holder of this
Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds,
together with accrued and unpaid interest thereon as described in the Indenture.
The Indenture provides that, notwithstanding the acceleration of the maturity of
the Bonds, under certain circumstances specified therein, all amounts collected
as proceeds of the Trust Estate securing the Bonds or otherwise shall continue
to be applied to payments of principal of and interest on the Bonds as if they
had not been declared due and payable.

      The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

      The Holder of this Bond or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Bond with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give
rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code and (B) the Bonds are rated investment grade or better and such
person agrees to treat them as indebtedness for federal income tax purposes.
Alternatively, regardless of the rating of such Bonds, such person may provide
the Indenture Trustee and the Owner Trustee with an opinion of counsel, which
opinion of counsel will not be at the expense of the Issuer, the Seller, any
Underwriter, the Owner Trustee, the Indenture Trustee, the Depositor, the Master
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of such Bond or interest therein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Depositor, the Master Servicer or any successor servicer to any obligation in
addition to those undertaken in the Indenture.

      [Pursuant to the Indenture, unless a Bond Insurer Default (as defined in
the Indenture) exists (i) the Bond Insurer shall be deemed to be the holder of
the Class 2-A Bonds for certain purposes specified in the Indenture (other than
with respect to payment on the Class 2-A Bonds), and will be entitled to
exercise all rights of the Bondholders thereunder, including the rights of
Bondholders relating to the occurrence of, and the remedies with respect to, an
Event of Default, without the consent of such Bondholders, and (ii) the Trustee
may take actions which would otherwise be at its option or within its
discretion, including actions relating to the occurrence of, and the remedies
with respect to, an Event of Default, only at the direction, or with the
consent, of the Bond Insurer.]

      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency

                                      A-1-4

<PAGE>

designated by the Issuer pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Indenture Trustee, one or
more new Bonds of any authorized denominations and of a like aggregate initial
Bond Principal Balance, will be issued to the designated transferee or
transferees.

      Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or waive certain terms and conditions
set forth in the Indenture without the consent of the Holders of the Bonds
issued thereunder.

      Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

      Unless the Certificate of Authentication hereon has been executed by the
Indenture Trustee by manual signature, this Bond shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.

      AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                      A-1-5

<PAGE>

      IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: July 29, 2004

                                         IMPAC CMB TRUST SERIES 2004-7

                                         BY:  WILMINGTON TRUST COMPANY, not in
                                         its individual capacity but solely in
                                         its capacity as Owner Trustee

                                         By:____________________________________
                                         Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

By:______________________________________
   Authorized Signatory

                                      A-1-6

<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
the Bond, shall be construed as though they were written out in full according
to applicable laws or regulations:

     TEN COM                        --      as tenants in common

     TEN ENT                        --      as tenants by the entireties

     JT TEN                         --      as joint tenants with right of
                                            survivorship and not as tenants in
                                            common

UNIF GIFT MIN ACT                   --      __________ Custodian

                                            ______________________________
                                               (Cust)            (Minor)

                                                under Uniform Gifts to Minor Act

                                                _____________________
                                                                         (State)

     Additional abbreviations may also be used though not in the above list.

                                      A-1-7

<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
      unto

          PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
                                    ASSIGNEE:

          ___________________________________________________________

          ___________________________________________________________

          ___________________________________________________________
  (Please print or typewrite name and address, including zip code, of assignee)

________________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________ attorney to transfer said Bond on the books kept
for registration thereof, with full power of substitution in the premises.

Dated:_____________________      ________________________________________

Signature Guaranteed by ___________________________________________

      NOTICE: The signature(s) to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                      A-1-8

<PAGE>

                                   EXHIBIT A-2

                          FORM OF CLASS M-[_]-[_] BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [_-A-_] BONDS [AND
CLASS M-[_]-[_] BONDS] AS DESCRIBED IN THE INDENTURE.

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                      A-2-1

<PAGE>

                          IMPAC CMB TRUST SERIES 2004-7
                        COLLATERALIZED ASSET-BACKED BONDS
                                 CLASS M-[_]-[_]

AGGREGATE BOND PRINCIPAL                                  BOND INTEREST
BALANCE:                                                  RATE: [       %]
$[      ]

INITIAL BOND PRINCIPAL                                    BOND NO. 1
BALANCE OF THIS BOND: $[      ]

PERCENTAGE INTEREST: 100%                                 CUSIP NO. [      ]

      Impac CMB Trust Series 2004-7 (the "Issuer"), a Delaware statutory trust,
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of ______________________________ ($___________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in August 2004 and ending on or before the Payment Date occurring in
_____________ (the "Final Scheduled Payment Date") and to pay interest on the
Bond Principal Balance of this Bond (this "Bond") outstanding from time to time
as provided below.

      This Bond is one of a duly authorized issue of the Issuer's Collateralized
Asset-Backed Bonds, Series 2004-7 (the "Bonds"), issued under an Indenture dated
as of July 29, 2004 (the "Indenture"), between the Issuer and Deutsche Bank
National Trust Company, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

      Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

      The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
M-[_]-[_] Bonds as described above, and shall be applied as between interest and
principal as provided in the Indenture.

      All principal and interest accrued on the Bonds, if not previously paid,
will become finally due and payable at the Final Scheduled Payment Date.

                                      A-2-2

<PAGE>

      The Bonds are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on or after the earlier of (i)
the Payment Date on which the aggregate Stated Principal Balance of the Mortgage
Loans is less than or equal to 20% of aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date and the aggregate amount deposited into the
Group 1 Pre-Funding Account and Group 2 Pre-Funding Account on the Closing Date
and (ii) the Payment Date in August 2014.

      The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class M- [_]-[_] Bonds,
and each Holder hereof, by its acceptance of this Bond, agrees that (i) such
Bond will be limited in right of payment to amounts available from the Trust
Estate as provided in the Indenture and (ii) such Holder shall have no recourse
to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class M-[_]-[_] Bonds pursuant to the
Indenture and the rights conveyed to the Issuer under the Indenture.

      Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

      Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

      If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the Holder of this
Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds,
together with accrued and unpaid interest thereon as described in the Indenture.
The Indenture provides that, notwithstanding the acceleration of the maturity of
the Bonds, under certain circumstances specified

                                      A-2-3

<PAGE>

therein, all amounts collected as proceeds of the Trust Estate securing the
Bonds or otherwise shall continue to be applied to payments of principal of and
interest on the Bonds as if they had not been declared due and payable.

      The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

      Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or waive certain terms and conditions
set forth in the Indenture without the consent of the Holders of the Bonds
issued thereunder.

      Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

      Unless the Certificate of Authentication hereon has been executed by the
Indenture Trustee by manual signature, this Bond shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.

                                      A-2-4

<PAGE>

      AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                      A-2-5

<PAGE>

      IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: July 29, 2004

                                     IMPAC CMB TRUST SERIES 2004-7

                                     BY:  WILMINGTON TRUST COMPANY, not in
                                          its individual capacity but solely in
                                          its capacity as Owner Trustee

                                     By:
                                          --------------------------------------
                                          Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

By:   ___________________________________
      Authorized Signatory

                                      A-2-6

<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of the Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:

         TEN COM             --      as tenants in common

         TEN ENT             --      as tenants by the entireties

         JT TEN              --      as joint tenants with right of survivorship
                                     and not as tenants in common

UNIF GIFT MIN ACT            --      __________ Custodian

                                     ______________________________
                                       (Cust)            (Minor)

                                                under Uniform Gifts to Minor Act

                                                _____________________
                                                                         (State)

     Additional abbreviations may also be used though not in the above list.

                                      A-2-7

<PAGE>

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

          PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
                                    ASSIGNEE:

                 ______________________________________________

                 ______________________________________________

                 ______________________________________________
  (Please print or typewrite name and address, including zip code, of assignee)

________________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________ attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated: ___________________              ___________________________________

Signature Guaranteed by ___________________________________________________

      NOTICE: The signature(s) to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                      A-2-8

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                                (Filed Manually)

(In accordance with Rule 202 of Regulation S-T, this Mortgage Loan Schedule, is
being filed in paper pursuant to a continuing hardship exemption.)

                                       B-1

<PAGE>

                                    EXHIBIT C

                          FORM OF INITIAL CERTIFICATION

                                           __________________________, 200_

[Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2004-7

         Re: Indenture dated as of July 29, 2004, between Impac CMB Trust Series
             2004-7 AND DEUTSCHE BANK NATIONAL TRUST COMPANY
             -------------------------------------------------------------------

Ladies and Gentlemen:

            In accordance with Section 2.03(a) of the above-captioned Indenture,
and Section 2.1(b)(i)-(v) of the Mortgage Loan Purchase Agreement, dated as of
July 29, 2004 between Impac Mortgage Holdings, Inc. and Impac Funding
Corporation (the "MLPA"; and together with the Indenture, the "Agreements"), the
undersigned, as Indenture 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 exception report attached 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 (iii) and (v) of the
definition or description of "Mortgage Loan Schedule" is correct.

            The Indenture Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Agreements. The Indenture Trustee makes no
representation that any documents specified in clause (v) of Section 2.1 (b) of
the MLPA should be included in any Mortgage File. The Indenture 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 Indenture Trustee.

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

                                       C-1

<PAGE>

                                                  DEUTSCHE BANK NATIONAL
                                                  TRUST COMPANY,
                                                  as Indenture Trustee

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

                                       C-2

<PAGE>

                                    EXHIBIT D

                           FORM OF FINAL CERTIFICATION

                                              __________________________ , 200__

[Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2004-7

       Re:  Indenture, dated as of July 29, 2004, between Impac CMB Trust Series
            2004-7 AND DEUTSCHE BANK NATIONAL TRUST COMPANY
            --------------------------------------------------------------------

Ladies and Gentlemen:

            In accordance with Section 2.03(b) of the above-captioned Indenture,
and Section 2.1(b) of the Mortgage Loan Purchase Agreement, dated as of July 29,
2004, between Impac Mortgage Holdings, Inc. (formerly known as Imperial Credit
Mortgage Holdings, Inc.) and Impac Funding Corporation (formerly known as ICI
Funding Corporation) (the "MLPA"; and together with the Indenture, the
"Agreements"), the undersigned, as Indenture 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 exception report attached hereto) it
has received the documents set forth in Section 2.1(b) of the MLPA.

            The Indenture Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Agreements. The Indenture Trustee makes no representation that
any documents specified in clause (v) of Section 2.1 (b) should be included in
any Mortgage File. The Indenture 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 Indenture Trustee.

                                       D-1

<PAGE>

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

                                                DEUTSCHE BANK NATIONAL
                                                TRUST COMPANY,
                                                as Indenture Trustee

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

                                       D-2

<PAGE>

                                    EXHIBIT E

                              DERIVATIVE CONTRACTS

                             (Provided Upon Request)

                                       E-1

<PAGE>

                                    EXHIBIT F

                        SPECIAL CERTIFICATE CAP CONTRACT

                                       F-1

<PAGE>

                                    EXHIBIT G

                FORM OF GROUP [_] SUBSEQUENT TRANSFER INSTRUMENT

      Pursuant to this Group [_] Subsequent Transfer Instrument, dated
[_______________] (the "Instrument"), between IMH Assets Corp. as Seller (the
"Company"), and Deutsche Bank National Trust Company as indenture trustee of the
IMH Assets Corp., Collateralized Asset-Backed Bonds, Series 2004-7, as purchaser
(the "Indenture Trustee"), on behalf of Impac CMB Trust Series 2004-7 (the
"Issuer"), as purchaser, and pursuant to the Indenture, dated as of July 29,
2004 (the "Indenture"), between the Issuer and the Indenture Trustee, as
indenture trustee, the Company and the Indenture Trustee agree to the sale by
the Company and the purchase by the Indenture Trustee in trust, on behalf of the
Trust, of the Group [_] Subsequent Mortgage Loans on the attached Schedule 1 of
Mortgage Loans (the "Group [_] Subsequent Mortgage Loans").

      Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Indenture.

            Section 1. CONVEYANCE OF GROUP [_] SUBSEQUENT MORTGAGE LOANS;
ACCEPTANCE OF MORTGAGE LOANS BY THE INDENTURE TRUSTEE.

            (a) The Company does hereby sell, transfer, assign, set over and
convey to the Indenture Trustee in trust, on behalf of the Trust, without
recourse, all of its right, title and interest in and to the Group [_]
Subsequent Mortgage Loans, including all amounts due on the Group [_] Subsequent
Mortgage Loans after the related Subsequent Cut-off Date, and all items with
respect to the Group [_] Subsequent Mortgage Loans to be delivered pursuant to
Section 2.05 of the Indenture; provided, however that the Company reserves and
retains all right, title and interest in and to amounts due on the Group [_]
Subsequent Mortgage Loans on or prior to the related Subsequent Cut-off Date.
The Company, contemporaneously with the delivery of this Agreement, has
delivered or caused to be delivered to the Indenture Trustee each item set forth
in, and as provided, in Section 2.05 of the Indenture. The transfer to the
Indenture Trustee by the Company of the Group [_] Subsequent Mortgage Loans
identified on the Mortgage Loan Schedule shall be absolute and is intended by
the Company, the Master Servicer, the Indenture Trustee, the Bondholders to
constitute and to be treated as a sale by the Company to the Trust Fund.

            (b) The Company, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Indenture Trustee without recourse for the benefit of the Bondholders all the
right, title and interest of the Company, in, to and under the Group [_]
Subsequent Mortgage Loan Purchase Agreement, dated [_______________], between
the Company, as purchaser, and Impac Mortgage Holdings, Inc., as seller (the
"Purchase Agreement").

            (c) The Indenture Trustee acknowledges receipt of, subject to the
exceptions it notes pursuant to the procedures described in Section 2.03 of the
Indenture, the documents (or certified copies thereof) referred to in Section
2.1(b) of the Group [_] Subsequent Mortgage Loan

                                       G-1

<PAGE>

Purchase Agreement, and declares that it holds and will continue to hold those
documents and any amendments, replacements or supplements thereto and all other
assets of the Trust Estate as Indenture Trustee in trust for the use and benefit
of all present and future Holders of the Bonds.

            (d) Additional terms of the sale are set forth on Attachment A
hereto.

            Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT.

            (a) The Company hereby confirms that each of the conditions and the
representations and warranties set forth in Section 2.05 of the Indenture are
satisfied as of the date hereof.

            (b) All terms and conditions of the Indenture are hereby ratified
and confirmed; provided, however, that in the event of any conflict, the
provisions of this Instrument shall control over the conflicting provisions of
the Indenture.

            Section 3. RECORDATION OF INSTRUMENT.

            To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, 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 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 the Bondholders' expense on direction of the related Bondholders,
but only when accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the Bondholders
or is necessary for the administration or servicing of the Group [_] Subsequent
Mortgage Loans.

            Section 4. GOVERNING LAW.

            This Instrument shall be construed in accordance with the laws of
the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.

            Section 5. COUNTERPARTS.

            This Instrument may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.

            Section 6. SUCCESSORS AND ASSIGNS.

            This Instrument shall inure to the benefit of and be binding upon
the Company and the Indenture Trustee and their respective successors and
assigns.

                                       G-2

<PAGE>

IMH ASSETS CORP.

By:___________________
Name:
Title:

DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity
but solely as Indenture Trustee for the Trust.

By: _______________________
Name:
Title:

                                       G-3

<PAGE>

                                   APPENDIX A
                                   DEFINITIONS

      ACCRUAL PERIOD: With respect to any Payment Date and each Class of Bonds,
the period from the preceding Payment Date (or in the case of the first Payment
Date, from the Closing Date) through the day preceding such Payment Date.

      ACCRUED BOND INTEREST: With respect to any Payment Date and each Class of
Bonds, interest accrued during the related Accrual Period at the then-applicable
Bond Interest Rate on the related Bond Principal Balance thereof immediately
prior to such Payment Date, less such Bonds' Unpaid Interest Shortfall for such
Payment Date, plus any Accrued Bond Interest remaining unpaid from any prior
Payment Date with interest thereon at the related Bond Interest Rate. Accrued
Bond Interest for the Bonds shall be calculated on the basis of the actual
number of days in the Accrual Period and a 360-day year.

      ADDITIONAL DERIVATIVE CONTRACT COUNTERPARTY PAYMENT: With respect to any
Payment Date, any termination payment payable to the Derivative Contract
Counterparty in connection with (i) an Event of Default under a Derivative
Contract with respect to which the Derivative Contract Counterparty is a
Defaulting Party or (ii) a termination event under a Derivative Contract with
respect to which the Derivative Contact Counterparty is the sole affected party.

      ADJUSTMENT DATE: As to each Group 1 Loan, each date set forth in the
related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.

      ADVANCE: As to any Mortgage Loan, any advance made by the Master Servicer
pursuant to Section 4.04 of the Servicing Agreement or by a Subservicer in
respect of delinquent Monthly Payments of principal and interest pursuant to the
related Subservicing Agreement.

      AFFILIATE: With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.

      ALLOCATED REALIZED LOSS AMOUNT: With respect to the Underlying Class M
Bonds and Class 1-A-2 Bonds and any Payment Date, an amount equal to the sum of
any Realized Loss allocated to such Bonds on that Payment Date and any Allocated
Realized Loss Amount for that Class remaining unpaid from the previous Payment
Date, less the amount of any Subsequent Recoveries added to Bond Principal
Balance of such Bond. With respect to each Grantor Trust Certificate, the
Allocated Realized Loss Amount for its corresponding Underlying Class M Bonds.

      APPRAISED VALUE: The appraised value of a Mortgaged Property based upon
the lesser of (i) the appraisal made at the time of the origination of the
related Mortgage Loan, or (ii) the sale price of such Mortgaged Property at such
time of origination. With respect to a Mortgage Loan, the proceeds of which were
used to refinance an existing Mortgage Loan, the appraised value of the
Mortgaged Property based upon the appraisal obtained at the time of refinancing.

<PAGE>

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

      AUTHORIZED NEWSPAPER: A newspaper of general circulation in the Borough of
Manhattan, The City of New York, printed in the English language and customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays.

      AUTHORIZED OFFICER: With respect to the Issuer, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters relating to
the Issuer and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).

      AVAILABLE FUNDS: The Group 1 Available Funds or Group 2 Available Funds,
as applicable.

      AVAILABLE FUNDS RATE: On any Payment Date during the Funding Period and
for the Class 1-A-1 Bonds, Class 1-A-2 Bonds and the Underlying Class M-1-1,
Class M-2-1, Class M-3-1, Class M-4-1 and Class M-5-1 Bonds, the per annum rate
equal to the product of:

      (i) the product of:

                  (1) the weighted average of

                        (x)   the Group 1 Adjusted Net WAC Rate and

                        (y)   the amount of interest earned on amounts on
                              deposit in the Group 1 Pre-Funding Account from
                              the prior Payment Date to the current Payment
                              Date, expressed as a percentage of the Group 1
                              Pre-Funded Amount at the end of the prior Due
                              Period and converted to a per annum rate,

                        in the case of (x), weighted on the basis of the
                        aggregate Stated Principal Balance of the Group 1
                        Mortgage Loans as of the end of the prior Due Period,
                        and in the case of (y), weighted on the basis of the
                        Group 1 Pre-Funded Amount as of the end of the related
                        Due Period, and

                  (2) a fraction equal to

                        (x) the sum of the aggregate Stated Principal Balance of
                  the Group 1 Loans and the Group 1 Pre-Funded Amount as of the
                  end of the prior Due Period (plus, on any Subordinated
                  Transfer Payment Date where the Group

                                      2

<PAGE>

                  1 Loans are the Undercollateralized Loan Group, the
                  Subordinated Transfer Realized Loss Amount) divided by

                        (y) the aggregate Bond Principal Balance of the Class
                  1-A-1 Bonds, Class 1-A-2 Bonds and the Underlying Class M-1-1,
                  Class M-2-1, Class M- 3-1, Class M-4-1 and Class M-5-1 Bonds
                  immediately prior to such Payment Date, and

      (ii)  a fraction equal to (x) 30 divided by (y) the number of days in the
            related Accrual Period.

On any Payment Date following the Funding Period, the per annum rate equal to
the product of:

      (i) the product of:

                  (1) Group 1 Adjusted Net WAC Rate and

                  (2) a fraction equal to

                        (x) the aggregate Stated Principal Balance of the Group
                  1 Loans as of the end of the prior Due Period (plus, on any
                  Subordinated Transfer Payment Date where the Group 1 Loans are
                  the Undercollateralized Loan Group, the Subordinated Transfer
                  Realized Loss Amount) divided by

                        (y) the aggregate Bond Principal Balance of the Class
                  1-A-1 Bonds, Class 1-A-2 Bonds and the Underlying Class M-1-1,
                  Class M-2-1, Class M- 3-1, Class M-4-1 and Class M-5-1 Bonds
                  immediately prior to such Payment Date, and

      (ii)  a fraction equal to (x) 30 divided by (y) the number of days in the
            related Accrual Period.

      On any Payment Date during the Funding Period and for the Class 2-A Bonds
and the Underlying Class M-1-2, Class M-2-2, Class M-3-2, Class M-4-2 and Class
M-5-2 Bonds, the per annum rate equal to the product of:

      (i) the product of:

                  (1) (A) the weighted average of

                              (x)   the Group 2 Adjusted Net WAC Rate and

                              (y)   the amount of interest earned on amounts on
                                    deposit in the Group 2 Pre-Funding Account
                                    from the prior Payment Date to the current
                                    Payment Date, expressed as a percentage of
                                    the Group 2 Pre-Funded Amount at

                                      3

<PAGE>

                                    the end of the prior Due Period and
                                    converted to a per annum rate,

                        in the case of (x), weighted on the basis of the
                        aggregate Stated Principal Balance of the Group 2
                        Mortgage Loans as of the end of the prior Due Period,
                        and in the case of (y), weighted on the basis of the
                        Group 2 Pre-Funded Amount as of the end of the related
                        Due Period, minus

                        (B)   the Policy Premium Rate in respect of the Class
                              2-A Bonds times a fraction equal to

                              (x)   the aggregate Bond Principal Balance of the
                                    Class 2-A Bonds immediately prior to such
                                    Payment Date divided by

                              (y)   the aggregate Bond Principal Balance of the
                                    Class 2-A Bonds and the Underlying Class
                                    M-1-2, Class M-2-2, Class M-3-2, Class M-4-2
                                    and Class M-5-2 Bonds immediately prior to
                                    such Payment Date, and

                  (2) a fraction equal to

                        (x) the sum of the aggregate Stated Principal Balance of
                  the Group 2 Loans and the Group 2 Pre-Funded Amount as of the
                  end of the prior Due Period (plus, on any Subordinated
                  Transfer Payment Date where the Group 2 Loans are the
                  Undercollateralized Loan Group, the Subordinated Transfer
                  Realized Loss Amount) divided by

                        (y) the aggregate Bond Principal Balance of the Class
                  2-A Bonds and the Underlying Class M-1-2, Class M-2-2, Class
                  M-3-2, Class M-4-2 and Class M-5-2 Bonds immediately prior to
                  such Payment Date, and

      (ii)  a fraction equal to (x) 30 divided by (y) the number of days in the
            related Accrual Period.

On any Payment Date following the Funding Period, the per annum rate equal to
the product of:

      (i) (A) the product of:

                        (1) Group 2 Adjusted Net WAC Rate and

                        (2) a fraction equal to

                                      4

<PAGE>

                              (x) the aggregate Stated Principal Balance of the
                              Group 2 Loans as of the end of the prior Due
                              Period (plus, on any Subordinated Transfer Payment
                              Date where the Group 2 Loans are the
                              Undercollateralized Loan Group, the Subordinated
                              Transfer Realized Loss Amount) divided by

                              (y) the aggregate Bond Principal Balance of the
                              Class 2-A Bonds and the Underlying Class M-1-2,
                              Class M-2-2, Class M-3-2, Class M-4-2 and Class
                              M-5-2 Bonds immediately prior to such Payment
                              Date, minus

                  (B)   the Policy Premium Rate in respect of the Class 2-A
                        Bonds times a fraction equal to

                              (x)   the aggregate Bond Principal Balance of the
                                    Class 2-A Bonds immediately prior to such
                                    Payment Date divided by

                              (y)   the aggregate Bond Principal Balance of the
                                    Class 2-A Bonds and the Underlying Class
                                    M-1-2, Class M-2-2, Class M-3-2, Class M-4-2
                                    and Class M-5-2 Bonds immediately prior to
                                    such Payment Date, and

      (ii)  a fraction equal to (x) 30 divided by (y) the number of days in the
            related Accrual Period.

      BANKRUPTCY CODE: The Bankruptcy Code of 1978, as amended.

      BASIC DOCUMENTS: The Trust Agreement, the Certificate of Trust, the
Indenture, the Servicing Agreement, the Mortgage Loan Purchase Agreement, the
Derivative Contracts, the Seller Guarantee, the Special Certificate Cap Contract
and the other documents and certificates delivered in connection with any of the
above.

      BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Payment Date and
each Loan Group, the lesser of (a) the excess of (i) the related Available Funds
and, with respect to the Group 2 Loans, the Class 2-A Insured Amount, if any,
for such Payment Date over (ii) the aggregate amount of Accrued Bond Interest
for the related Bonds for such Payment Date and (b) the excess of (i) the
related Principal Remittance Amount for such Payment Date over (ii) the related
Overcollateralization Release Amount, if any, for such Payment Date.

      BASIS RISK SHORTFALL: With respect to any Class of Bonds, on each Payment
Date where clause (iii) of the definition of "Bond Interest Rate" is less than
clauses (a)(i) or (ii) of the definition of "Bond Interest Rate", the excess, if
any, of (x) the aggregate Accrued Bond Interest thereon for such Payment Date
calculated pursuant to the lesser of clause (a)(i) or (ii) of the definition of
Bond Interest Rate over (y) interest accrued on the related Mortgage Loans at
the related Available Funds Rate.

                                      5

<PAGE>

      BASIS RISK SHORTFALL CARRY-FORWARD AMOUNT: With respect to each Class of
Bonds and any Payment Date, as determined separately for each such Class of
Bonds, an amount equal to the aggregate amount of Basis Risk Shortfall for such
Bonds on such Payment Date, plus any unpaid Basis Risk Shortfall for such Class
of Bonds from prior Payment Dates, plus interest thereon at the Bond Interest
Rate for such Payment Date, to the extent previously unreimbursed by related Net
Monthly Excess Cashflow or the Derivative Contracts.

      BENEFICIAL OWNER: With respect to any Bond, the Person who is the
beneficial owner of such Bond as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).

      BOND: A Group 1 Bond or Group 2 Bond.

      BOND INSURANCE POLICY: The bond guaranty insurance policy issued by the
Bond Insurer for the benefit of the Class 2-A Bondholders.

      BOND INSURANCE PREMIUM: The premium payable to the Bond Insurer with
respect to the Bond Insurance Policy, as specified in the Bond Insurance Policy.

      BOND INSURER: Ambac Assurance Corporation, a Wisconsin-domiciled stock
insurance corporation, any successor thereto.

      BOND INSURER DEFAULT: The existence and continuance of any of the
following: (a) a failure by the Bond Insurer to make a payment required under
the Bond Insurance Policy in accordance with its terms; or (b)(i) the Bond
Insurer (A) files any petition or commences any case or proceeding under any
provision or chapter of the Bankruptcy Code or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (B) makes a general assignment for the benefit of its creditors,
or (C) has an order for relief entered against it under the Bankruptcy Code or
any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and nonappealable;
or (ii) a court of competent jurisdiction, the New York or Wisconsin Department
of Insurance or other competent regulatory authority enters a final and
nonappealable order, judgment or decree (A) appointing a custodian, trustee,
agent or receiver for the Bond Insurer or for all or any material portion of its
property or (B) authorizing the taking of possession by a custodian, trustee,
agent or receiver of the Bond Insurer (or the taking of possession of all or any
material portion of the property of the Bond Insurer).

      BOND INTEREST RATE: With respect to each Payment Date and each Class of
Bonds a floating rate equal to the least of (i) One-Month LIBOR plus the related
Bond Margin, (ii) the Maximum Bond Rate and (iii) the related Available Funds
Rate with respect to such Payment Date.

      BOND MARGIN: With respect to the Class 1-A-1 Bonds, on any Payment Date
prior to the related Step-Up Date, 0.370% per annum, and on any Payment Date on
and after the related Step-Up Date, 0.740% per annum. With respect to the Class
1-A-2 Bonds, on any Payment Date prior to the related Step-Up Date, 0.460% per
annum, and on any Payment Date on and after the related Step-Up

                                      6

<PAGE>

Date, 0.920% per annum. With respect to the Class 2-A Bonds, on any Payment Date
prior to the related Step-Up Date, 0.320% per annum, and on any Payment Date on
and after the related Step-Up Date, 0.640% per annum. With respect to the Class
M-1-1 Bonds and Class M-1-2 Bonds, on any Payment Date prior to the related
Step-Up Date, 0.570% per annum, and on any Payment Date on and after the related
Step-Up Date, 0.855% per annum. With respect to the Class M-2-1 Bonds and Class
M-2-2 Bonds, on any Payment Date prior to the related Step-Up Date, 0.630% per
annum, and on any Payment Date on and after the related Step-Up Date, 0.945% per
annum. With respect to the Class M-3-1 Bonds and Class M-3-2 Bonds, on any
Payment Date prior to the related Step-Up Date, 0.670% per annum, and on any
Payment Date on and after the related Step-Up Date, 1.005% per annum. With
respect to the Class M-4-1 Bonds and Class M-4-2 Bonds, on any Payment Date
prior to the related Step-Up Date, 1.200% per annum, and on any Payment Date on
and after the related Step-Up Date, 1.800% per annum. With respect to the Class
M-5-1 Bonds and Class M-5-2 Bonds, on any Payment Date prior to the related
Step-Up Date, 1.400% per annum, and on any Payment Date on and after the related
Step-Up Date, 2.100% per annum.

      BOND OWNER: The Beneficial Owner of a Bond.

      BOND PRINCIPAL BALANCE: With respect to any Bond as of any date of
determination, the initial Bond Principal Balance as stated on the face thereof,
minus all amounts distributed in respect of principal with respect to such Bond
and, in the case of any Class M Bond or Class 1-A-2 Bond, the aggregate amount
of any reductions in the Bond Principal Balance thereof deemed to have occurred
in connection with allocations of Realized Losses on all prior Payment Dates;
provided that, the Bond Principal Balance of any Class of Bonds, other than the
Class 1-A-1 Bonds and Class 2-A Bonds, with the highest payment priority to
which Realized Losses have been allocated shall be increased by the amount of
any Subsequent Recoveries on the related Mortgage Loans not previously
allocated, but not by more than the amount of Realized Losses previously
allocated to reduce the Bond Principal Balance of that Class.

      BOND REGISTER: The register maintained by the Bond Registrar in which the
Bond Registrar shall provide for the registration of Bonds and of transfers and
exchanges of Bonds.

      BOND REGISTRAR: The Indenture Trustee, in its capacity as Bond Registrar,
or any successor to the Indenture Trustee in such capacity.

      BONDHOLDER OR HOLDER: The Person in whose name a Bond is registered in the
Bond Register, except that, any Bond registered in the name of the Depositor,
the Issuer, the Indenture Trustee, the Seller or the Master Servicer or any
Affiliate of any of them shall be deemed not to be a holder or holders, nor
shall any so owned be considered outstanding, for purposes of giving any
request, demand, authorization, direction, notice, consent or waiver under the
Indenture or the Trust Agreement; provided that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Bonds that a
Responsible Officer of the Indenture Trustee or the Owner Trustee actually knows
to be so owned shall be so disregarded. Owners of Bonds that have been pledged
in good faith may be regarded as Holders if the pledgee establishes to the
satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's right
so to act with respect to such Bonds and that the pledgee is not the Issuer, any
other obligor upon the Bonds or any Affiliate of any of the foregoing Persons.
Any bonds on which

                                      7

<PAGE>

payments are made under the Bond Insurance Policy shall be deemed Outstanding
until the Bond Insurer has been reimbursed with respect thereto and the Bond
Insurer shall be deemed the Bondholder thereof to the extent of such
unreimbursed payment.

      BOOK-ENTRY BONDS: Beneficial interests in the Bonds, ownership and
transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.

      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, Delaware or California or
in the city in which the corporate trust offices of the Indenture Trustee or the
principal office of the Bond Insurer are located, are required or authorized by
law to be closed.

      CASH LIQUIDATION: As to any defaulted Mortgage Loan other than a Mortgage
Loan as to which an REO Acquisition occurred, a determination by the Master
Servicer evidenced in a certificate of a Servicing Officer that it has received
all Insurance Proceeds, Liquidation Proceeds and other payments or cash
recoveries which the Master Servicer reasonably and in good faith expects to be
finally recoverable with respect to such Mortgage Loan.

      CERTIFICATE DISTRIBUTION ACCOUNT: The account or accounts created and
maintained pursuant to Section 3.10(c) of the Trust Agreement. The Certificate
Distribution Account shall be an Eligible Account.

      CERTIFICATE INTEREST RATE: With respect to the Class M-1 Certificates, the
weighted average of the Bond Interest Rates of the Class M-1-1 Bonds and the
Class M-1-2 Bonds, weighted on the basis of the Bond Principal Balances thereof
as of the end of the prior Due Period. With respect to the Class M-2
Certificates, the weighted average of the Bond Interest Rates of the Class M-2-1
Bonds and the Class M-2-2 Bonds, weighted on the basis of the Bond Principal
Balances thereof as of the end of the prior Due Period. With respect to the
Class M-3 Certificates, the weighted average of the Bond Interest Rates of the
Class M-3-1 Bonds and the Class M-3-2 Bonds, weighted on the basis of the Bond
Principal Balances thereof as of the end of the prior Due Period. With respect
to the Class M-4 Certificates, the weighted average of the Bond Interest Rates
of the Class M-4-1 Bonds and the Class M-4-2 Bonds, weighted on the basis of the
Bond Principal Balances thereof as of the end of the prior Due Period. With
respect to the Class M-5 Certificates, the weighted average of the Bond Interest
Rates of the Class M-5-1 Bonds and the Class M-5-2 Bonds, weighted on the basis
of the Bond Principal Balances thereof as of the end of the prior Due Period.

      CERTIFICATE PAYING AGENT: The meaning specified in Section 3.10 of the
Trust Agreement.

      CERTIFICATE PERCENTAGE INTEREST: With respect to each Certificate, the
Certificate Percentage Interest stated on the face thereof.

      CERTIFICATE PRINCIPAL BALANCE: With respect to Class M-1 Certificates as
of any date of determination, the sum of the Bond Principal Balances of the
Class M-1-1 Bonds and Class M-1-2 Bonds. With respect to Class M-2 Certificates
as of any date of determination, the sum of the Bond Principal Balances of the
Class M-2-1 Bonds and Class M-2-2 Bonds. With respect to Class M-3 Certificates
as of any date of determination, the sum of the Bond Principal Balances of the
Class M-

                                       8
<PAGE>

3-1 Bonds and Class M-3-2 Bonds. With respect to Class M-4 Certificates as of
any date of determination, the sum of the Bond Principal Balances of the Class
M-4-1 Bonds and Class M-4-2 Bonds. With respect to Class M-5 Certificates as of
any date of determination, the sum of the Bond Principal Balances of the Class
M-5-1 Bonds and Class M-5-2 Bonds.

      CERTIFICATE REGISTER: The register maintained by the Certificate Registrar
in which the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates.

      CERTIFICATE REGISTRAR: Initially, the Indenture Trustee, in its capacity
as Certificate Registrar, or any successor to the Indenture Trustee in such
capacity.

      CERTIFICATE OF TRUST: The Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Statutory Trust Statute.

      CERTIFICATES OR OWNER TRUST CERTIFICATES: The Impac CMB Trust Series
2004-7 Owner Trust Certificates, Series 2004-7, evidencing the beneficial
ownership interest in the Issuer and executed by the Owner Trustee in
substantially the form set forth in Exhibit A to the Trust Agreement.

      CERTIFICATEHOLDER OR HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register. Owners of Certificates that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee, as the case may
be, the pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Issuer, any other obligor upon the Certificates or any
Affiliate of any of the foregoing Persons.

      CLASS: Any of the Class A Bonds or Class M Bonds.

      CLASS 1-A BONDS: The Class 1-A-1 Bonds and Class 1-A-2 Bonds.

      CLASS 2-A INSURED AMOUNT: Draws on the Bond Insurance Policy to cover
related Deficiency Amounts and Preference Amounts on the Class 2-A Bonds.

      CLASS A BONDS: The Class 1-A-1, Class 1-A-2 and Class 2-A Bonds in the
form attached as Exhibit A-1 to the Indenture.

      CLASS M BONDS: The Class M-1-1, Class M-1-2, Class M-2-1, Class M-2-2,
Class M-3-1, Class M-3-2, Class M-4-1, Class M-4-2, Class M-5-1 and Class M-5-2
Bonds in the form attached as Exhibit A-2 to the Indenture.

      CLOSING DATE: July 29, 2004.

      CODE: The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

      COLLATERAL: The meaning specified in the Granting Clause of the Indenture.

                                       9
<PAGE>

      COLLECTION ACCOUNT: The account or accounts created and maintained
pursuant to Section 3.06(d) of the Servicing Agreement. The Collection Account
shall be an Eligible Account.

      COLLECTION PERIOD: With respect to each Payment Date, the calendar month
immediately preceding the month in which such Payment Date occurs.

      COMMISSION: The Securities and Exchange Commission.

      COMPENSATING INTEREST: With respect to any Payment Date as determined
separately for each Loan Group, the amount of any Prepayment Interest Shortfalls
resulting from prepayments in full during the preceding calendar month on the
related Mortgage Loans, but only to the extent such Prepayment Interest
Shortfalls do not exceed an amount equal to the lesser of (a) one-twelfth of
0.125% of the aggregate Stated Principal Balance of the related Mortgage Loans
immediately preceding such Payment Date and (b) the sum of the Master Servicing
Fee and Subservicing Fee for such Payment Date for the related Mortgage Loans.

      CORPORATE TRUST OFFICE: With respect to the Indenture Trustee, Certificate
Registrar, Certificate Paying Agent and Paying Agent, the principal corporate
trust office of the Indenture Trustee and Bond Registrar at which at any
particular time its corporate trust business shall be administered, which office
at the date of the execution of this instrument is located at 1761 East St.
Andrew Place, Santa Ana, California 92705, Attention: IM0407. With respect to
the Owner Trustee, the principal corporate trust office of the Owner Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of this Trust Agreement is located at
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19801, Attention: Impac CMB Trust Series 2004-7 (IM0407).

      CUMULATIVE LOSSES: As to any Payment Date and the Mortgage Loans, the
cumulative aggregate amount of Realized Losses on the Mortgage Loans from the
Cut-off Date through the end of the calendar month immediately preceding such
Payment Date.

      CUT-OFF DATE: With respect to the Initial Mortgage Loans, July 1, 2004.
With respect to the Group 1 Subsequent Mortgage Loans and Group 2 Subsequent
Mortgage Loans, the applicable Subsequent Cut-off Date.

      CUT-OFF DATE BALANCE: The aggregate Stated Principal Balance of the
Initial Mortgage Loans as of the Cut-off Date.

      CUT-OFF DATE PRINCIPAL BALANCE: With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the Cut-off Date after applying the
principal portion of Monthly Payments due on or before such date, whether or not
received, and without regard to any payments due after such date.

      DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.

                                       10
<PAGE>

      DEFAULT: Any occurrence which is or with notice or the lapse of time or
both would become an Event of Default.

      DEFICIENCY AMOUNT: With respect to each Payment Date prior to the Final
Scheduled Payment Date and the Class 2-A Bonds, an amount equal to the sum of
(i) the excess, if any, of (a) the amount of Accrued Bond Interest on the Class
2-A Bonds for that Payment Date over (b) the related Available Funds for that
Payment Date, and (ii) the excess, if any of (a) the Bond Principal Balance of
the Class 2-A Bonds over (b) the aggregate Stated Principal Balance of the Group
2 Loans, in each case immediately following such Payment Date. With respect to
the Final Scheduled Payment Date and the Class 2-A Bonds, an amount equal to the
sum of (i) the excess, if any, of (a) the amount of Accrued Bond Interest on the
Class 2-A Bonds for that Payment Date over (b) the related Available Funds for
that Payment Date and (ii) the excess, if any, of the Bond Principal Balance of
all outstanding Class 2-A Bonds due on such Final Scheduled Payment Date to the
extent not paid from the related Available Funds on that Payment Date. For the
Class 2-A Bonds and any date on which the acceleration of the Bonds has been
directed or consented to by the Bondholders pursuant to the Indenture, the
amount required to pay the Bond Principal Balance of the Class 2-A Bonds in
full, together with accrued and unpaid interest thereon through the date of
payment of the Class 2-A Bonds.

      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 the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.

      DEFINITIVE BONDS: The meaning specified in Section 4.06 of the Indenture.

      DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced with an
Eligible Substitute Mortgage Loan.

      DEPOSITOR: IMH Assets Corp., a California corporation, or its successor in
interest.

      DEPOSITORY OR DEPOSITORY AGENCY: The Depository Trust Company or a
successor appointed by the Indenture Trustee. Any successor to the Depository
shall be an organization registered as a "clearing agency" pursuant to Section
17A of the Exchange Act and the regulations of the Securities and Exchange
Commission thereunder.

      DEPOSITORY PARTICIPANT: A Person for whom, from time to time, the
Depository effects book- entry transfers and pledges of securities deposited
with the Depository.

      DERIVATIVE CONTRACTS: The 8 Derivative Contracts between the Seller and
the Derivative Contract Counterparty for the benefit of the Class 1-A-1, Class
1-A-2 and Class 2-A Bonds, the Underlying Class M Bonds, the Grantor Trust
Certificates and the Owner Trust Certificates, set forth in Exhibit E of the
Indenture.

      DERIVATIVE CONTRACT COUNTERPARTY: Bank of America, N.A.

                                       11
<PAGE>

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

      DUE DATE: With respect to each Mortgage Loan, the day of the month on
which each scheduled Monthly Payment is due.

      DUE PERIOD: With respect to any Payment Date and the Mortgage Loans, the
period commencing on the second day of the month immediately preceding the month
of such Payment Date (or, with respect to the first Due Period, the day
following the Cut-off Date) and ending on the first day of the month of such
Payment Date.

      ELIGIBLE ACCOUNT: An account that is any of the following: (i) a
segregated account maintained with a federal or state chartered depository
institution (A) the short-term obligations of which are rated A-1+ or better by
Standard & Poor's and P-1 by Moody's at the time of any deposit therein or (B)
fully insured to the limits established by the FDIC, PROVIDED that any deposits
not so insured shall, to the extent acceptable to the Bond Insurer and each
Rating Agency, as evidenced in writing, be maintained such that (as evidenced by
an Opinion of Counsel delivered to the Indenture Trustee, the Bond Insurer and
each Rating Agency) the Indenture Trustee has a claim with respect to the funds
in such account or a perfected first security interest against any collateral
(which shall be limited to Eligible Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, (ii) a segregated trust
account or accounts maintained with a federal or state chartered depository
institution or trust company subject to regulations regarding fiduciary funds on
deposit similar to Title 12 of the Code of Federal Regulations Section 9.10(b),
which, in either case, has corporate trust powers, acting in its fiduciary
capacity, or (iii) in the case of the Collection Account or Servicing Account,
either (A) a trust account or accounts maintained at the corporate trust
department of the Indenture Trustee or (B) an account or accounts maintained at
the corporate trust department of the Indenture Trustee or the Subservicer (or
an affiliate thereof), as long as their short term debt obligations are rated
F-1 by Fitch Ratings, P-1 by Moody's and A-1 by Standard & Poor's or better and
their long term debt obligations are rated A by Fitch Ratings, A2 by Moody's and
A by Standard & Poor's or better, or (iv) an account or accounts of a depository
institution acceptable to each Rating Agency as evidenced in writing by each
Rating Agency that use of any such account as the Collection Account or the
Payment Account will not reduce the rating assigned to any of the Securities by
such Rating Agency below investment grade without taking into account the Bond
Insurance Policy and acceptable to the Bond Insurer as evidenced in writing.

      ELIGIBLE INVESTMENTS: One or more of the following:

                  (i) direct obligations of, and obligations fully guaranteed
      by, the United States of America, the Federal Home Mortgage Corporation,
      the Federal National Mortgage Association, the Federal Home Loan Banks or
      any agency or instrumentality of the United States of America the
      obligations of which are backed by the full faith and credit of the United
      States of America;

                  (ii) (A) demand and time deposits in, certificates of deposit
      of, banker's acceptances issued by or federal funds sold by any depository
      institution or trust company

                                       12
<PAGE>

      (including the Indenture Trustee or its agent acting in their respective
      commercial capacities) incorporated under the laws of the United States of
      America or any State thereof and subject to supervision and examination by
      federal and/or state authorities, so long as at the time of such
      investment or contractual commitment providing for such investment, such
      depository institution or trust company has a short term unsecured debt
      rating in the highest available rating category of each of the Rating
      Agencies and provided that each such investment has an original maturity
      of no more than 365 days, and (B) any other demand or time deposit or
      deposit which is fully insured by the FDIC;

                  (iii) repurchase obligations with a term not to exceed 30 days
      with respect to any security described in clause (i) above and entered
      into with a depository institution or trust company (acting as a
      principal) rated "A" or higher by Standard & Poor's and A2 or higher by
      Moody's;

                  (iv) securities bearing interest or sold at a discount issued
      by any corporation incorporated under the laws of the United States of
      America or any State thereof which has a long term unsecured debt rating
      in the highest available rating category of each of the Rating Agencies at
      the time of such investment;

                  (v) commercial paper having an original maturity of less than
      365 days and issued by an institution having a short term unsecured debt
      rating in the highest available rating category of each of the Rating
      Agencies at the time of such investment;

                  (vi) a guaranteed investment contract approved by each of the
      Rating Agencies and issued by an insurance company or other corporation
      having a long term unsecured debt rating in the highest available rating
      category of each of the Rating Agencies at the time of such investment;

                  (vii) money market funds having ratings in the highest
      available long term rating category of each of the Rating Agencies at the
      time of such investment; any such money market funds which provide for
      demand withdrawals being conclusively deemed to satisfy any maturity
      requirement for Eligible Investments set forth in the Indenture, including
      money market funds of the Indenture Trustee or any such funds that are
      managed or advised by the Indenture Trustee or any Affiliate thereof; and

                  (viii) any investment approved in writing by each of the
      Rating Agencies.

The Indenture Trustee may purchase from or sell to itself or an affiliate, as
principal or agent, the Eligible Investments listed above.

PROVIDED, HOWEVER, that each such instrument shall be acquired in an arm's
length transaction and no such instrument shall be an Eligible Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater

                                       13
<PAGE>

than 120% of the yield to maturity at par of such underlying obligations;
PROVIDED FURTHER, HOWEVER, that each such instrument acquired shall not be
acquired at a price in excess of par.

      ELIGIBLE SUBSTITUTE 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 an Officer's Certificate delivered to the Indenture Trustee, (i)
have an outstanding principal balance, after deduction of the principal portion
of the monthly payment due in the month of substitution (or in the case of a
substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an
aggregate outstanding principal balance, after such deduction), not in excess of
the outstanding principal balance of the Deleted Mortgage Loan (the amount of
any shortfall to be deposited by the Seller in the Collection Account in the
month of substitution); (ii) comply with each non-statistical representation and
warranty set forth in Section 3.1(b) of the Mortgage Loan Purchase Agreement as
of the date of substitution; (iii) have a Mortgage Rate no lower than and not
more than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage
Loan as of the date of substitution; (iv) have a Loan-to- Value Ratio at the
time of substitution no higher than that of the Deleted Mortgage Loan at the
time of substitution; (v) have a remaining term to stated maturity not greater
than (and not more than one year less than) that of the Deleted Mortgage Loan;
(vi) not be 30 days or more delinquent; (vii) be an adjustable-rate first lien
mortgage loan, if being substituted for a Group 1 Loan; and (viii) be a
fixed-rate first lien mortgage loan, if being substituted for a Group 2 Loan.

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

      EVENT OF DEFAULT: With respect to the Indenture, any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

                  (i) a failure by the Issuer to pay (a) Accrued Bond Interest
      on any Class of Bonds or the Principal Distribution Amount with respect to
      a Payment Date on such Payment Date or (b) the Unpaid Interest Shortfall
      with respect to any Class of Bonds, but only, with respect to clause (b),
      to the extent funds are available to make such payment as provided in the
      Indenture; or

                  (ii) the failure by the Issuer on the Final Scheduled Payment
      Date to reduce the Bond Principal Balance of any of the Class A Bonds or
      the Class M Bonds to zero; or

                  (iii) there occurs a default in the observance or performance
      of any covenant or agreement of the Issuer made in the Indenture, or any
      representation or warranty of the Issuer made in the Indenture or in any
      certificate or other writing delivered pursuant hereto or in connection
      herewith proving to have been incorrect in any material respect as of the
      time when the same shall have been made, and such default shall continue
      or not be cured, or the circumstance or condition in respect of which such
      representation or warranty was incorrect shall not have been eliminated or
      otherwise cured, for a period of 30 days after there shall have been
      given, by registered or certified mail, to the Issuer by the Indenture
      Trustee or to the Issuer and the Indenture Trustee by the Bond Insurer, or
      if a Bond Insurer

                                       14
<PAGE>

      Default exists, the Holders of at least 25% of the aggregate Bond
      Principal Balance of the Outstanding Bonds, a written notice specifying
      such default or incorrect representation or warranty and requiring it to
      be remedied and stating that such notice is a notice of default hereunder;
      or

                  (iv) there occurs the filing of a decree or order for relief
      by a court having jurisdiction in the premises in respect of the Issuer or
      any substantial part of the Trust Estate in an involuntary case under any
      applicable federal or state bankruptcy, insolvency or other similar law
      now or hereafter in effect, or appointing a receiver, liquidator,
      assignee, custodian, trustee, sequestrator or similar official of the
      Issuer or for any substantial part of the Trust Estate, or ordering the
      winding-up or liquidation of the Issuer's affairs, and such decree or
      order shall remain unstayed and in effect for a period of 60 consecutive
      days; or

                  (v) there occurs the commencement by the Issuer of a voluntary
      case under any applicable federal or state bankruptcy, insolvency or other
      similar law now or hereafter in effect, or the consent by the Issuer to
      the entry of an order for relief in an involuntary case under any such
      law, or the consent by the Issuer to the appointment or taking possession
      by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
      similar official of the Issuer or for any substantial part of the assets
      of the Trust Estate, or the making by the Issuer of any general assignment
      for the benefit of creditors, or the failure by the Issuer generally to
      pay its debts as such debts become due, or the taking of any action by the
      Issuer in furtherance of any of the foregoing.

      EVENT OF SERVICER TERMINATION: With respect to the Servicing Agreement, a
Servicing Default as defined in Section 6.01 of the Servicing Agreement.

      EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

      EXPENSE FEE RATE: With respect to each Mortgage Loan, the sum of the
Master Servicing Fee Rate, the applicable Subservicing Fee Rate, the Indenture
Trustee's Fee Rate, the Owner Trustee's Fee Rate, the Radian PMI Rate, if such
Mortgage Loan is a Radian PMI Insured Loan, and the related Net Derivative Fee
Rate.

      EXPENSES: The meaning specified in Section 7.02 of the Trust Agreement.

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

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

      FINAL CERTIFICATION: The final certification delivered by the Indenture
Trustee pursuant to Section 2.03(b) of the Indenture in the form attached
thereto as Exhibit D.

      FINAL SCHEDULED PAYMENT DATE: With respect to each Class of Bonds, the
Payment Date in November 2034.

                                       15
<PAGE>

      FITCH RATINGS: Fitch, Inc., or its successor in interest.

      FORECLOSURE PROFIT: With respect to a Liquidated Mortgage Loan, the
amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds
exceeds (ii) the related Stated Principal Balance (plus accrued and unpaid
interest thereon at the applicable Mortgage Rate from the date interest was last
paid through the date of receipt of the final Liquidation Proceeds) of such
Liquidated Mortgage Loan immediately prior to the final recovery of its
Liquidation Proceeds.

      FREDDIE MAC: Freddie Mac (formerly, the Federal Home Loan Mortgage
Corporation), or any successor thereto.

      FUNDING PERIOD: With respect to Loan Group 1, the period from the Closing
Date until the earlier of (i) the date on which the amount on deposit in the
Group 1 Pre-Funding Account is reduced to less than $10,000 or (ii) September
29, 2004. With respect to Loan Group 2, the period from the Closing Date until
the earlier of (i) the date on which the amount on deposit in the Group 2
Pre-Funding Account is reduced to less than $10,000 or (ii) September 29, 2004.

      GRANT: Pledge, bargain, sell, warrant, alienate, remise, release, convey,
assign, transfer, create, and grant a lien upon and a security interest in and
right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.

      GRANTOR TRUST CERTIFICATES: Any of the Class M-1, Class M-2, Class M-3,
Class M-4 or Class M-5 Certificates.

      GROSS MARGIN: With respect to any Group 1 Loan, the percentage set forth
as the "Gross Margin" for such Mortgage Loan on the Mortgage Loan Schedule, as
adjusted from time to time in accordance with the terms of the Servicing
Agreement.

      GROUP 1 ADJUSTED NET WAC RATE: On any Payment Date which is not a
Subordinated Transfer Payment Date, or which is a Subordinated Transfer Payment
Date but the Group 1 Loans are an Overcollateralized Loan Group, the Group 1 Net
WAC Rate. On any Subordinated Transfer Payment Date, if the Group 1 Loans are an
Undercollateralized Loan Group, the weighted average of the Group 1 Net WAC Rate
and the Group 2 Net WAC Rate, weighted on the basis of the aggregate Stated
Principal Balance of the Group 1 Loans as of the end of the prior Due Period,
and the Subordinated Transfer Realized Loss Amount, respectively.

      GROUP 1 AVAILABLE FUNDS: With respect to any Payment Date, the sum of the
following, in each case with respect to the Group 1 Loans:

                                       16
<PAGE>

                  (i) each previously undistributed Monthly Payment due after
      the Cut-off Date received on or prior to the related Determination Date or
      advanced prior to such Payment Date (other than Monthly Payments due after
      the related Due Period, which shall be treated as if received during the
      Due Period they were due and other than Monthly Payments with respect to
      which the Master Servicer has made an unreimbursed Advance) on each
      outstanding Group 1 Loan (less the related Master Servicing Fees, any
      Subservicing Fees under any Subservicing Agreement and any fees or
      penalties retained by the Master Servicer or any Subservicer, the fees of
      the Owner Trustee and the Indenture Trustee and any amounts in respect of
      the premium payable to Radian under the Radian Lender-Paid PMI Policies);

                  (ii) all proceeds of any Group 1 Loan repurchased during the
      related Prepayment Period (or deemed to have been so repurchased in
      accordance with the Servicing Agreement) pursuant to the Servicing
      Agreement and the amount of any shortfall deposited in the Collection
      Account in connection with the substitution of a Deleted Mortgage Loan
      pursuant to the Mortgage Loan Purchase Agreement, during the related
      Prepayment Period;

                  (iii) all other unscheduled collections (including, without
      limitation, Principal Prepayments, Insurance Proceeds, Liquidation
      Proceeds and REO Proceeds) received during the related Prepayment Period
      to the extent applied by the Master Servicer as recoveries of principal or
      interest of the related Group 1 Loan pursuant to the Servicing Agreement;
      and

                  (iv) any (i) Compensating Interest payments and (ii)
      Foreclosure Profits, to the extent not payable to the Subservicers;

                  (v) amounts transferred from the Group 1 Interest Coverage
      Account and, at the end of the Funding Period, any excess amounts
      transferred from the Group 1 Pre-Funding Account;

                  (vi) interest earned on amounts on deposit in the Group 1
      Pre-Funding Account;

      MINUS

                  (vii) expenses incurred by and reimbursable to the Master
      Servicer or the Depositor pursuant to the Servicing Agreement or
      otherwise, or in connection with enforcing any repurchase, substitution or
      indemnification obligation of the Seller (other than an Affiliate of the
      Depositor) in respect of a Group 1 Loan;

                  (viii)amounts expended by the Master Servicer (a) pursuant to
      the Servicing Agreement in good faith in connection with the restoration
      of property related to a Group 1 Loan damaged by an Uninsured Cause, and
      (b) in connection with the liquidation of a Mortgage Loan or disposition
      of an REO Property related to a Group 1 Loan to the extent not otherwise
      reimbursed to the Master Servicer pursuant to the Servicing Agreement;

                                       17
<PAGE>

                  (ix) if the Bonds have been declared due and payable following
      an Event of Default on such Payment Date, any amounts owed to the
      Indenture Trustee by the Issuer pursuant to Section 6.07 of the Indenture;

                  (x) the related Net Derivative Fee; and

                  (xi) any other amounts withdrawn from the Collection Account
      by the Master Servicer pursuant to Section 3.07(a)(ii) through (xv) of the
      Servicing Agreement, not described above in clauses (vii) through (x)
      above;

provided, however, that on any Subordinated Transfer Payment Date, the Group 1
Available Funds shall be increased (if it is the Undercollateralized Loan Group)
or reduced (if it is the Overcollateralized Loan Group), by the Subordinated
Payment Transfer Fraction of the Available Funds for the Overcollateralized Loan
Group.

      GROUP 1 BOND: A Class 1-A-1, Class 1-A-2, Class M-1-1, Class M-2-1, Class
M-3-1, Class M-4-1 or Class M-5-1 Bond.

      GROUP 1 CUT-OFF DATE BALANCE: $997,742,176.22.

      GROUP 1 INTEREST COVERAGE ACCOUNT: An account established and maintained
pursuant to Section 3.27 of the Indenture.

      GROUP 1 INTEREST COVERAGE AMOUNT: The amount to be paid by the Depositor
to the Indenture Trustee for deposit in the Group 1 Interest Coverage Account on
the Closing Date pursuant to Section 3.27 of the Indenture, which amount is
$527,620.00.

      GROUP 1 LOAN: A Mortgage Loan in Loan Group 1.

      GROUP 1 NET WAC RATE: For any Payment Date, the excess of (i) the weighted
average of the Net Mortgage Rates on the Group 1 Loans included in the trust as
of the end of the prior Due Period, weighted on the basis of the Stated
Principal Balances thereof as of the end of the prior Due Period over (ii) the
related Net Derivative Fee Rate for such Payment Date.

      GROUP 1 ORIGINAL PRE-FUNDED AMOUNT: $324,447,013.52, which is the amount
deposited in the Group 1 Pre-Funding Account on the Closing Date by the
Indenture Trustee with funds received from the Company.

      GROUP 1 OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any Payment
Date (i) on or before the Payment Date occurring in January 2005, $0, or (ii)
with respect to any Payment Date thereafter, 0.50% of the sum of the Group 1
Cut-off Date Balance and the Group 1 Original Pre- Funded Amount; provided, that
if the aggregate Bond Principal Balance of the Group 2 Bonds has been reduced to
zero, the Group 1 Overcollateralization Target Amount will be 0.50% of the sum
of the Group 1 Cut-off Date Balance, the Group 2 Cut-off Date Balance, the Group
1 Original Pre- Funded Amount and the Group 2 Original Pre-Funded Amount.

                                       18
<PAGE>

      GROUP 1 PRE-FUNDED AMOUNT: The amount on deposit in the Group 1
Pre-Funding Account on any date of determination.

      GROUP 1 PRE-FUNDING ACCOUNT: An account established by the Indenture
Trustee for the benefit of the Bondholders and funded on the Closing Date by the
Company with the Group 1 Original Pre-Funded Amount.

      GROUP 1 PRINCIPAL DISTRIBUTION AMOUNT: For any Payment Date and the Group
1 Loans, the sum of (a) the related Basic Principal Distribution Amount, (b) the
amount of related and non-related Net Monthly Excess Cashflow used to cover
related Realized Losses, Undercollateralized Amounts and Subordinated Transfer
Realized Loss Amounts as provided in Section 3.05(d) and Section 3.05(h) of the
Indenture and (c) the related Overcollateralization Increase Amount.

      GROUP 1 SUBSEQUENT MORTGAGE LOANS: A Mortgage Loan sold by the Depositor
to the Trust Estate pursuant to Section 2.05 of the Indenture, such Mortgage
Loan being identified on the Mortgage Loan Schedule attached to a Subsequent
Transfer Instrument.

      GROUP 1 SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT: The Group 1
Subsequent Mortgage Loan Purchase Agreement, dated as of the applicable
Subsequent Transfer Date, between the Seller, as seller, and the Purchaser, as
purchaser, relating to the sale, transfer and assignment of the Group 1
Subsequent Mortgage Loans.

      GROUP 1 SUBSEQUENT TRANSFER INSTRUMENT: With respect to the Group 1
Subsequent Mortgage Loans, the subsequent transfer instrument, dated as of the
applicable Subsequent Transfer Date, between IMH Assets Corp., as Company, and
Deutsche Bank National Trust Company, as indenture trustee, or such other
instrument as agreed upon by the Company and the Indenture Trustee, a form of
which is attached as Exhibit F to the Indenture.

      GROUP 2 ADJUSTED NET WAC RATE: On any Payment Date which is not a
Subordinated Transfer Payment Date, or which is a Subordinated Transfer Payment
Date but the Group 2 Loans are an Overcollateralized Loan Group, the Group 2 Net
WAC Rate. On any Subordinated Transfer Payment Date, if the Group 2 Loans are an
Undercollateralized Loan Group, the weighted average of the Group 2 Net WAC Rate
and the Group 1 Net WAC Rate, weighted on the basis of the aggregate Stated
Principal Balance of the Group 2 Loans as of the end of the prior Due Period,
and the Subordinated Transfer Realized Loss Amount, respectively.

      GROUP 2 AVAILABLE FUNDS: With respect to any Payment Date, the sum of the
following, in each case with respect to the Group 2 Loans:

                  (i) each previously undistributed Monthly Payment due after
      the Cut-off Date received on or prior to the related Determination Date or
      advanced prior to such Payment Date (other than Monthly Payments due after
      the related Due Period, which shall be treated as if received during the
      Due Period they were due and other than Monthly Payments with respect to
      which the Master Servicer has made an unreimbursed Advance) on each
      outstanding Group 2 Loan (less the related Master Servicing Fees, any
      Subservicing

                                       19
<PAGE>

      Fees under any Subservicing Agreement and any fees or penalties retained
      by the Master Servicer or any Subservicer, the fees of the Owner Trustee
      and the Indenture Trustee);

                  (ii) all proceeds of any Group 2 Loan repurchased during the
      related Prepayment Period (or deemed to have been so repurchased in
      accordance with the Servicing Agreement) pursuant to the Servicing
      Agreement and the amount of any shortfall deposited in the Collection
      Account in connection with the substitution of a Deleted Mortgage Loan
      pursuant to the Mortgage Loan Purchase Agreement, during the related
      Prepayment Period;

                  (iii) all other unscheduled collections (including, without
      limitation, Principal Prepayments, Insurance Proceeds, Liquidation
      Proceeds and REO Proceeds) received during the related Prepayment Period
      to the extent applied by the Master Servicer as recoveries of principal or
      interest of the related Group 2 Loan pursuant to the Servicing Agreement;
      and

                  (iv) any (i) Compensating Interest payments and (ii)
      Foreclosure Profits, to the extent not payable to the Subservicers;

                  (v) amounts transferred from the Group 2 Interest Coverage
      Account and, at the end of the Funding Period, any excess amounts
      transferred from the Group 2 Pre-Funding Account;

                  (vi) interest earned on amounts on deposit in the Group 2
      Pre-Funding Account;

      MINUS

                  (vii) expenses incurred by and reimbursable to the Master
      Servicer or the Depositor pursuant to the Servicing Agreement or
      otherwise, or in connection with enforcing any repurchase, substitution or
      indemnification obligation of the Seller (other than an Affiliate of the
      Depositor) in respect of a Group 2 Loan;

                  (viii)amounts expended by the Master Servicer (a) pursuant to
      the Servicing Agreement in good faith in connection with the restoration
      of property related to a Group 2 Loan damaged by an Uninsured Cause, and
      (b) in connection with the liquidation of a Mortgage Loan or disposition
      of an REO Property related to a Group 2 Loan to the extent not otherwise
      reimbursed to the Master Servicer pursuant to the Servicing Agreement;

                  (ix) if the Bonds have been declared due and payable following
      an Event of Default on such Payment Date, any amounts owed to the
      Indenture Trustee by the Issuer pursuant to Section 6.07 of the Indenture;

                  (x)   the related Net Derivative Fee;

                                       20
<PAGE>

                  (xi) any other amounts withdrawn from the Collection Account
      by the Master Servicer pursuant to Section 3.07(a)(ii) through (xv) of the
      Servicing Agreement, not described above in clauses (vii) through (x)
      above; and

                  (xii) the Premium Amount in respect of the Class 2-A Bonds;

provided, however, that on any Subordinated Transfer Payment Date, the Group 2
Available Funds shall be increased (if it is the Undercollateralized Loan Group)
or reduced (if it is the Overcollateralized Loan Group), by the Subordinated
Payment Transfer Fraction of the Available Funds for the Overcollateralized Loan
Group.

      GROUP 2 BOND: A Class 2-A, Class M-1-2, Class M-2-2, Class M-3-2, Class
M-4-2 or Class M-5-2 Bond.

      GROUP 2 CUT-OFF DATE BALANCE: $662,257,701.20.

      GROUP 2 INTEREST COVERAGE ACCOUNT: An account established and maintained
pursuant to Section 3.27 of the Indenture.

      GROUP 2 INTEREST COVERAGE AMOUNT: The amount to be paid by the Depositor
to the Indenture Trustee for deposit in the Group 2 Interest Coverage Account on
the Closing Date pursuant to Section 3.27 of the Indenture, which amount is
$323,380.00.

      GROUP 2 LOAN: A Mortgage Loan in Loan Group 2.

      GROUP 2 NET WAC RATE: For any Payment Date, the excess of (i) the weighted
average of the Net Mortgage Rates on the Group 2 Loans included in the trust as
of the end of the prior Due Period, weighted on the basis of the Stated
Principal Balances thereof as of the end of the prior Due Period over (ii) the
related Net Derivative Fee Rate for such Payment Date.

      GROUP 2 ORIGINAL PRE-FUNDED AMOUNT: $215,553,108.62, which is the amount
deposited in the Group 2 Pre-Funding Account on the Closing Date by the
Indenture Trustee with funds received from the Company.

      GROUP 2 OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any Payment
Date, (i) on or before the Payment Date occurring in January 2005, $0, or (ii)
with respect to any Payment Date thereafter, 0.50% of the sum of Group 2 Cut-off
Date Balance and the Group 2 Original Pre-Funded Amount; provided, that if the
aggregate Bond Principal Balance of the Group 1 Bonds has been reduced to zero,
the Group 2 Overcollateralization Target Amount will be 0.50% of the sum of the
Group 1 Cut-off Date Balance, the Group 2 Cut-off Date Balance, the Group 1
Original Pre-Funded Amount and the Group 2 Original Pre-Funded Amount.

      GROUP 2 PRINCIPAL DISTRIBUTION AMOUNT: For any Payment Date and the Group
2 Loans, the sum of (a) the related Basic Principal Distribution Amount, (b) the
amount of related and non-related Net Monthly Excess Cashflow used to cover
related Realized Losses, Undercollateralized Amounts

                                       21
<PAGE>

and Subordinated Realized Loss Transfer Amounts as provided in Section 3.05(d)
and Section 3.05(h) of the Indenture and (c) the related Overcollateralization
Increase Amount.

      GROUP 2 PRE-FUNDED AMOUNT: The amount on deposit in the Group 2
Pre-Funding Account on any date of determination.

      GROUP 2 PRE-FUNDING ACCOUNT: An account established by the Indenture
Trustee for the benefit of the Bondholders and funded on the Closing Date by the
Company with the Group 2 Original Pre-Funded Amount.

      GROUP 2 SUBSEQUENT MORTGAGE LOANS: A Mortgage Loan sold by the Depositor
to the Trust Estate pursuant to Section 2.05 of the Indenture, such Mortgage
Loan being identified on the Mortgage Loan Schedule attached to a Group 2
Subsequent Transfer Instrument.

      GROUP 2 SUBSEQUENT MORTGAGE LOAN PURCHASE AGREEMENT: The Group 2
Subsequent Mortgage Loan Purchase Agreement, dated as of the applicable
Subsequent Transfer Date, between the Seller, as seller, and the Purchaser, as
purchaser, relating to the sale, transfer and assignment of the Group 2
Subsequent Mortgage Loans.

      GROUP 2 SUBSEQUENT TRANSFER INSTRUMENT: With respect to the Group 2
Subsequent Mortgage Loans, the subsequent transfer instrument, dated as of the
applicable Subsequent Transfer Date, between IMH Assets Corp., as Company, and
Deutsche Bank National Trust Company, as indenture trustee, or such other
instrument as agreed upon by the Company and the Indenture Trustee, a form of
which is attached as Exhibit F to the Indenture.

      IMPAC HOLDINGS: Impac Mortgage Holdings, Inc., a Maryland corporation, and
its successors and assigns.

      INDEMNIFIED PARTY: The meaning specified in Section 7.02 of the Trust
Agreement.

      INDENTURE: The indenture dated as of July 29, 2004, between the Issuer and
the Indenture Trustee, relating to the Impac CMB Trust Series 2004-7 Bonds.

      INDENTURE TRUSTEE: Deutsche Bank National Trust Company, and its
successors and assigns or any successor indenture trustee appointed pursuant to
the terms of the Indenture.

      INDENTURE TRUSTEE'S FEE: With respect to any Payment Date, one month's
interest accrued at the Indenture Trustee's Fee Rate on the Stated Principal
Balance of each Mortgage Loan as of the first day of the related Due Period,
plus the Group 1 Pre-Funded Amount and Group 2 Pre-Funded Amount.

      INDENTURE TRUSTEE'S FEE RATE: A rate equal to 0.0007% per annum.

      INDEPENDENT: When used with respect to any specified Person, the Person
(i) is in fact independent of the Issuer, any other obligor on the Bonds, the
Seller, the Master Servicer, the Depositor and any Affiliate of any of the
foregoing Persons, (ii) does not have any direct financial

                                       22
<PAGE>

interest or any material indirect financial interest in the Issuer, any such
other obligor, the Seller, the Master Servicer, the Depositor or any Affiliate
of any of the foregoing Persons and (iii) is not connected with the Issuer, any
such other obligor, the Seller, the Master Servicer, the Depositor or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.

      INDEPENDENT CERTIFICATE: A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 10.01 of the Indenture, made by an
independent appraiser or other expert appointed by an Issuer Request and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.

      INDEX: With respect to any Mortgage Loan, the index for the adjustment of
the Mortgage Rate set forth as such on the related Mortgage Note.

      INITIAL BOND PRINCIPAL BALANCE: With respect to the Class 1-A-1 Bonds,
$1,047,174,000, with respect to the Class 1-A-2 Bonds, $116,352,000, with
respect to the Class 2-A Bonds, $772,477,000, with respect to the Class M-1-1
Bonds, $23,139,000, with respect to the Class M-2-1 Bonds, $36,360,000, with
respect to the Class M-3-1 Bonds, $26,444,000, with respect to the Class M-4-1
Bonds, $36,360,000, with respect to the Class M-5-1 Bonds, $36,360,000, with
respect to the Class M-1-2 Bonds, $15,361,000, with respect to the Class M-2-2
Bonds, $24,139,000, with respect to the Class M-3-2 Bonds, $17,556,000, with
respect to the Class M-4-2 Bonds, $24,139,000 and with respect to the Class
M-5-2 Bonds, $24,139,000.

      INITIAL CERTIFICATION: The initial certification delivered by the
Indenture Trustee pursuant to Section 2.03(a) of the Indenture in the form
attached thereto as Exhibit C.

      INITIAL MORTGAGE LOAN: Any of the Mortgage Loans included in the Trust
Estate as of the Closing Date. The aggregate principal balance of the Initial
Mortgage Loans as of the Cut-off Date is equal to approximately
$1,659,999,877.86.

      INITIAL SUBSERVICERS: With respect to substantially all of the Mortgage
Loans, GMAC Mortgage Corporation, or their respective successors in interest.

      INSURANCE ACCOUNT: The account created and maintained pursuant to Section
11.02(b) of the Indenture. The Insurance Account shall be an Eligible Account.

      INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any insurance
policy covering a Mortgage Loan which are required to be remitted to the Master
Servicer, net of any component thereof (i) covering any expenses incurred by or
on behalf of the Master Servicer in connection with obtaining such proceeds,
(ii) that is applied to the restoration or repair of the related Mortgaged
Property or (iii) released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures.

                                       23
<PAGE>

      INSURED AMOUNT: Shall have the meaning assigned to the term "Insured
Amount" in the Bond Insurance Policy.

      INSURED UNDERCOLLATERALIZATION AMOUNT: With respect to any Payment Date
and the Group 2 Loans, the amount by which the Bond Principal Balance of the
Class 2-A Bonds exceeds the sum of the aggregate Stated Principal Balance of the
Group 2 Loans and the Group 2 Pre-Funded Amount and, if it is an
Undercollateralized Loan Group, any Subordinated Transfer Realized Loss Amount,
in each case immediately following distributions on that Payment Date.

      INTEREST COVERAGE ACCOUNTS: The Group 1 Interest Coverage Account and the
Group 2 Interest Coverage Account established and maintained pursuant to Section
3.27 of the Indenture.

      INTEREST COVERAGE AMOUNT: Any of the Group 1 Interest Coverage Amount or
the Group 2 Interest Coverage Amount.

      INTEREST DETERMINATION DATE: With respect to the first Accrual Period, the
second LIBOR Business Day preceding the Closing Date, and with respect to each
Accrual Period thereafter, the second LIBOR Business Day preceding the related
Payment Date on which such Accrual Period commences.

      INTEREST RATE ADJUSTMENT DATE: With respect to each Mortgage Loan, the
date or dates on which the Mortgage Rate is adjusted in accordance with the
related Mortgage Note.

      INTERESTED PERSON: As of any date of determination, the Depositor, the
Master Servicer the Bond Insurer, the Indenture Trustee, any Mortgagor, or any
Person actually known to a Responsible Officer of the Trustee to be an Affiliate
of any of them.

      INVESTMENT COMPANY ACT: The Investment Company Act of 1940, as amended,
and any amendments thereto.

      IRS: The Internal Revenue Service.

      ISSUER: Impac CMB Trust Series 2004-7, a Delaware statutory trust, or its
successor in interest.

      ISSUER REQUEST: A written order or request signed in the name of the
Issuer by any one of its Authorized Officers and approved in writing by the Bond
Insurer, so long as no Bond Insurer Default exists, and delivered to the
Indenture Trustee.

      LIBOR BUSINESS DAY: A day on which banks are open for dealing in foreign
currency and exchange in London and New York City.

      LIEN: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing

                                       24
<PAGE>

lease having substantially the same economic effect as any of the foregoing and
the filing of any financing statement under the UCC (other than any such
financing statement filed for informational purposes only) or comparable law of
any jurisdiction to evidence any of the foregoing; PROVIDED, HOWEVER, that any
assignment pursuant to Section 6.02 of the Servicing Agreement shall not be
deemed to constitute a Lien.

      LIQUIDATED MORTGAGE LOAN: With respect to any Payment Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified in the Servicing Agreement, as of the end of
the related Due Period that substantially all Liquidation Proceeds which it
reasonably expects to recover with respect to the disposition of the related
Mortgaged Property or REO Property have been recovered.

      LIQUIDATION EXPENSES: Out-of-pocket expenses (exclusive of overhead) which
are incurred by or on behalf of the Master Servicer, or any Special Servicer on
the Master Servicer's behalf, in connection with the liquidation of any Mortgage
Loan and not recovered under any insurance policy, such expenses including,
without limitation, legal fees and expenses, any unreimbursed amount expended
(including, without limitation, amounts advanced to correct defaults on any
mortgage loan which is senior to such Mortgage Loan, amounts advanced to keep
current or pay off a mortgage loan that is senior to such Mortgage Loan and
Disposition Fees) respecting the related Mortgage Loan and any related and
unreimbursed expenditures for real estate property taxes or for property
restoration, preservation or insurance against casualty loss or damage.

      LIQUIDATION PROCEEDS: Proceeds (including Insurance Proceeds) received in
connection with the liquidation of any Mortgage Loan or related REO Property,
whether through trustee's sale, foreclosure sale or otherwise.

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

      LOAN GROUP 1: The Group 1 Loans.

      LOAN GROUP 2: The Group 2 Loans.

      LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan, as of any date of
determination, a fraction expressed as a percentage, the numerator of which is
the then current principal amount of the Mortgage Loan, and the denominator of
which is the Appraised Value of the related Mortgaged Property.

      LOAN YEAR: With respect to any Mortgage Loan, the one-year period
commencing on the day succeeding the origination of such Mortgage Loan and
ending on the anniversary date of such Mortgage Loan, and each annual period
thereafter.

      LOST NOTE AFFIDAVIT: With respect to any Mortgage Loan as to which the
original Mortgage Note has been lost or destroyed and has not been replaced, an
affidavit from the Seller certifying that the original Mortgage Note has been
lost, misplaced or destroyed (together with a copy of the related Mortgage
Note).

                                       25
<PAGE>

      MAJORITY CERTIFICATEHOLDER: A Holder of a 50.01% or greater Certificate
Percentage Interest of the Owner Trust Certificates.

      MASTER SERVICER: Impac Funding Corporation, a California corporation, and
its successors and assigns.

      MASTER SERVICING FEE: With respect to each Mortgage Loan and any Payment
Date, the fee payable monthly to the Master Servicer in respect of master
servicing compensation that accrues at an annual rate equal to the Master
Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the related Due Date in the related Due Period.

      MASTER SERVICING FEE RATE: With respect to any Mortgage Loan, 0.030% per
annum.

      MAXIMUM BOND RATE: With respect to any Class of Bonds, 11.25% per annum.

      MAXIMUM MORTGAGE RATE: With respect to each Mortgage Loan, the maximum
Mortgage Rate.

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

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

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

      MINIMUM MORTGAGE RATE: With respect to each Group 1 Loan, the minimum
Mortgage Rate.

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

      MONTHLY PAYMENT: With respect to any Mortgage Loan (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization schedule at the time applicable thereto (after
adjustment, if any, for partial Principal Prepayments and for Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than a Deficient
Valuation, or similar proceeding or any moratorium or similar waiver or grace
period).

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

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

                                       26
<PAGE>

      MORTGAGE FILE: The file containing the Related Documents pertaining to a
particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to the Mortgage Loan Purchase Agreement or the
Servicing Agreement.

      MORTGAGE LOANS: The Mortgage Loans that will be transferred and assigned
to the Trust pursuant to Section 2.03(a) of the Indenture, each Mortgage Loan so
held being identified in the Mortgage Loan Schedule. The Mortgage Loans have
been divided into two groups, Loan Group 1 and Loan Group 2.

      MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement,
dated as of the Closing Date, between the Seller, as seller, and the Purchaser,
as purchaser, relating to the sale, transfer and assignment of the Initial
Mortgage Loans.

      MORTGAGE LOAN SCHEDULE: With respect to any date, the schedule of Mortgage
Loans held by the Issuer on such date. The schedule of (i) Initial Mortgage
Loans as of the Cut-off Date is the schedule set forth in Exhibit B of the
Indenture and (ii) the applicable Group 1 Subsequent Mortgage Loans and Group 2
Subsequent Mortgage Loans as of the related Group 1 or Group 2 Subsequent
Cut-off Date is Schedule 1 of the applicable Group 1 or Group 2 Subsequent
Transfer Instrument, which respective schedules set forth as to each Mortgage
Loan:

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

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

                  (iii) the original Mortgage Rate;

                  (iv) the maturity date;

                  (v) the original principal balance;

                  (vi) the first Payment Date;

                  (vii) the type of Mortgaged Property;

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

                  (ix) the Cut-off Date Principal Balance;

                  (x) the Index and the Gross Margin, if applicable;

                  (xi) the Adjustment Date frequency and Payment Date frequency,
      if applicable;

                  (xii) the occupancy status;

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<PAGE>

                  (xiii) the purpose of the Mortgage Loan;

                  (xiv) the Appraised Value of the Mortgaged Property;

                  (xv) (A) the original term to maturity and (B) if such
      Mortgage Loan is a Balloon Loan, the amortization term thereof;

                  (xvi) the paid-through date of the Mortgage Loan;

                  (xvii)the Loan-to-Value Ratio;

                  (xviii) whether such Mortgage Loan is a Radian PMI Insured
      Loan, and if so, the related Radian PMI Rate; and

                  (xix) whether or not the Mortgage Loan was underwritten
      pursuant to a limited documentation program.

      The Mortgage Loan Schedule shall also set forth the total of the amounts
described under (ix) above for all of the Mortgage Loans.

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

      MORTGAGE RATE: With respect to any Mortgage Loan, the annual rate at which
interest accrues on such Mortgage Loan.

      MORTGAGED PROPERTY: The underlying property, including real property and
improvements thereon, securing a Mortgage Loan.

      MORTGAGOR: The obligor or obligors under a Mortgage Note.

      NET COLLECTIONS: With respect to any Corrected Mortgage Loan, an amount
equal to all payments on account of interest and principal on such Mortgage
Loan.

      NET DERIVATIVE CONTRACT PAYMENT AMOUNT: With respect to any Payment Date,
the amount equal to the excess, if any, of (a) the aggregate amount payable on
that Payment Date to the Issuer from the Derivative Contract Counterparty
pursuant to the Derivative Contracts, over (b) the aggregate amount payable on
that Payment Date to the Derivative Contract Counterparty under the Derivative
Contracts, in each case as described in Section 8.02(c) of the Indenture. For
the avoidance of doubt, amounts payable under clause (a) or clause (b) of the
preceding sentence include, without limitation, termination payments payable
under the Derivative Contracts other than any amount which would be considered
an Additional Derivative Contract Counterparty Payment.

      NET DERIVATIVE FEE: With respect to any Payment Date and the Group 1 Loans
and Group 2 Loans, the amount equal to the excess, if any, of (a) the aggregate
amount payable on that Payment Date to the Derivative Contract Counterparty in
respect of the related Derivative Contracts, other

                                       28
<PAGE>

than any termination payments to the Derivative Contract Counterparty as a
result of a default of the Derivative Contract Counterparty, over (b) the
aggregate amount payable on that Payment Date to the Issuer from the Derivative
Contract Counterparty pursuant to the Derivative Contracts.

      NET DERIVATIVE FEE RATE: With respect to any Payment Date and each of Loan
Group 1 and Loan Group 2, the fraction, expressed as a rate per annum, equal to
(x) the Net Derivative Fee on such Payment Date related to such Loan Group over
(y) the sum of the aggregate Stated Principal Balance of the Mortgage Loans, the
Group 1 Pre-Funded Amount and Group 2 Pre-Funded Amount.

      NET LIQUIDATION PROCEEDS: With respect to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.

      NET MONTHLY EXCESS CASH FLOW: For any Payment Date and each Loan Group,
the sum of (a) any related Overcollateralization Release Amount and (b) the
excess of (x) the related Available Funds and, with respect to the Group 2
Loans, the Class 2-A Insured Amount, if any, for such Payment Date over (y) the
sum for such Payment Date of (A) the aggregate amount of Accrued Bond Interest
for the related Bonds, (B) the related Principal Remittance Amount and (c) any
amounts payable from the Derivative Contracts pursuant to Section 3.05(e)(vii)
of the Indenture.

      NET MORTGAGE RATE: On any Mortgage Loan and any Payment Date, the then
applicable mortgage rate thereon for the scheduled monthly payment thereon
during the related Due Period minus the sum of (1) the Master Servicing Fee
Rate, (2) the Subservicing Fee Rate, (3) the Indenture Trustee's Fee Rate, (4)
the Owner Trustee's Fee Rate and (5) the related Radian PMI Rate, if such
Mortgage Loan is a Radian PMI Insured Loan.

      NONRECOVERABLE ADVANCE: Any advance (i) which was previously made or is
proposed to be made by the Master Servicer; and (ii) which, 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 the Master Servicer from Liquidation
Proceeds, Insurance Proceeds or future payments on any Mortgage Loan. The
Indenture Trustee may conclusively rely on any determination of
nonrecoverability made by the Master Servicer.

      OFFICER'S CERTIFICATE: With respect to the Master Servicer, a certificate
signed by the President, Managing Director, a Director, a Vice President or an
Assistant Vice President, of the Master Servicer and delivered to the Indenture
Trustee. With respect to the Issuer, a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.

      ONE-MONTH LIBOR: With respect to any Accrual Period, the rate determined
by the Indenture Trustee on the related Interest Determination Date on the basis
of the London interbank offered rate for one-month United States dollar
deposits, as such rates appear on the Telerate Screen Page 3750, as of 11:00
a.m. (London time) on such Interest Determination Date.

                                       29
<PAGE>

      In the event that on any Interest Determination Date, Telerate Screen 3750
fails to indicate the London interbank offered rate for one-month United States
dollar deposits, then One-Month LIBOR for the related Interest Accrual Period
will be established by the Indenture Trustee as follows:

                  (i) If on such Interest Determination Date two or more
      Reference Banks provide such offered quotations, One-Month LIBOR for the
      related Accrual Period shall be the arithmetic mean of such offered
      quotations (rounded upwards if necessary to the nearest whole multiple of
      1/16%).

                  (ii) If on such Interest Determination Date fewer than two
      Reference Banks provide such offered quotations, One-Month LIBOR for the
      related Accrual Period shall be the higher of (i) One-Month LIBOR as
      determined on the previous Interest Determination Date and (ii) the
      Reserve Interest Rate.

      The establishment of One-Month LIBOR on each Interest Determination Date
by the Indenture Trustee and the Indenture Trustee's calculation of the rate of
interest applicable for the related Accrual Period shall (in the absence of
manifest error) be final and binding.

      OPINION OF COUNSEL: A written opinion of counsel acceptable to the
Indenture Trustee and/or the Bond Insurer, as applicable, in its reasonable
discretion which counsel may be in-house counsel for the Master Servicer if
acceptable to the Indenture Trustee, the Bond Insurer and the Rating Agencies or
counsel for the Depositor, as the case may be.

      ORIGINAL VALUE: Except in the case of a refinanced Mortgage Loan, the
lesser of the Appraised Value or sales price of Mortgaged Property at the time a
Mortgage Loan is closed, and for a refinanced Mortgage Loan, the Original Value
is the value of such property set forth in an appraisal acceptable to the Master
Servicer.

      OUTSTANDING: With respect to the Bonds, as of the date of determination,
all Bonds theretofore executed, authenticated and delivered under this Indenture
except:

                  (i) Bonds theretofore canceled by the Bond Registrar or
      delivered to the Indenture Trustee for cancellation; and

                  (ii) Bonds in exchange for or in lieu of which other Bonds
      have been executed, authenticated and delivered pursuant to the Indenture
      unless proof satisfactory to the Indenture Trustee is presented that any
      such Bonds are held by a holder in due course;

all Bonds that have been paid with funds provided under the Bond Insurance
Policy shall be deemed to be Outstanding until the Bond Insurer has been
reimbursed with respect thereto.

      OUTSTANDING MORTGAGE LOAN: As to any Due Date, a Mortgage Loan (including
an REO Property) which was not the subject of a Principal Prepayment in Full,
Cash Liquidation or REO Disposition and which was not purchased, deleted or
substituted for prior to such Due Date pursuant to the Servicing Agreement.

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<PAGE>

      OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Payment Date
and each Loan Group, the lesser of (i) the related Net Monthly Excess Cashflow
for such Payment Date after payments to the Bond Insurer in respect of Section
3.05(d)(vi) and Section 3.05(h)(i) of the Indenture, with respect to the Group 1
Loans and Group 2 Loans, respectively, (ii) the excess, if any, of (a) the
related Overcollateralization Target Amount over (b) the related
Overcollateralized Amount on such Payment Date (after taking into account
payments to the related Bonds of the related Basic Principal Distribution Amount
on such Payment Date) and (iii) the amount necessary, pursuant to Section
3.05(d)(iv) of the Indenture, with respect to the Group 1 Loans, and Section
3.05(h)(v) of the Indenture, with respect to the Group 2 Loans, so that the
excess, if any, of (x) the sum of the aggregate Stated Principal Balance of the
related Mortgage Loans as of the end of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period, and after reduction for Realized
Losses on the related mortgage loans incurred during the related Prepayment
Period) and the Group 1 Pre-Funded Amount or Group 2 Pre- Funded Amount, as
applicable, over (y) the aggregate Bond Principal Balance of the related Bonds
(as reduced by payments of the related Basic Principal Distribution Amount and
any amounts in respect of Net Monthly Excess Cashflow, in reduction of the Bond
Principal Balances thereof on that Payment Date prior to payment of the
Overcollateralization Increase Amount), is equal to the related
Overcollateralization Target Amount.

      OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any Payment Date and
each Loan Group, the lesser of (x) the related Principal Remittance Amount for
such Payment Date and (y) the excess, if any, of (i) the related
Overcollateralized Amount for such Payment Date (assuming that 100% of the
related Principal Remittance Amount is applied as a principal payment on such
Payment Date) over (ii) the related Overcollateralization Target Amount for such
Payment Date.

      OVERCOLLATERALIZATION TARGET AMOUNT: The Group 1 Overcollateralization
Target Amount or Group 2 Overcollateralization Target Amount, as applicable.

      OVERCOLLATERALIZED AMOUNT: For any Payment Date, other than a Subordinated
Transfer Payment Date, and each Loan Group, the amount, if any, by which (i) the
sum of the aggregate principal balance of the related Mortgage Loans (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or Advanced, and unscheduled collections of
principal received during the related Prepayment Period, but prior to reduction
for Realized Losses incurred during the related Prepayment Period) and the Group
1 Pre-Funded Amount or the Group 2 Pre-Funded Amount, as applicable, exceeds
(ii) the aggregate Bond Principal Balance of such related Loan Group as of such
Payment Date (after giving effect to distributions to be made on such Payment
Date).

      For any Subordinated Transfer Payment Date and the Overcollateralized Loan
Group, the amount, if any, by which (i) the sum of the aggregate principal
balance of the related Mortgage Loans (after giving effect to scheduled payments
of principal due during the related Due Period, to the extent received or
advanced, and unscheduled collections of principal received during the related
Prepayment Period, but prior to reduction for Realized Losses on the related
Mortgage Loans incurred during the related Prepayment Period) and the Group 1
Pre-Funded Amount or the Group 2 Pre-Funded Amount, as applicable, exceeds (ii)
the sum of (x) the aggregate Bond Principal

                                       31
<PAGE>

Balance of the Bonds related to such Loan Group as of such Payment Date (after
giving effect to distributions to be made on such Payment Date) and (y) the
Subordinated Transfer Realized Loss Amount.

      For any Subordinated Transfer Payment Date and the Undercollateralized
Loan Group, the amount, if any, by which (i) the aggregate principal balance of
the related Mortgage Loans (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, but prior to reduction for Realized Losses on the related Mortgage Loans
incurred during the related Prepayment Period) and the Group 1 Pre-Funded Amount
or the Group 2 Pre-Funded Amount, as applicable, exceeds (ii) (x) the aggregate
Bond Principal Balance of the Bonds related to such Loan Group as of such
Payment Date (after giving effect to distributions to be made on such Payment
Date) minus (y) the Subordinated Transfer Realized Loss Amount.

      OVERCOLLATERALIZED LOAN GROUP: For any Subordinated Transfer Payment Date,
the Loan Group which is not the Undercollateralized Loan Group.

      OWNER TRUST ESTATE: The corpus of the Issuer created by the Trust
Agreement which consists of items referred to in Section 3.01 of the Trust
Agreement.

      OWNER TRUSTEE: Wilmington Trust Company and its successors and assigns or
any successor owner trustee appointed pursuant to the terms of the Trust
Agreement.

      OWNER TRUSTEE'S FEE: With respect to any Payment Date the product of (i)
the Owner Trustee's Fee Rate divided by 12 and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the first day of the related Due
Period plus the Group 1 Pre-Funded Amount and Group 2 Pre-Funded Amount.

      OWNER TRUSTEE'S FEE RATE: On each Mortgage Loan, a rate equal to 0.0017%
per annum.

      PAYING AGENT: Any paying agent or co-paying agent appointed pursuant to
Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.

      PAYMENT ACCOUNT: The account established by the Indenture Trustee pursuant
to Section 3.01 of the Indenture. The Payment Account shall be an Eligible
Account.

      PAYMENT DATE: The 25th day of each month, or if such day is not a Business
Day, then the next Business Day.

      PERCENTAGE INTEREST: With respect to any Bond, the percentage obtained by
dividing the Bond Principal Balance of such Bond by the aggregate Bond Principal
Balances of all Bonds of that Class. With respect to any Certificate, the
percentage as stated on the face thereof.

      PERIODIC RATE CAP: With respect to any Group 1 Loan, the maximum rate, if
any, by which the Mortgage Rate on such Mortgage Loan can adjust on any
Adjustment Date, as stated in the related Mortgage Note or Mortgage.

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<PAGE>

      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.

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

      PLAN ASSETS: Assets of a Plan within the meaning of Department of Labor
regulation 29 C.F.R. ss. 2510.3-101.

      POLICY PREMIUM RATE: With respect to any Payment Date, the rate per annum
at which the Premium Amount for the Bond Insurance Policy accrues, as specified
in the Bond Insurance Policy.

      POOL BALANCE: With respect to any date of determination, the aggregate of
the Stated Principal Balances of all Mortgage Loans as of such date.

      PREFERENCE AMOUNT: With respect to the Class 2-A Bonds, any amount
previously distributed to a Class 2-A Bondholder that is recoverable and sought
to be recovered as a voidable preference by a trustee in bankruptcy pursuant to
the United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in
accordance with a final nonappealable order of a court having competent
jurisdiction.

      PREMIUM AMOUNT: The amount of premium due to the Bond Insurer in
accordance with the Bond Insurance Policy.

      PREPAYMENT ASSUMPTION: A Prepayment Assumption of 100% assumes, with
respect to the Mortgage Loans, 30% CPR.

      PREPAYMENT INTEREST SHORTFALL: As to any Payment Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that was the
subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of interest accrued during the related
Prepayment Period at the Net Mortgage Rate on the Stated Principal Balance of
such Mortgage Loan over the sum of the amount of interest (less interest at the
related Expense Fee Rate) paid by the Mortgagor for such Prepayment Period to
the date of such Principal Prepayment in Full and any Advances made by the
Master Servicer pursuant to Section 4.04 of the Servicing Agreement or (b) a
partial Principal Prepayment during the related Prepayment Period, an amount
equal to the interest at the Mortgage Rate (less the Subservicing Fee Rate)
during the related Prepayment Period on the amount of such partial Principal
Prepayment.

      PREPAYMENT PERIOD: With respect to each Mortgage Loan and any Payment
Date, the prior calendar month.

                                       33
<PAGE>

      PRIMARY INSURANCE POLICY: Each primary policy of mortgage guaranty
insurance issued by a Qualified Insurer or any replacement policy therefor,
including the Radian Lender-Paid PMI Policies.

      PRINCIPAL DISTRIBUTION AMOUNT: The Group 1 Principal Distribution Amount
or Group 2 Principal Distribution Amount, as applicable.

      PRINCIPAL PREPAYMENT: Any payment of principal or other recovery on a
Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds
or Insurance Proceeds, which is received in advance of its scheduled Due Date
and is not accompanied by an amount as to interest representing scheduled
interest on such payment due on any date or dates in any month or months
subsequent to the month of prepayment.

      PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment made by a Mortgagor
of the entire principal balance of a Mortgage Loan.

      PRINCIPAL REMITTANCE AMOUNT: With respect to any Payment Date and each
Loan Group, the sum of the following:

                  (i) the principal portion of each previously undistributed
      Monthly Payment due after the Cut-off Date received on or prior to the
      related Determination Date or advanced prior to such Payment Date (other
      than Monthly Payments due after the related Due Period, which shall be
      treated as if received during the Due Period they were due) on each
      Outstanding Mortgage Loan;

                  (ii) the principal portion of all proceeds of any Mortgage
      Loan repurchased during the related Prepayment Period (or deemed to have
      been so repurchased in accordance with the Servicing Agreement) pursuant
      to the Servicing Agreement and the amount of any shortfall deposited in
      the Collection Account in connection with the substitution of a Deleted
      Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement during the
      related Collection Period;

                  (iii) the principal portion of all other unscheduled
      collections received during the related Prepayment Period (including,
      without limitation, Principal Prepayments, Insurance Proceeds, Liquidation
      Proceeds and REO Proceeds) to the extent applied by the Master Servicer as
      recoveries of principal of the related Mortgage Loan pursuant to the
      Servicing Agreement; and

                  (iv) with respect to the Group 2 Loans, any portion of any
      Class 2-A Insured Amount for such Payment Date representing an Insured
      Undercollateralization Amount allocable to the Class 2-A Bonds;

provided, however, that on any Subordinated Transfer Payment Date, the Principal
Remittance Amount for the Undercollateralized Loan Group shall be increased, and
the Principal Remittance Amount for the Overcollateralized Loan Group shall be
reduced, by the Subordinated Payment Transfer Fraction of the amounts determined
pursuant to clauses (1) through (3) above for the Overcollateralized Loan Group.

                                       34
<PAGE>

      PROCEEDING: Any suit in equity, action at law or other judicial or
administrative proceeding.

      PROSPECTUS: The Prospectus Supplement, dated July 27, 2004, together with
the attached Prospectus, dated March 29, 2004.

      PURCHASE PRICE: The meaning specified in Section 2.2(a) of the Mortgage
Loan Purchase Agreement.

      PURCHASER: IMH Assets Corp., a California corporation, and its successors
and assigns.

      QUALIFIED INSURER: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as an insurer
by the Master Servicer and as a Fannie Mae-approved mortgage insurer.

      RADIAN: Radian Guaranty, Inc., or its successors or assigns.

      RADIAN LENDER-PAID PMI POLICY: A lender-paid primary mortgage insurance
policy issued by Radian in accordance with a March 29, 2002 letter between the
Seller and Radian.

      RADIAN PMI INSURED LOANS: The Mortgage Loans included in the Trust Fund
covered by a Radian Lender-Paid PMI Policy, as indicated on the Mortgage Loan
Schedule.

      RADIAN PMI POLICY FEE: With respect to each Radian PMI Insured Loan and
any Payment Date, the product of (i) the Radian PMI Rate divided by 12 and (ii)
the Stated Principal Balance of such Mortgage Loan as of the first day of the
related Due Period.

      RADIAN PMI RATE: With respect to any Mortgage Loan covered by the Radian
Lender-Paid PMI Policy, the rate per annum at which the premium with respect to
such policy accrues as indicated in the Mortgage Loan Schedule.

      RATING AGENCY: Any nationally recognized statistical rating organization,
or its successor, that rated the Bonds at the request of the Depositor at the
time of the initial issuance of the Bonds. Initially, Standard & Poor's or
Moody's. If such organization or a successor is no longer in existence, "Rating
Agency" with respect to the Class A Bonds shall be such nationally recognized
statistical rating organization, or other comparable Person, designated by the
Bond Insurer so long as no Bond Insurer Default exists, notice of which
designation shall be given to the Indenture Trustee. References herein to the
highest short term unsecured rating category of a Rating Agency shall mean A-1
or better in the case of Standard & Poor's and P-1 or better in the case of
Moody's and in the case of any other Rating Agency shall mean such equivalent
ratings. References herein to the highest long-term rating category of a Rating
Agency shall mean "AAA" in the case of Standard & Poor's and "Aaa" in the case
of Moody's and in the case of any other Rating Agency, such equivalent rating.

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<PAGE>

      REALIZED LOSS: With respect to each Mortgage Loan (or REO Property) as to
which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan (or
REO Property) as of the date of Cash Liquidation or REO Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the Net Mortgage Rate from the
Due Date as to which interest was last paid or advanced to Bondholders up to the
last day of the month in which the Cash Liquidation (or REO Disposition)
occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property)
outstanding during each Due Period that such interest was not paid or advanced,
minus (iii) the proceeds, if any, received during the month in which such Cash
Liquidation (or REO Disposition) occurred, to the extent applied as recoveries
of interest at the Net Mortgage Rate and to principal of the Mortgage Loan, net
of the portion thereof reimbursable to the Master Servicer or any Subservicer
with respect to related Advances or expenses as to which the Master Servicer or
any Subservicer is entitled to reimbursement thereunder but which have not been
previously reimbursed. 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 object of a
Debt Service Reduction, the amount of such Debt Service Reduction.

      RECORD DATE: With respect to the Grantor Trust Certificates and any
Book-Entry Bonds and any Payment Date, the close of business on the Business Day
immediately preceding such Payment Date. With respect to any Bonds that are not
Book-Entry Bonds, the close of business on the last Business Day of the calendar
month preceding such Payment Date.

      REFERENCE BANKS: Any leading banks engaged in transactions in Eurodollar
deposits in the international Eurocurrency market (i) with an established place
of business in London, (ii) whose quotations appear on the Telerate Screen Page
3750 on the Interest Determination Date in question, (iii) which have been
designated as such by the Indenture Trustee after consultation with the Master
Servicer and the Bond Insurer, and (iv) which are not Affiliates of the
Depositor or the Seller.

      REGISTERED HOLDER: The Person in whose name a Bond is registered in the
Bond Register on the applicable Record Date.

      RELATED DOCUMENTS: With respect to each Mortgage Loan, the documents
specified in Section 2.1(b) of (i) the Mortgage Loan Purchase Agreement (with
respect to the Initial Mortgage Loans) and (ii) the Group 1 or Group 2
Subsequent Mortgage Loan Purchase Agreement (with respect to the Group 1 and
Group 2 Subsequent Mortgage Loans) and any documents required to be added to
such documents pursuant to the Mortgage Loan Purchase Agreement, the Group 1 and
Group 2 Subsequent Mortgage Loan Purchase Agreement, the Trust Agreement,
Indenture or the Servicing Agreement.

      RELIEF ACT: The Servicemembers Civil Relief Act, as amended.

      RELIEF ACT SHORTFALL: As to any Payment Date and any Mortgage Loan (other
than a Mortgage Loan relating to an REO Property), any shortfalls relating to
the Relief Act or similar legislation or regulations.

                                       36
<PAGE>

      REMITTANCE REPORT: The report prepared by the Master Servicer pursuant to
Section 4.01 of the Servicing Agreement.

      REO ACQUISITION: The acquisition by the Master Servicer on behalf of the
Indenture Trustee for the benefit of the Bondholders of any REO Property
pursuant to Section 3.13 of the Servicing Agreement.

      REO DISPOSITION: As to any REO Property, a determination by the Master
Servicer that it has received substantially all Insurance Proceeds, Liquidation
Proceeds, REO Proceeds and other payments and recoveries (including proceeds of
a final sale) which the Master Servicer expects to be finally recoverable from
the sale or other disposition of the REO Property.

      REO IMPUTED INTEREST: As to any REO Property, for any period, an amount
equivalent to interest (at the Net Mortgage Rate that would have been applicable
to the related Mortgage Loan had it been Outstanding) on the unpaid principal
balance of the Mortgage Loan as of the date of acquisition thereof for such
period as such balance is reduced pursuant to Section 3.13 of the Servicing
Agreement by any income from the REO Property treated as a recovery of
principal.

      REO PROCEEDS: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property) which proceeds are required to be deposited into the
Collection Account only upon the related REO Disposition.

      REO PROPERTY: A Mortgaged Property that is acquired by the Issuer by
foreclosure or by deed in lieu of foreclosure.

      REPURCHASE EVENT: With respect to any Mortgage Loan, either (i) a
discovery that, as of the Closing Date, the related Mortgage was not a valid
first lien on the related Mortgaged Property, or (ii) with respect to any
Mortgage Loan as to which the Seller delivers an affidavit certifying that the
original Mortgage Note has been lost or destroyed, a subsequent default on such
Mortgage Loan if the enforcement thereof or of the related Mortgage is
materially and adversely affected by the absence of such original Mortgage Note.

      REPURCHASE PRICE: With respect to any Mortgage Loan required to be
repurchased on any date pursuant to the Mortgage Loan Purchase Agreement or
purchased by the Master Servicer pursuant to the Servicing Agreement, an amount
equal to the sum, without duplication, of (i) 100% of the Stated Principal
Balance thereof (without reduction for any amounts charged off) and (ii) unpaid
accrued interest at the Mortgage Rate on the outstanding principal balance
thereof from the Due Date to which interest was last paid by the Mortgagor to
the first day of the month following the month of purchase plus (iii) the amount
of unreimbursed Advances or unreimbursed Servicing Advances made with respect to
such Mortgage Loan plus (iv) any other amounts owed to the Master Servicer or
any Subservicer pursuant to Section 3.07 of the Servicing Agreement and not
included in clause (iii) of this definition plus (v) any costs and damages
incurred by the trust in connection with any violation by such loan of any
predatory-lending law.

                                       37
<PAGE>

      RESERVE INTEREST RATE: With respect to any Interest Determination Date,
the rate per annum that the Indenture Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
0.0625%) of the one-month United States dollar lending rates which New York City
banks selected by the Indenture Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Indenture Trustee can
determine no such arithmetic mean, the lowest one-month United States dollar
lending rate which New York City banks selected by the Indenture Trustee are
quoting on such Interest Determination Date to leading European banks.

      RESPONSIBLE OFFICER: With respect to the Indenture Trustee, any officer of
the Indenture Trustee with direct responsibility for the administration of the
Indenture and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

      SECURITIES ACT: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

      SECURITY: Any of the Certificates or Bonds.

      SECURITYHOLDER or HOLDER: Any Bondholder or a Certificateholder.

      SECURITY INSTRUMENT: A written instrument creating a valid first lien or
second lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.

      SELLER: Impac Mortgage Holdings, Inc., a Maryland corporation, and its
successors and assigns.

      SERVICING ACCOUNT: The separate trust account created and maintained by
the Master Servicer or each Subservicer with respect to the Mortgage Loans or
REO Property, which shall be an Eligible Account, for collection of taxes,
assessments, insurance premiums and comparable items as described in Section
3.08 of the Servicing Agreement.

      SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket"costs and expenses incurred in connection with a default, delinquency or
other unanticipated event in the performance by the Master Servicer or any
Subservicer of its servicing obligations, including, without duplication, 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 any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered on the MERS(R) System, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Sections 3.10, 3.11, 3.13 of the Servicing Agreement.

      SERVICING AGREEMENT: The Servicing Agreement dated as of July 29, 2004,
among the Master Servicer, the Issuer and the Indenture Trustee.

                                       38
<PAGE>

      SERVICING CERTIFICATE: A certificate completed and executed by a Servicing
Officer on behalf of the Master Servicer in accordance with Section 4.01 of the
Servicing Agreement.

      SERVICING DEFAULT: The meaning assigned in Section 6.01 of the Servicing
Agreement.

      SERVICING FEE: The sum of the Master Servicing Fee and the related
Subservicing Fee.

      SERVICING FEE RATE: The sum of the Master Servicing Fee Rate and the
related Subservicing Fee Rate.

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

      SPECIAL CERTIFICATE CAP CONTRACT: The Confirmation together with the
associated ISDA Master Agreement, delivered to the Indenture Trustee on the
Closing Date and attached to the Indenture as Exhibit F, for which amounts
payable shall be distributed in accordance with Section 3.05(n) of the
Indenture.

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

      STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related REO
Property as of any date of determination, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut- off Date, after application of all
scheduled Monthly Payments due on or before such date, whether or not received,
minus (ii) the sum of (a) the principal portion of the Monthly Payments due with
respect to such Mortgage Loan or REO Property during each Due Period ending
prior to the most recent Payment Date which were received or with respect to
which an Advance was made, (b) all Principal Prepayments with respect to such
Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation Proceeds
and REO Proceeds to the extent applied by the Master Servicer as recoveries of
principal in accordance with Section 3.13 of the Servicing Agreement with
respect to such Mortgage Loan or REO Property, which were distributed pursuant
to Section 3.05 of the Indenture on any previous Payment Date, and (c) the
principal portion of any Realized Loss with respect thereto allocated pursuant
to Section 3.31 of the Indenture for any previous Payment Date.

      STATUTORY TRUST STATUTE: Chapter 38 of Title 12 of the Delaware Code, 12
DEL. Code ss.ss.3801 ET SEQ., as the same may be amended from time to time.

      STEP-UP DATE: The first Payment Date following the earlier of (i) the
first Payment Date for which the Issuer can cause the redemption of the Bonds
pursuant to Section 8.07 of the Indenture and (ii) the Payment Date in August
2014.

       SUBORDINATED PAYMENT TRANSFER FRACTION: With respect to any Subordinated
Transfer Payment Date, a fraction equal to (x) any Subordinated Transfer
Realized Loss Amount for such Payment Date, divided by (y) the sum of the
aggregate Stated Principal Balance of the Mortgage

                                       39
<PAGE>

Loans in the Overcollateralized Loan Group as of the beginning of the related
Due Period and the Group 1 Pre-Funded Amount or Group 2 Pre-Funded Amount, as
applicable.

      SUBORDINATED TRANSFER AMOUNT: With respect to any Subordinated Transfer
Payment Date, the principal portion of any amount paid from the
Overcollateralized Loan Group to the Undercollateralized Loan Group.

      SUBORDINATED TRANSFER PAYMENT DATE: Any Payment Date on which a
Subordinated Transfer Realized Loss Amount exists for either loan group.

      SUBORDINATED TRANSFER REALIZED LOSS AMOUNT: For any Payment Date, the
amount of any Realized Loss on a mortgage loan in a Loan Group which has been
allocated on a preceding Payment Date either (a) to the non-related
Overcollateralization Amount or (b) to the non-related Underlying Class M Bonds,
to the extent such Realized Loss has not been reimbursed by related or
non-related Net Monthly Excess Cashflow or by a Subordinated Transfer Amount or
otherwise by an offsetting reduction in the Overcollateralized Amount or in the
Bond Principal Balance of the Bonds of the Undercollateralized Loan Group.

      SUBSEQUENT CUT-OFF DATE: With respect to any Group 1 Subsequent Mortgage
Loan, the date, as designated by the Company, that is the later of (i) the first
day of the month in which the related Subsequent Transfer Date occurs and (ii)
the origination date of such Group 1 Subsequent Mortgage Loan, as the cut-off
date with respect to the related Group 1 Subsequent Mortgage Loan. With respect
to any Group 2 Subsequent Mortgage Loan, the date, as designated by the Company,
that is the later of (i) the first day of the month in which the related
Subsequent Transfer Date occurs and (ii) the origination date of such Group 2
Subsequent Mortgage Loan, as the cut-off date with respect to the related Group
2 Subsequent Mortgage Loan.

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

      SUBSEQUENT TRANSFER DATE: With respect to any Group 1 Subsequent Mortgage
Loan and Group 2 Subsequent Mortgage Loan, the applicable date upon which such
Mortgage Loan was purchased from the Seller with amounts on deposit in the
related Pre-Funding Account.

      SUBSERVICER: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement as a Subservicer and acceptable to the Bond Insurer,
including the Initial Subservicers.

      SUBSERVICING ACCOUNT: An Eligible Account established or maintained by a
Subservicer as provided for in Section 3.06(e) of the Servicing Agreement.

      SUBSERVICING AGREEMENT: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02 of the Servicing Agreement.

      SUBSERVICING FEE: With respect to each Mortgage Loan and any Payment Date,
the fee payable monthly to the subservicer in respect of servicing compensation
that accrues at an annual

                                       40
<PAGE>

rate equal to the Subservicing Fee Rate multiplied by the Stated Principal
Balance of such Mortgage Loan as of the related Due Date in the related Due
Period.

      SUBSERVICING FEE RATE: On each Mortgage Loan, a rate equal to 0.375% per
annum.

      SUBSTITUTION ADJUSTMENT AMOUNT: With respect to any Eligible Substitute
Mortgage Loan, the amount as defined in Section 2.03 of the Servicing Agreement.

      TELERATE SCREEN PAGE 3750: The display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks).

      TREASURY REGULATIONS: Regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

      TRUST: The Impac CMB Trust Series 2004-7 to be created pursuant to the
Trust Agreement.

      TRUST AGREEMENT: The Amended and Restated Trust Agreement dated as of July
29, 2004, among the Owner Trustee, the Depositor and Deutsche Bank National
Trust Company, as Certificate Registrar and Certificate Paying Agent, relating
to the Trust.

      TRUST ESTATE: The meaning specified in the Granting Clause of the
Indenture.

      TRUST INDENTURE ACT OR TIA: The Trust Indenture Act of 1939, as amended
from time to time, as in effect on any relevant date.

      UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.

      UNDERCOLLATERALIZED AMOUNT: With respect to any Payment Date, other than a
Subordinated Transfer Payment Date, and either Loan Group, the excess, if any,
of (x) the aggregate Bond Principal Balance of the related Bonds (after giving
effect to distributions to such Bonds of the related Basic Principal
Distribution Amount on such Payment Date), over (y) the sum of the aggregate
Stated Principal Balance of the related Mortgage Loans (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period, and after reduction for Realized Losses on the
related Mortgage Loans incurred during the related Prepayment Period) and the
Group 1 Pre-Funded Amount or Group 2 Pre-Funded Amount, as applicable.

      For any Subordinated Transfer Payment Date and the Overcollateralized Loan
Group, the amount, if any, by which (i) the sum of (x) the aggregate Bond
Principal Balance of the related Bonds (after giving effect to distributions to
such Bonds of the related Basic Principal Distribution Amount on such Payment
Date) and (y) the Subordinated Transfer Realized Loss Amount, exceeds (ii) the
sum of the aggregate Stated Principal Balance of the related Mortgage Loans
(after giving

                                       41
<PAGE>

effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period, and after reduction for Realized
Losses on the related Mortgage Loans incurred during the related Prepayment
Period) and the Group 1 Pre-Funded Amount or Group 2 Pre-Funded Amount, as
applicable.

      For any Subordinated Transfer Payment Date and the Undercollateralized
Loan Group, the amount, if any, by which (i)(x) the aggregate Bond Principal
Balance of the related Bonds (after giving effect to distributions to such Bonds
of the related Basic Principal Distribution Amount on such Payment Date) minus
(y) the Subordinated Transfer Realized Loss Amount, exceeds (ii) the sum of the
aggregate Stated Principal Balance of the related Mortgage Loans (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period, and after reduction for Realized
Losses on the related Mortgage Loans incurred during the related Prepayment
Period) and the Group 1 Pre-Funded Amount or Group 2 Pre-Funded Amount, as
applicable.

      UNDERCOLLATERALIZED LOAN GROUP: With respect to any Payment Date, a Loan
Group which benefits from the payment of a Subordinated Transfer Realized Loss
Amount.

      UNDERLYING CLASS M BONDS: Any of the Class M-1-1, Class M-1-2, Class
M-2-1, Class M-2-2, Class M-3-1, Class M-3-2, Class M-4-1, Class M-4-2, Class
M-5-1 or Class M-5-2 Bonds.

      UNDERWRITERS: Countrywide Securities Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Bear, Stearns & Co. Inc.

      UNINSURED CAUSE: Any cause of damage to property subject to a Mortgage
that the complete restoration of such property is not fully reimbursable by the
hazard insurance policies.

      UNPAID INTEREST SHORTFALL: For each Class of Bonds and any Payment Date,
such Bonds' pro rata share, based on the amount of Accrued Bond Interest
otherwise payable on such Bond on such Payment Date, of (a) any Prepayment
Interest Shortfalls, to the extent not covered by Compensating Interest, and (b)
any Relief Act Shortfalls, plus interest on the amount of previously allocated
Unpaid Interest Shortfall on such Class of Bonds which remains unreimbursed, at
the Bond Interest Rate for such Class for the related Accrual Period.

      USA PATRIOT ACT: The USA Patriot Act of 2001, as amended.

                                       42CWABS, 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 July 1, 2004

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

                 CWABS ASSET-BACKED CERTIFICATES TRUST 2004-ECC2

                                     Issuer

                   ASSET-BACKED CERTIFICATES, SERIES 2004-ECC2

<PAGE>

<TABLE>
<CAPTION>
                                                 Table of Contents

                                                     ARTICLE I

                                                    DEFINITIONS

<S>                                                                                                              <C>
   Section 1.01       Defined Terms...............................................................................5

                                                     ARTICLE II

                            CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

   Section 2.01       Conveyance of Mortgage Loans...............................................................68
   Section 2.02       Acceptance of the Mortgage Loans...........................................................75
   Section 2.03       Representations, Warranties and Covenants of the Master Servicer and the Seller............78
   Section 2.04       Representations and Warranties of the Depositor............................................91
   Section 2.05       Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases............93
   Section 2.06       Authentication and Delivery of Certificates................................................94
   Section 2.07       Covenants of the Master Servicer...........................................................94

                                                    ARTICLE III

                                   ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

   Section 3.01       Master Servicer to Service Mortgage Loans..................................................95
   Section 3.02       Subservicing; Enforcement of the Obligations of Master Servicer............................96
   Section 3.03       Rights of the Depositor, the Seller and the Trustee in Respect of the Master Servicer......97
   Section 3.04       Trustee to Act as Master Servicer..........................................................97
   Section 3.05       Collection of Mortgage Loan Payments; Certificate Account; Distribution Account;
                      Pre-Funding Account; Seller Shortfall Interest Requirement.................................97
   Section 3.06       Collection of Taxes, Assessments and Similar Items; Escrow Accounts.......................101
   Section 3.07       Access to Certain Documentation and Information Regarding the Mortgage Loans..............102
   Section 3.08       Permitted Withdrawals from the Certificate Account, Distribution Account and the Carryover
                      Reserve Fund..............................................................................102
   Section 3.09       [Reserved.]...............................................................................104
   Section 3.10       Maintenance of Hazard Insurance...........................................................104
   Section 3.11       Enforcement of Due-On-Sale Clauses; Assumption Agreements.................................105
   Section 3.12       Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and Realized
                      Losses; Repurchase of Certain Mortgage Loans..............................................106
   Section 3.13       Trustee to Cooperate; Release of Mortgage Files...........................................109
   Section 3.14       Documents, Records and Funds in Possession of Master Servicer to be Held for the Trustee..110
   Section 3.15       Servicing Compensation....................................................................111
   Section 3.16       Access to Certain Documentation...........................................................111

                                                         i

<PAGE>

   Section 3.17       Annual Statement as to Compliance.........................................................112
   Section 3.18       Annual Independent Public Accountants' Servicing Statement; Financial Statements..........112
   Section 3.19       The Corridor Contracts....................................................................112
   Section 3.20       Prepayment Charges........................................................................113

                                                     ARTICLE IV

                                 DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER

   Section 4.01       Advances..................................................................................115
   Section 4.02       Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls.....116
   Section 4.03       [Reserved]................................................................................116
   Section 4.04       Distributions.............................................................................116
   Section 4.05       Monthly Statements to Certificateholders..................................................123
   Section 4.06       [Reserved]................................................................................126
   Section 4.07       [Reserved]................................................................................126
   Section 4.08       Carryover Reserve Fund....................................................................126
   Section 4.09       Distributions on the REMIC I Regular Interests............................................127
   Section 4.10       The Class P Certificates..................................................................133
   Section 4.11       Excess Net WAC Rate Reserve Fund..........................................................133

                                                     ARTICLE V

                                                  THE CERTIFICATES

   Section 5.01       The Certificates..........................................................................135
   Section 5.02       Certificate Register; Registration of Transfer and Exchange of Certificates...............136
   Section 5.03       Mutilated, Destroyed, Lost or Stolen Certificates.........................................140
   Section 5.04       Persons Deemed Owners.....................................................................140
   Section 5.05       Access to List of Certificateholders' Names and Addresses.................................140
   Section 5.06       Book-Entry Certificates...................................................................141
   Section 5.07       Notices to Depository.....................................................................142
   Section 5.08       Definitive Certificates...................................................................142
   Section 5.09       Maintenance of Office or Agency...........................................................143

                                                     ARTICLE VI

                                 THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER

   Section 6.01       Respective Liabilities of the Depositor, the Master Servicer and the Seller...............144
   Section 6.02       Merger or Consolidation of the Depositor, the Master Servicer or the Seller...............144
   Section 6.03       Limitation on Liability of the Depositor, the Seller, the Master Servicer and Others......144
   Section 6.04       Limitation on Resignation of Master Servicer..............................................145
   Section 6.05       Errors and Omissions Insurance; Fidelity Bonds............................................145

                                                        ii

<PAGE>

                                                    ARTICLE VII

                                      DEFAULT; TERMINATION OF MASTER SERVICER

   Section 7.01       Events of Default.........................................................................147
   Section 7.02       Trustee to Act; Appointment of Successor..................................................148
   Section 7.03       Notification to Certificateholders........................................................150

                                                    ARTICLE VIII

                                               CONCERNING THE TRUSTEE

   Section 8.01       Duties of Trustee.........................................................................151
   Section 8.02       Certain Matters Affecting the Trustee.....................................................152
   Section 8.03       Trustee Not Liable for Mortgage Loans.....................................................153
   Section 8.04       Trustee May Own Certificates..............................................................154
   Section 8.05       Master Servicer to Pay Trustee's Fees and Expenses........................................154
   Section 8.06       Eligibility Requirements for Trustee......................................................154
   Section 8.07       Resignation and Removal of Trustee........................................................155
   Section 8.08       Successor Trustee.........................................................................156
   Section 8.09       Merger or Consolidation of Trustee........................................................156
   Section 8.10       Appointment of Co-Trustee or Separate Trustee.............................................156
   Section 8.11       Tax Matters...............................................................................158

                                                     ARTICLE IX

                                                    TERMINATION

   Section 9.01       Termination upon Liquidation or Repurchase of all Mortgage Loans..........................161
   Section 9.02       Final Distribution on the Certificates....................................................161
   Section 9.03       Additional Termination Requirements.......................................................163

                                                     ARTICLE X

                                              MISCELLANEOUS PROVISIONS

   Section 10.01      Amendment.................................................................................164
   Section 10.02      Recordation of Agreement; Counterparts....................................................165
   Section 10.03      Governing Law.............................................................................166
   Section 10.04      Intention of Parties......................................................................166
   Section 10.05      Notices...................................................................................166
   Section 10.06      Severability of Provisions................................................................167
   Section 10.07      Assignment................................................................................168
   Section 10.08      Limitation on Rights of Certificateholders................................................168
   Section 10.09      Inspection and Audit Rights...............................................................169
   Section 10.10      Certificates Nonassessable and Fully Paid.................................................169

                                                        iii

<PAGE>

EXHIBITS

EXHIBIT A-1                Form of Class 1-A Certificate
EXHIBIT A-2                Form of Class 2-A Certificate
EXHIBIT A-3                Form of Class A-IO Certificate
EXHIBIT A-4                Form of Class M-1 Certificate
EXHIBIT A-5                Form of Class M-2 Certificate
EXHIBIT A-6                Form of Class M-3 Certificate
EXHIBIT A-7                Form of Class M-4 Certificate
EXHIBIT A-8                Form of Class M-5 Certificate
EXHIBIT A-9                Form of Class M-6 Certificate
EXHIBIT A-10               Form of Class M-7 Certificate
EXHIBIT A-11               Form of Class M-8 Certificate
EXHIBIT A-12               Form of Class B Certificate
EXHIBIT B                  Form of Class C Certificate
EXHIBIT C                  Form of Class P Certificate
EXHIBIT D                  Form of Class A-R Certificate
EXHIBIT E                  Form of Tax Matters Person Certificate
EXHIBIT F                  Mortgage Loan Schedules
EXHIBIT F-1                List of Mortgage Loans
EXHIBIT F-2                Mortgage Loans for which All or a Portion of a Related Mortgage
                           File is not Delivered to the Trustee on or prior to the Closing Date
EXHIBIT G                  Forms of Certification of Trustee
EXHIBIT G-1                Form of Initial Certification of Trustee
EXHIBIT G-2                Form of Interim Certification of Trustee
EXHIBIT G-3                Form of Delay Delivery Certification
EXHIBIT G-4                [Reserved]
EXHIBIT H                  Form of Final Certification of Trustee
EXHIBIT I                  Transfer Affidavit
EXHIBIT J-1                Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2                Form of Transferor Certificate for Private Certificates
EXHIBIT K                  Form of Investment Letter (Non-Rule 144A)
EXHIBIT L                  Form of Rule 144A Letter
EXHIBIT M                  Request for Release (for Trustee)
EXHIBIT N                  Request for Release (for Mortgage Loans Paid in Full,
                           Repurchased or Replaced)
EXHIBIT O                  Copy of Depositary Agreement
EXHIBIT P                  Form of Mortgage Note and Mortgage
EXHIBIT Q                  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
</TABLE>

                                                        iv

<PAGE>

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

                             PRELIMINARY STATEMENT:

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

                                     REMIC I

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (exclusive of the Corridor Contracts, the Carryover Reserve Fund
and the Excess Net WAC Rate 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       Uncertificated Principal    Latest Possible Maturity
    Designation             Pass-Through Rate                   Balance                      Date
    -----------             -----------------                   -------                      ----
<S>                                <C>                    <C>                                     <C>
        LT-1                       (1)                    $315,886,479.36                 January 2035
       LT-1PF                      (1)                    $102,956,895.61                 January 2035
        LT-2                       (1)                    $ 97,115,801.72                 January 2035
       LT-2PF                      (1)                    $ 34,040,823.31                 January 2035
        LT-P                       (1)                    $        100.00                 January 2035
        LT-R                       (1)                    $        100.00                 January 2035
</TABLE>

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

<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       Uncertificated Principal    Latest Possible Maturity
    Designation             Pass-Through Rate                   Balance                      Date
    -----------             -----------------                   -------                      ----
<S>                                <C>                     <C>                                  <C>
        LT-1                       (1)                     $151,570,647.97              January 2035
        LT-2                       (1)                     $ 48,429,352.03              January 2035
       LT-IO1                      (1)                     $267,272,727.00              January 2035
       LT-IO2                      (1)                     $ 82,727,273.00              January 2035
        LT-P                       (1)                     $        100.00              January 2035
        LT-R                       (1)                     $        100.00              January 2035
</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 II 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,
remittance rate (the "Uncertificated REMIC III Pass-Through Rate") and initial
Uncertificated Principal Balance for each of the "regular interests" in REMIC
III (the "REMIC III 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 III Regular Interest shall be the 363th
Distribution Date. None of the REMIC III Regular Interests will be certificated.

<TABLE>
<CAPTION>
                         Uncertificated REMIC III        Uncertificated Principal    Latest Possible Maturity
    Designation              Pass-Through Rate                   Balance                       Date
    -----------              -----------------                   -------                       ----
<S>                                 <C>                    <C>                             <C>
       LT-AA                        (1)                    $269,500,000.00                 January 2035
       LT-1A                        (1)                    $  1,753,500.00                 January 2035
       LT-2A                        (1)                    $    542,750.00                 January 2035
       LT-M1                        (1)                    $     88,000.00                 January 2035
       LT-M2                        (1)                    $     86,625.00                 January 2035
       LT-M3                        (1)                    $     49,500.00                 January 2035
       LT-M4                        (1)                    $     49,500.00                 January 2035
       LT-M5                        (1)                    $     44,000.00                 January 2035
       LT-M6                        (1)                    $     38,500.00                 January 2035
       LT-M7                        (1)                    $     39,875.00                 January 2035
       LT-M8                        (1)                    $     30,250.00                 January 2035
        LT-B                        (1)                    $     27,500.00                 January 2035
       LT-ZZ                        (1)                    $  2,750,000.00                 January 2035
       LT-IO1                       (1)                           (2)                      January 2035
       LT-IO2                       (1)                           (2)                      January 2035
        LT-P                        (1)                    $        100.00                 January 2035
        LT-R                        (1)                    $        100.00                 January 2035
      LT-1SUB                       (1)                    $      6,814.36                 January 2035
      LT-1GRP                       (1)                    $     41,884.36                 January 2035
      LT-2SUB                       (1)                    $      2,260.66                 January 2035
      LT-2GRP                       (1)                    $     13,115.66                 January 2035
       LT-XX                        (1)                    $274,935,924.96                 January 2035
</TABLE>

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

(2)      REMIC III Regular Interest LT-IO1 and REMIC III Regular Interest LT-IO2
         will not have Uncertificated Principal Balances, but will accrue
         interest on their respective Uncertificated Notional Amounts.

                                       3
<PAGE>

                                    REMIC IV

         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 IV. The Class R-IV Interest will represent the sole class of "residual
interests" in REMIC IV for purposes of the REMIC Provisions under federal income
tax law. The following table irrevocably sets forth the designation,
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 IV. 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 IV 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)                      $ 350,700,000.00                 January 2035
     Class 2-A                   (1)                      $ 108,550,000.00                 January 2035
     Class AIO                   (1)                      $ 350,000,000.00(2)                November 2004
     Class M-1                   (1)                      $  17,600,000.00                December 2034
     Class M-2                   (1)                      $  17,325,000.00                December 2034
     Class M-3                   (1)                      $   9,900,000.00                November 2034
     Class M-4                   (1)                      $   9,900,000.00                November 2034
     Class M-5                   (1)                      $   8,800,000.00                 October 2034
     Class M-6                   (1)                      $   7,700,000.00                September 2034
     Class M-7                   (1)                      $   7,975,000.00                 August 2034
     Class M-8                   (1)                      $   6,050,000.00                  June 2034
      Class B                    (1)                      $   5,500,000.00                  April 2034
      Class C                    (3)                      $           0.00                 January 2035
      Class P                    (4)                      $         100.00                 January 2035
</TABLE>
-------------------

(1)      Interest will accrue at a rate equal to the Pass-Through Rate, as
         defined herein.

(2)      Notional amount

(3)      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.

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

                                       4
<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-IO, Class A-R, Class P and Class C
Certificates), the period commencing on the from and including Distribution Date
(or, in the case of the first Distribution Date, from and including the Closing
Date) and to and including on the day immediately preceding the current
Distribution Date. With respect to any Distribution Date and the Class A-IO
Certificates and Class C Certificates, the calendar month preceding the month in
which such Distribution Date occurs. All calculations of interest on the
Certificates (other than the Class A-IO, Class A-R, Class P and Class C
Certificates) will be made on the basis of the actual number of days elapsed in
the related Accrual Period and on a 360-day year. All calculations of interest
on the Class A-IO Certificates and Class C Certificates will be made on the
basis of a 360-day year consisting of twelve 30-day months. The Class A-R
Certificates and Class P Certificates will not accrue any interest and therefore
have no Accrual Period.

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

         Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
less the Expense Fee Rate.

         Adjusted Net WAC Rate: With respect to the Class 1-A Certificates and
any Distribution Date, a per annum rate equal to (A) the weighted average of the
Adjusted Net Mortgage Rates of the Group 1 Mortgage Loans weighted on the basis
of the outstanding Stated Principal Balances of the Group 1 Mortgage Loans as of
the first day of the month preceding the month of such Distribution Date less
(B) the Uncertificated REMIC III Pass-Through Rate for REMIC III Regular
Interest LT-IO1 for such Distribution Date multiplied by a fraction, the
numerator of which is the Notional Amount for REMIC III Regular Interest LT-IO1
immediately prior to such Distribution Date and the denominator of which is the
aggregate outstanding Stated Principal Balance of the Group 1 Mortgage Loans as
of the first day of the month preceding the month of such Distribution Date. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of the Uncertificated REMIC III Pass-Through
Rate of the REMIC III Regular Interest for which such Class of Certificates is
the Corresponding Certificate.

                                       5
<PAGE>

         With respect to the Class 2-A Certificates and any Distribution Date, a
per annum rate equal to (A) the weighted average of the Adjusted Net Mortgage
Rates of the Group 1 Mortgage Loans weighted on the basis of the outstanding
Stated Principal Balances of the Group 2 Mortgage Loans as of the first day of
the month preceding the month of such Distribution Date less (B) the
Uncertificated REMIC III Pass-Through Rate for REMIC III Regular Interest LT-IO2
for such Distribution Date multiplied by a fraction, the numerator of which is
the Notional Amount for REMIC III Regular Interest LT-IO2 immediately prior to
such Distribution Date and the denominator of which is the aggregate outstanding
Stated Principal Balance of the Group 2 Mortgage Loans as of the first day of
the month preceding the month of such Distribution Date. For federal income tax
purposes, the economic equivalent of such rate shall be expressed as the
weighted average of the Uncertificated REMIC III Pass-Through Rate of the REMIC
III Regular Interest for which such Class of Certificates is the Corresponding
Certificate.

         With respect to the Subordinate Certificates and any Distribution Date,
a per annum rate equal to the product of (x)(A) the weighted average of the
Adjusted Net Mortgage Rates of the Mortgage Loans weighted on the basis of the
outstanding Stated Principal Balances of the Mortgage Loans as of the first day
of the month preceding the month of such Distribution Date less (B) the
Uncertificated REMIC III Pass-Through Rate for REMIC III Regular Interest LT-IO1
for such Distribution Date multiplied by a fraction, the numerator of which is
the Notional Amount for REMIC III Regular Interest LT-IO1 immediately prior to
such Distribution Date and the denominator of which is the aggregate outstanding
Stated Principal Balance of the Group 1 Mortgage Loans as of the first day of
the month preceding the month of such Distribution Date and (C) (B) the
Uncertificated REMIC III Pass-Through Rate for REMIC III Regular Interest LT-IO2
for such Distribution Date multiplied by a fraction, the numerator of which is
the Notional Amount for REMIC III Regular Interest LT-IO2 immediately prior to
such Distribution Date and the denominator of which is the aggregate outstanding
Stated Principal Balance of the Group 2 Mortgage Loans as of the first day of
the month preceding the month of such Distribution Date and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days elapsed in the related Interest Accrual Period. For federal income tax
purposes, the economic equivalent of such rate shall be expressed as the
weighted average of the Uncertificated REMIC III Pass-Through Rate of the REMIC
III Regular Interest for which such Class of Certificates is the Corresponding
Certificate.

         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

                                       6
<PAGE>

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

         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
related Determination Date on account of (i) all Scheduled Payments or portions
thereof received in respect of the Mortgage Loans due after the related Due Date
and (ii) Principal Prepayments and Liquidation Proceeds received in respect of
such Mortgage Loans after the last day of the related Prepayment Period or Due
Period, respectively.

         Applied Realized Loss Amount: With respect to any Distribution Date,
the sum of the Realized Losses with respect to the Mortgage Loans which 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 Account (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

                                       7
<PAGE>

Closing Date, each Class of Regular Certificates constitutes a Class of
Book-Entry Certificates.

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

         Calendar Quarter: A Calendar Quarter shall consist of one of the
following time periods in any given year: January 1 through March 31, April 1
through June 30, July 1 though September 30, and October 1 through December 31.

         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-ECC2". 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-12, 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-ECC2". 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 the Class A-IO 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

                                       8
<PAGE>

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

         Certificate Register: The register maintained pursuant to Section 5.02
hereof.

         Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Class of Regular Certificates, except that
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any affiliate of the
Depositor shall be deemed not to be Outstanding and the Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests 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 Certificates and Class 2-A Certificates immediately prior to
such Distribution Date, over (ii) the lesser of (x) 61.40% 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 Distribution Target Amounts.

                                       9
<PAGE>

         Class A-IO Certificates: Any Certificate designated as a "Class A-IO
Certificate" on the face thereof, in the form of Exhibit A-3 hereto.

         Class A-IO Current Interest: For any Distribution Date, the interest
accrued on the Class A-IO Notional Balance during the related Accrual Period at
the Class A-IO Pass-Through Rate.

         Class A-IO Notional Balance: For any Accrual Period for any
Distribution Date, an amount equal to the lesser of (a) 350,000,000 and (b) the
aggregate Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period to such Distribution Date. After the Accrual Period related
to the Distribution Date in November 2004, the notional balance of the Class
A-IO Certificates will be zero, and the Class A-IO Certificates will not be
entitled to any further distributions. For federal income tax purposes, the
Class A-IO Certificates will not have a Notional Balance, but will be entitled
to 100% of amounts distributed on REMIC III Regular Interest LT-IO1 and REMIC
III Regular Interest LT-IO2.

         Class A-IO Pass-Through Rate: For each Accrual Period and (i) any
Distribution Date on or prior to the November 2004 Distribution Date will equal
the lesser of (a) the Class A-IO Scheduled Rate and (b) the positive difference
between (x) the weighted average Adjusted Net Mortgage Rate of the Mortgage
Loans for such Distribution Date and (y) the weighted average Pass-Through Rate
of the Offered Certificates other than the Class A-IO Certificates and Class A-R
Certificates, adjusted to an effective rate reflecting the accrual of interest
based on a 360-day year consisting of twelve 30-day months and (ii) any
Distribution Date on or after the December 2004 Distribution Date, a rate equal
to 0.00% per annum. For federal income tax purposes, the Class A-IO Certificates
will not have a Pass-Through Rate, but will be entitled to 100% of amounts
distributed on REMIC III Regular Interest LT-IO1 and REMIC III Regular Interest
LT-IO2.

         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.

         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
April 2011.

                                       10
<PAGE>

         Class 1-A Confirmation and Agreement: The Confirmation and Agreement
dated July 21, 2004, reference number 2000005045661, 2000005045662, 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 and the
Class 1-A Certificates, 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 the Class 1-A Pass-Through Rate thereon 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, 0.330% per annum and, for any Distribution Date after the
Optional Termination Date, 0.660% 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.

         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) 61.40% of the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 1 for such Distribution Date

                                       11
<PAGE>

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 aggregate Stated Principal
Balance of the Initial Mortgage Loans in Loan Group 1 as of the Initial Cut-off
Date and the original 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 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
April 2011.

         Class 2-A Confirmation and Agreement: The Confirmation and Agreement
dated July 22, 2004, reference number 2000005045663, 200000504664, 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 Certificate Principal Balance of the Class 2-A
Certificates immediately prior to such Distribution Date, over (ii) the lesser
of (x) 61.40% 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 Balance
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 Initial Mortgage Loans in Loan
Group 2 as of the Initial Cut-off Date and the original Pre-Funded Amount
allocated to Loan Group 2 on the Closing Date.

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

                                       12
<PAGE>

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

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

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

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

         Class 2-A Margin: For any Distribution Date on or prior to the Optional
Termination Date, 0.380% per annum and, for any Distribution Date after the
Optional Termination Date, 0.760% per annum.

         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, Class R-II Interest, Class R-III Interest and Class
R-IV Interest and evidencing an interest designated as a "residual interest" in
REMIC I, REMIC II, REMIC III and REMIC IV 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: 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, Class R-II Interest and Class
R-III Interest, and evidencing an interest designated as a "residual interest"
in REMIC I, REMIC II, REMIC III and REMIC IV for purposes of the REMIC
Provisions.

         Class B Certificate: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-10 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.

                                       13
<PAGE>

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

         Class B Margin: For 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.

         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 Certificates and Class 2-A 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), (H) the Class M-7 Certificates (after taking into account
distribution of the Class M-7 Principal Distribution Amount on such Distribution
Date), (I) the Class M-8 Certificates (after taking into account distribution of
the Class M-8 Principal Distribution Amount on such Distribution Date) and (J)
the Class B Certificate Principal Balance immediately prior to such Distribution
Date over (ii) the lesser of (x) 94.40% of the

                                       14
<PAGE>

aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
and (y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class 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 III Regular Interests other than REMIC III
Regular Interest LT-P, REMIC III Regular Interest LT-R, REMIC III Regular
Interest LT-IO1 and REMIC III Regular Interest LT-IO2.

         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 (1) through (14) below, and the denominator of
which is the Uncertificated Principal Balance of the REMIC III Regular Interests
(other than REMIC III Regular Interest LT-P, REMIC I Regular Interest LT-R,
REMIC II Regular Interest LT-IO1 and REMIC III Regular Interest LT-IO2). For
purposes of calculating the Pass Through Rate for the Class C Certificates, the
numerator is equal to the sum of the following components:

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

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

                  o the Uncertificated REMIC III Pass-Through Rate for REMIC III
Regular Interest LT-2A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC III Regular Interest LT-2A;

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

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

                                       15
<PAGE>

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

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

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

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

                  o the Uncertificated REMIC III Pass-Through Rate for REMIC III
Regular Interest LT-M7 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC III Regular Interest LT-M7;

                  o the Uncertificated REMIC III Pass-Through Rate for REMIC III
Regular Interest LT-M8 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC III Regular Interest LT-M8;

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

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

                  o 100% of the interest distributed on REMIC III 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.

                                       16
<PAGE>

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

         Class M-1 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-1 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-1 Certificates
with respect to interest.

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

         Class M-1 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 0.600% per annum and, for any Distribution Date after the
Optional Termination Date, 0.900% per annum.

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

         Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Certificate
Principal Balance of the Class 1-A Certificates and Class 2-A 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) 67.80% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date minus the OC Floor; provided,
however, that after the Certificate Principal Balance of each other Class of
Offered Certificates is reduced to zero, the Class M-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.

                                       17
<PAGE>

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

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

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

         Class M-2 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 0.650% per annum and, for any Distribution Date after the
Optional Termination Date, 0.975% per annum.

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

         Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Class 1-A Certificates and Class 2-A 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) 74.10% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date minus the OC Floor; provided,
however, that after the Certificate Principal Balance of each other Class of
Offered Certificates is reduced to zero, the Class M-2 Principal Distribution
Amount for such Distribution Date will equal 100% of the Principal Distribution
Amount for such Distribution Date.

         Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.

                                       18
<PAGE>

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

         Class M-3 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance immediately prior to such
Distribution Date.

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

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

         Class M-3 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.

         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 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) 77.70% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date minus the OC Floor;
provided, however, that after the Certificate Principal Balance of each other
Class of Offered Certificates is reduced to zero, the Class M-3 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.

                                       19
<PAGE>

         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 and the
Class M-4 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-4 Certificates would otherwise have accrued for such Distribution
Date had the Class M-3 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-4 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-4 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-4 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-4 Pass-Through Rate
(without giving effect to the Net Rate Cap).

         Class M-4 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 1.200% per annum and, for any Distribution Date after the
Optional Termination Date, 1.800% 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 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) 81.30% 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

                                       20
<PAGE>

and (y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-4 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

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

         Class M-5 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance immediately prior to such
Distribution Date.

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

         Class M-5 Interest Carryover Amount: For any Distribution Date and the
Class M-5 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-5 Certificates would otherwise have accrued for such Distribution
Date had the Class M-5 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-5 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-5 Certificates 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, 1.250% per annum and, for any Distribution Date after the
Optional Termination Date, 1.875% 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 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

                                       21
<PAGE>

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) 84.50% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date after giving effect to distributions to be made on that Distribution Date
minus the OC Floor; provided, however, that after the Certificate Principal
Balance of each other Class of Offered Certificates is reduced to zero, the
Class M-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 and the
Class M-6 Certificates, 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 the Class M-6 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-6 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-6 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-6 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-6 Pass-Through Rate
(without giving effect to the Net Rate Cap).

         Class M-6 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 1.450% per annum and, for any Distribution Date after the
Optional Termination Date, 2.175% per annum.

                                       22
<PAGE>

         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 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) and (G) the Class M-6 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 87.30%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-6 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

         Class M-7 Certificate: Any Certificate designated as a "Class M-7
Certificate" on the face thereof, in the form of Exhibit A-10 hereto,
representing the right to distributions as set forth herein.

         Class M-7 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-7 Certificates.

         Class M-7 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-7 Pass-Through Rate on
the Class M-7 Certificate Principal Balance immediately prior to such
Distribution Date.

         Class M-7 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-7 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-7 Certificates
with respect to interest on such prior Distribution Dates.

         Class M-7 Interest Carryover Amount: For any Distribution Date and
Class M-7 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-7 Certificates would otherwise have accrued for such Distribution
Date had the Class M-7

                                       23
<PAGE>

Pass-Through Rate thereon been calculated as the sum of One-Month LIBOR and the
applicable Class M-7 Margin for such Distribution Date, over (ii) the amount of
interest accrued on the Class M-7 Certificates at the Net Rate Cap for such
Distribution Date and (B) the Class M-7 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class M-7 Pass-Through Rate (without
giving effect to the Net Rate Cap).

         Class M-7 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 1.900% per annum and, for any Distribution Date after the
Optional Termination Date, 2.850% per annum.

         Class M-7 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-7 Margin and (ii) the Net Rate Cap for such
Distribution Date.

         Class M-7 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Class 1-A Certificates and Class 2-A 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), (F) the Class M-6 Certificate Principal Balance (after
taking into account distribution of the Class M-6 Principal Distribution Amount
on such Distribution Date), (G) the Class M-7 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (x) 90.20%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date minus the OC Floor; provided, however, that after the
Certificate Principal Balance of each other Class of Offered Certificates is
reduced to zero, the Class M-7 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

         Class M-8 Certificate: Any Certificate designated as a "Class M-8
Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.

         Class M-8 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-8 Certificates.

                                       24
<PAGE>

         Class M-8 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-8 Pass-Through Rate on
the Class M-8 Certificate Principal Balance immediately prior to such
Distribution Date.

         Class M-8 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-8 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-8 Certificates
with respect to interest on such prior Distribution Dates.

         Class M-8 Interest Carryover Amount: For any Distribution Date and
Class M-8 Certificates, the sum of (A) the excess of (i) the amount of interest
the Class M-8 Certificates would otherwise have accrued for such Distribution
Date had the Class M-8 Pass-Through Rate thereon been calculated as the sum of
One-Month LIBOR and the applicable Class M-8 Margin for such Distribution Date,
over (ii) the amount of interest accrued on the Class M-8 Certificates at the
Net Rate Cap for such Distribution Date and (B) the Class M-8 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-8 Pass-Through Rate
(without giving effect to the Net Rate Cap).

         Class M-8 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 2.150% per annum and, for any Distribution Date after the
Optional Termination Date, 3.225% per annum.

         Class M-8 Pass-Through Rate: For any Distribution Date, the lesser of
(i) One-Month LIBOR plus the Class M-8 Margin and (ii) the Net Rate Cap for such
Distribution Date.

         Class M-8 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of: (A) the aggregate Certificate
Principal Balance of the Class 1-A Certificates and Class 2-A 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), (F) the Class M-6 Certificate Principal Balance (after
taking into account distribution of the Class M-6 Principal Distribution Amount
on such Distribution Date), (G) the Class M-7 Certificate Principal Balance
(after taking into account distribution of the Class M-7 Principal Distribution
Amount on such Distribution Date), (H) the Class M-8 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (x)
92.40% of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date after giving effect to distributions to be made

                                       25
<PAGE>

on that Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date after giving effect to distributions
to be made on that Distribution Date minus the OC Floor; provided, however, that
after the Certificate Principal Balance of each other Class of Offered
Certificates is reduced to zero, the Class M-8 Principal Distribution Amount for
such Distribution Date will equal 100% of the Principal Distribution Amount for
such Distribution Date.

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

         Class P Certificate Principal Balance: As of any date of determination,
the Certificate Principal Balance of the Class P Certificates.

         Class P Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Class P Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-ECC2".

         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.

         Class R-IV Interest: The uncertificated Residual Interest in REMIC IV.

         Closing Date:  July 29, 2004.

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

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

         Confirmation And 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:

                                       26
<PAGE>

Corporate Trust MBS Administration), telephone: (212) 815-3236, facsimile: (212)
815-3986.

         Corresponding Certificate: With respect to each REMIC III Regular
Interest set forth below, the Regular Certificate set forth in the table below:

             REMIC III Regular Interest                REMIC III Certificate
             --------------------------                ---------------------

                       LT-1A                           Class 1-A Certificate
                       LT-2A                           Class 2-A 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-M7                           Class M-7 Certificate
                       LT-M8                           Class M-8 Certificate
                        LT-B                            Class B Certificate
                        LT-P                            Class P Certificate
                        LT-R                           Class A-R Certificate
                       LT-IO1                         Class A-IO Certificate
                       LT-IO2                         Class A-IO 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.

         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 A-IO Certificates, the Class A-IO Current
Interest, (iv) the Class M-1 Certificates, the Class M-1 Current Interest, (v)
the Class M-2 Certificates, the Class M-2 Current

                                       27
<PAGE>

Interest, (vi) the Class M-3 Certificates, the Class M-3 Current Interest, (vii)
the Class M-4 Certificates, the Class M-4 Current Interest, (viii) the Class M-5
Certificates, the Class M-5 Current Interest, (ix) the Class M-6 Certificates,
the Class M-6 Current Interest, (x) the Class M-7 Certificates, the Class M-7
Current Interest, (xi) the Class M-8 Certificates, the Class M-8 Current
Interest, (xii) the Class B Certificates, the Class B Current Interest and (xii)
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>
                                                  3.00% with  respect  to August  2007,  plus an  additional
August 2007 - July 2008.......................    1/12th of 1.75% for each month thereafter until July 2008
                                                  4.75% with  respect  to August  2008,  plus an  additional
August 2008 - July 2009.......................    1/12th of 1.25% for each month thereafter until July 2009
                                                  6.25% with  respect  to August  2009,  plus an  additional
August 2009 - July 2010.......................    1/12th of 0.75% for each month thereafter until July 2010
August 2010 and thereafter....................    7.00%
</TABLE>

         Cut-off Date: In the case of any Initial Mortgage Loan, the later of
(x) July 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 Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all payments of principal due on or prior to the Cut-off Date,
whether or not received, and all Principal Prepayments received on or prior to
the Cut-off Date, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.

         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

                                       28
<PAGE>

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 in each Loan Group 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 in each Loan Group 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 Initial
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 Rolling Delinquency Percentage equals or
exceeds the product of 38.91% and the Senior Enhancement Percentage.

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

         Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.

         Depositor: CWABS, Inc., a Delaware corporation, or its successor in
interest.

         Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry

                                       29
<PAGE>

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-ECC2". 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 August 2004.

         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

                                       30
<PAGE>

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)(xi), and (ii) the amount
remaining after the distribution of principal to Certificateholders for such
Distribution Date pursuant to Section 4.04(d)(i)(K) or 4.04(d)(ii)(K) and (iii)
the related Overcollateralization Reduction Amount, if any, for such
Distribution Date.

         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 Pool Net WAC Amount: With respect to any Distribution Date and
(x) the Class A-IO Certificates, will equal the positive excess, if any, of (i)
the amount of interest accrued on the Class A-IO Certificates for such
Distribution Date calculated at the Adjusted Net WAC Rate over (ii) the amount
of interest accrued on the Class A-IO Certificates at the Pass-Through Rate for
the Class A-IO Certificates and (y) the Offered Certificates (other than the
Class A-R Certificates and Class A-IO Certificates), the positive excess, if
any, of (i) the amount of interest accrued on the Offered Certificates (other
than the Class A-R Certificates and Class A-IO Certificates) for such
Distribution Date calculated at the Net Rate Cap for the Offered Certificates
(other than the Class A-R Certificates and Class A-IO Certificates) over (ii)
the amount of interest accrued on the Offered Certificates (other than the Class
A-R Certificates and Class A-IO Certificates) at the Adjusted Net WAC Rate.

         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

                                       31
<PAGE>

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.

         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: The period from and after the Closing Date to and
including September 30, 2004.

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

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

         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.

                                       32
<PAGE>

         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
(other than the Class A-IO Certificates), the Certificate Principal Balance of
such Certificate or any predecessor Certificate on the Closing Date.

         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:  CWABS Asset-Backed Certificates Trust 2004-ECC2

         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,

                                       33
<PAGE>

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
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, (ix) the Class M-7
Certificates, the Class M-7 Interest Carry Forward Amount, (x) the Class M-8
Certificates, the Class M-8 Interest Carry Forward Amount and (xi) the Class B
Certificates, the Class B Interest Carry Forward Amount.

         Interest Determination Date: With respect to the Certificates (other
than the Class A-IO, Class A-R, Class C and Class P Certificates) for the first
Accrual Period, July 27, 2004. With respect to the Certificates (other than the
Class A-IO, 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
plus, solely for federal income tax purposes, the amount of Excess Pool Net WAC
Amount (with respect to the Class A-IO Certificates) and less the amount of
Excess Pool Net WAC Amount (with respect to the offered Certificates (other than
the Class A-IO Certificates and the Class A-R Certificates)).

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

                                       34
<PAGE>

any), less all Nonrecoverable Advances relating to interest reimbursed during
the related Due Period.

         Latest Possible Maturity Date:  The Distribution Date in January 2035.

         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.

         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.

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<PAGE>

         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 III Pass-Through Rate for REMIC III Regular
Interest LT-1A, REMIC III Regular Interest LT-2A, REMIC III Regular Interest
LT-M1, REMIC III Regular Interest LT-M2, REMIC III Regular Interest LT-M3, REMIC
III Regular Interest LT-M4, REMIC III Regular Interest LT-M5, REMIC III Regular
Interest LT-M6, REMIC III Regular Interest LT-M7, REMIC III Regular Interest
LT-M8, REMIC III Regular Interest LT-B and REMIC III Regular Interest LT-ZZ,
with the rates on each such REMIC III Regular Interest (other than REMIC III
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 III Regular Interest
and (ii) the related Net Rate Cap, and the rate on REMIC III Regular Interest
LT-ZZ subject to a cap of zero for purposes of this calculation; provided that
the Uncertificated REMIC III Pass-Through Rate and the related caps REMIC III
Regular Interest LT-1A, REMIC III Regular Interest LT-2A, REMIC III Regular
Interest LT-M1, REMIC III Regular Interest LT-M2, REMIC III Regular Interest
LT-M3, REMIC III Regular Interest LT-M4, REMIC III Regular Interest LT-M5, REMIC
III Regular Interest LT-M6, REMIC III Regular Interest LT-M7 and REMIC III
Regular Interest LT-M8 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.

         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.

                                       36
<PAGE>

         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;

         (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;

                                       37
<PAGE>

         (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.

         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.

                                       38
<PAGE>

         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
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, Class M-7, Class M-8 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 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 III Pass-Through
Rate on REMIC III Regular Interest LT-1GRP, weighted on the basis of the
Uncertificated Principal Balance of such REMIC III Regular Interest. For federal
income tax purposes, the equivalent of clause (ii) above shall be expressed as
the weighted average of the Uncertificated REMIC III Pass-Through Rate on REMIC
III Regular Interest LT-2GRP, weighted on the basis of the Uncertificated
Principal Balance of such REMIC III Regular Interest. For federal income tax
purposes, the equivalent of clause (iii) above shall be expressed as the
weighted average of the Uncertificated REMIC III Pass-Through Rates on (a) REMIC
III Regular Interest LT-1SUB, subject to a cap and a floor equal to the Group 1
Net WAC Rate and (b) REMIC III 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 III 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-AInterest Carryover Amount for such
Distribution Date (if any), (iii) the Class M-1 Interest Carryover Amount for
such Distribution Date (if any), (iv) the Class M-2 Interest Carryover Amount
for such Distribution Date (if any), (v) the Class M-3 Interest Carryover Amount
for such Distribution Date (if any), (vi) the Class M-4 Interest Carryover
Amount for such Distribution Date (if any), (vii) the Class M-5 Interest
Carryover Amount for such Distribution Date (if any), (viii) the Class M-6
Interest Carryover Amount for such Distribution Date (if any), (ix) the Class
M-7 Interest Carryover Amount for such Distribution Date (if any), (x) the Class
M-8 Interest Carryover Amount for such Distribution Date (if any) and (xi) the
Class B Interest Carryover Amount for such Distribution Date (if any); provided
that when the term Net Rate Carryover is used with respect to one Class of
Certificates (other than the Class A-R, Class C and Class P Certificates), it
shall mean such carryover amount listed in clauses (i), (ii), (iii) (iv), (v),
(vi), (vii), (viii), (ix), (x) or (xi) as applicable, with the same Class

                                       39
<PAGE>

designation. The Class A-IO, 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, Class A-IO, Class A-R,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class B Certificates.

         Officer's Certificate: A certificate (i) in the case of the Depositor,
signed by the Chairman of the Board, the Vice Chairman of the Board, the
President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary, 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 1.430% per annum. If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Trustee), One-Month LIBOR for the applicable Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the Trustee
and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period.

         Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the

                                       40
<PAGE>

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.

         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

                                       41
<PAGE>

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 November 2004, zero, (b) on or
after the Distribution Date in December 2004, and on each Distribution Date
prior to the Stepdown Date, an amount equal to 2.80% 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 5.60% 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 Certificates, the
Class 2-A Pass-Through Rate; with respect to the Class A-IO Certificates, the
Class A-IO Pass-Through Rate; with respect to the Class M-1 Certificates, the
Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate; with respect to the Class M-3 Certificates, the
Class M-3 Pass-Through Rate; with respect to the Class M-4 Certificates, the
Class M-4 Pass-Through Rate; with respect to the Class M-5 Certificates, the
Class M-5 Pass-Through Rate; with respect to the Class M-6 Certificates, the
Class M-6 Pass-Through Rate; with respect to the Class M-7 Certificates, the
Class M-7 Pass-Through Rate; with respect to the Class M-8 Certificates, the
Class M-8 Pass-Through Rate; with respect to the Class B Certificates, the Class
B Pass-Through Rate; and with respect to the Class C Certificates, the Class C
Pass-Through Rate.

         Percentage Interest: With respect to any Certificate (other than the
Class A-IO, 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
A-IO, 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.

                                       42
<PAGE>

         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
         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

                                       43
<PAGE>

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

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

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

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

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

                                       44
<PAGE>

         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.

         Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date (after giving effect to Principal Prepayments and
Liquidation Proceeds accrued in the Prepayment Period related to such Due Date).

         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 $104,113,520.64 for Loan Group 1
and $32,884,198.28 for Loan Group 2.

         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

                                       45
<PAGE>

registered holders of CWABS, Inc., Asset-Backed Certificates, Series 2004-ECC2."
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 Mortgaged
         Property is located;

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

                  (v) the term of the Prepayment Charge;

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

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

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

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

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<PAGE>

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

         Prepayment Period: As to any Distribution Date and Due Date, the period
beginning with the opening of business on the sixteenth day of the calendar
month preceding the month in which such Distribution Date occurs (or, with
respect to the first Distribution Date, the period from July 1, 2004) and ending
on the close of business on the fifteenth day of the month in which such
Distribution Date occurs.

         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 related Overcollateralization Reduction Amount for that Distribution
Date.

         Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01 hereof)
that is received in advance of its scheduled Due Date and is not accompanied by
an amount as to interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.

         Principal Remittance Amount: As to any Distribution Date (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

                                       47
<PAGE>

Prepayment Period, (iii) the Stated Principal Balance of each Mortgage Loan that
was repurchased by the Seller or purchased by the Master Servicer, (iv) the
amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loans is less than the aggregate unpaid principal balance
of any Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan and (v) all Liquidation Proceeds and Subsequent
Recoveries collected during the related Due Period (to the extent such
Liquidation Proceeds related to principal); less (b) all non-recoverable
Advances relating to principal and certain expenses reimbursed during the
related Due Period.

         Private Certificates: The Class C Certificates and Class P
Certificates.

         Prospectus Supplement: The Prospectus Supplement dated July 27, 2004,
relating to the public offering of the Offered Certificates offered thereby.

         PUD:  A Planned Unit Development.

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

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

         Realized Loss: With respect to each 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

                                       48
<PAGE>

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-IO, 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-IO, Class A-R, Class C and Class P Certificates, the last Business
Day of the month preceding the month of a Distribution Date.

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

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

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<PAGE>

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

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

         Relief Act:  The Servicemembers Civil Relief Act of 1940.

         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, the Excess Net WAC Rate
Reserve Fund and the Pre-Funding Account.

         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, 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.

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<PAGE>

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

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

         REMIC II Regular Interests: REMIC II Regular Interest LT-1, REMIC II
Regular Interest LT-2, REMIC II Regular Interest LT-IO1, REMIC I Regular
Interest LT-IO2, REMIC I Regular Interest LT-P and REMIC I Regular Interest
LT-R.

         REMIC II Regular Interest LT-1: A regular interest in REMIC II 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 II Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC II Regular Interest LT-2: A regular interest in REMIC II 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 II Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC II Regular Interest LT-IO1: A regular interest in REMIC II 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 II Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC II Regular Interest LT-IO2: A regular interest in REMIC II 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 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 II, 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 II, 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 III 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

                                       51
<PAGE>

Pass-Through Rate for REMIC III Regular Interest LT-AA minus the Marker Rate,
divided by (b) 12.

         REMIC III Marker Allocation Percentage: 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC III
Regular Interest LT-AA, REMIC III Regular Interest LT-1A, REMIC III Regular
Interest LT-2A, REMIC III Regular Interest LT-M1, REMIC III Regular Interest
LT-M2, REMIC III Regular Interest LT-M3, REMIC III Regular Interest LT-M4, REMIC
III Regular Interest LT-M5, REMIC III Regular Interest LT-M6, REMIC III Regular
Interest LT-M7, REMIC III Regular Interest LT-M8, REMIC III Regular Interest
LT-B, REMIC III Regular Interest LT-ZZ, REMIC III Regular Interest LT-P and
REMIC III Regular Interest LT-R.

         REMIC III Overcollateralized Amount: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC III Regular Interests minus (ii) the Uncertificated Principal Balances
of REMIC III Regular Interest LT-1A, REMIC III Regular Interest LT-2A, REMIC III
Regular Interest LT-M1, REMIC III Regular Interest LT-M2, REMIC III Regular
Interest LT-M3, REMIC III Regular Interest LT-M4, REMIC III Regular Interest
LT-M5, REMIC III Regular Interest LT-M6, REMIC III Regular Interest LT-M7, REMIC
III Regular Interest LT-M8, REMIC III Regular Interest LT-B, REMIC III Regular
Interest LT-P and REMIC III Regular Interest LT-R, in each case as of such date
of determination.

         REMIC III Overcollateralization Target Amount: 1% of the
Overcollateralization Target Amount.

         REMIC III 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 III Regular Interest LT-1A, REMIC III Regular
Interest LT-2A, REMIC III Regular Interest LT-M1, REMIC III Regular Interest
LT-M2, REMIC III Regular Interest LT-M3, REMIC III Regular Interest LT-M4, REMIC
III Regular Interest LT-M5, REMIC III Regular Interest LT-M6, REMIC III Regular
Interest LT-M7, REMIC III Regular Interest LT-M8 and REMIC III Regular Interest
LT-B and the denominator of which is the sum of the Uncertificated Principal
Balances of REMIC III Regular Interests REMIC III Regular Interest LT-1A, REMIC
III Regular Interest LT-2A, REMIC III Regular Interest LT-M1, REMIC III Regular
Interest LT-M2, REMIC III Regular Interest LT-M3, REMIC III Regular Interest
LT-M4, REMIC III Regular Interest LT-M5, REMIC III Regular Interest LT-M6, REMIC
III Regular Interest LT-M7, REMIC III Regular Interest LT-M8, REMIC III Regular
Interest LT-B and REMIC III Regular Interest LT-ZZ.

         REMIC III Regular Interests: REMIC III Regular Interest LT-1A, REMIC
III Regular Interest LT-2A, REMIC III Regular Interest LT-M1, REMIC III Regular
Interest LT-M2, REMIC III Regular Interest LT-M3, REMIC III Regular Interest
LT-M4, REMIC III Regular Interest LT-M5, REMIC III Regular Interest LT-M6, REMIC
III Regular Interest LT-M7, REMIC III Regular Interest LT-M8, REMIC III Regular
Interest

                                       52
<PAGE>

LT-B, REMIC III Regular Interest LT-IO1, REMIC III Regular Interest LT-IO2,
REMIC III Regular Interest LT-ZZ, REMIC III Regular Interest LT-P, REMIC III
Regular Interest LT-R, REMIC III Regular Interest LT-1SUB, REMIC III Regular
Interest LT-1GRP, REMIC III Regular Interest LT-2SUB, REMIC III Regular Interest
LT-2GRP and REMIC III Regular Interest LT-XX.

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

         REMIC III Regular Interest LT-1A: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-2A: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-IO1: A regular interest in REMIC III that
is held as an asset of REMIC III, that has an initial notional amount equal to
the related Uncertificated Notional Amount, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-IO2: A regular interest in REMIC III that
is held as an asset of REMIC III, that has an initial notional amount equal to
the related Uncertificated Notional Amount, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-M1: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-M2: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-M3: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-M4: A regular interest in REMIC III that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related

                                       53
<PAGE>

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

         REMIC III Regular Interest LT-M5: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-M6: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-M7: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-M8: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-B: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-ZZ: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-P: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-R: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III Regular Interest LT-1SUB: A regular interest in REMIC III
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 III Pass-Through Rate, and that has such other
terms as are described herein.

                                       54
<PAGE>

         REMIC III Regular Interest LT-1GRP: A regular interest in REMIC III
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 III Pass-Through Rate, and that has such other
terms as are described herein.

         REMIC III Regular Interest LT-2SUB: A regular interest in REMIC III
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 III Pass-Through Rate, and that has such other
terms as are described herein.

         REMIC III Regular Interest LT-2GRP: A regular interest in REMIC III
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 III Pass-Through Rate, and that has such other
terms as are described herein.

         REMIC III Regular Interest LT-XX: A regular interest in REMIC III 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 III Pass-Through Rate, and that has such other terms as are
described herein.

         REMIC III 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 III Regular Interest LT-ZZ and an Uncertificated Principal
Balance equal to the excess of (x) the Uncertificated Principal Balance of REMIC
III Regular Interest LT-ZZ over (y) the REMIC III Overcollateralized Amount, in
each case for such Distribution Date, over (ii) Uncertificated Accrued Interest
on REMIC III Regular Interest LT-1A, REMIC III Regular Interest LT-2A, REMIC III
Regular Interest LT-M1, REMIC III Regular Interest LT-M2, REMIC III Regular
Interest LT-M3, REMIC III Regular Interest LT-M4, REMIC III Regular Interest
LT-M5, REMIC III Regular Interest LT-M6, REMIC III Regular Interest LT-M7, REMIC
III Regular Interest LT-M8 and REMIC III Regular Interest LT-B, with the rate on
each such REMIC III Regular Interest subject to a cap equal to the lesser of (i)
LIBOR plus the related Margin for Corresponding Class for such REMIC III Regular
Interest and (ii) the related Net Rate Cap, and the rate on REMIC III Regular
Interest LT-ZZ subject to a cap of zero for purposes of this calculation;
provided that the Uncertificated REMIC III Pass-Through Rate and the related
caps for REMIC III Regular Interest LT-1A, REMIC III Regular Interest LT-2A,
REMIC III Regular Interest LT-M1, REMIC III Regular Interest LT-M2, REMIC III
Regular Interest LT-M3, REMIC III Regular Interest LT-M4, REMIC III Regular
Interest LT-M5, REMIC III Regular Interest LT-M6, REMIC III Regular Interest
LT-M7, REMIC III Regular Interest LT-M8 and REMIC III 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 III Sub WAC Allocation Percentage: 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC III
Regular Interest LT-1SUB, REMIC III Regular Interest LT-1GRP, REMIC III Regular
Interest

                                       55
<PAGE>

LT-2SUB, REMIC III Regular Interest LT2-GRP and REMIC III Regular Interest
LT-XX.

         REMIC III Subordinated Balance Ratio: The ratio among the
Uncertificated Principal Balances of each REMIC III Regular Interest ending with
the designation "SUB,", equal to the ratio among, with respect to each such
REMIC III Regular Interest, the excess of (x) the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group over (y) the Certificate
Principal Balance of the Class 1-A Certificates or Class 2-A Certificates, as
applicable, and the Class R Certificates and Class P Certificates in the related
Loan Group.

         REMIC IV Regular Certificates: Any of the Class 1-A, Class 2-A, Class
A-IO, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class B, Class C or Class P Certificates.

         REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
temporary and final regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.

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

         Replacement Mortgage Loan: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit N, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (a) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (c) have the same Index, Periodic Rate Cap and intervals
between Adjustment Dates as that of the Deleted Mortgage Loan and a Gross Margin
not more than 1% per annum higher or lower than that of the Deleted Mortgage
Loan; and (d) not permit conversion of the related Mortgage Rate to a fixed
Mortgage Rate; (iii) have the same or higher credit quality characteristics than
that of the Deleted Mortgage Loan; (iv) at the time of transfer to the Trust
Fund, be accruing interest at a Mortgage Rate not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (vi) have a remaining term to
maturity no greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vii) not permit conversion of the Mortgage Rate from a
fixed rate to a variable rate or visa versa; (viii) provide for a

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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.

         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 September 2004 Distribution Date, to the extent not covered by
Excess Cashflow, 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

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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.

         Senior Enhancement Percentage: With respect to each Distribution Date
on or after the Stepdown Date, the fraction (expressed as a percentage) (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 Certificates and Class 2-A
Certificates have been reduced to zero, the aggregate Certificate Principal
Balance of the Class 1-A Certificates and Class 2-A Certificates, or (ii) after
the Certificate Principal Balances of the Class 1-A Certificates and Class 2-A
Certificates have been reduced to zero, the Certificate Principal Balance of the
most senior Class of Certificates outstanding as of the preceding Master
Servicer Advance Date and (2) the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans for the preceding Distribution Date.

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

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

         Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.

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

         Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the unpaid principal balance of the
Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial Prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due on or prior to such date and
irrespective any delinquency in payment by the related mortgagor, and (ii) as of
any Distribution Date, the Stated Principal Balance of the Mortgage Loan as of
its Cut-off Date, minus the sum of (a) the principal portion of the Scheduled
Payments (x) due with respect to such Mortgage Loan during each Due Period

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ending prior to such Distribution Date and (y) that were received by the Master
Servicer as of the close of business on the Determination Date related to such
Distribution Date or with respect to which Advances were made as of the Master
Servicer Advance Date related to such Distribution Date, (b) all Principal
Prepayments with respect to such Mortgage Loan received by the Master Servicer
during each Prepayment Period ending prior to such Distribution Date, and (c)
all Liquidation Proceeds collected with respect to such Mortgage Loan during
each Due Period ending prior to such Distribution Date, to the extent applied by
the Master Servicer as recoveries of principal in accordance with Section 3.12.
The Stated Principal Balance of any Mortgage Loan that becomes a Liquidated Loan
will be zero on the Distribution Date following the Due Period in which such
Mortgage Loan becomes a Liquidated Loan. References herein to the Stated
Principal Balance the Mortgage Loans at any time shall mean the aggregate Stated
Principal Balances of all Mortgage Loans in the Trust Fund as of such time.

         Stepdown Date: The earlier to occur of (i) the Distribution Date
following the Distribution Date on which the aggregate Certificate Principal
Balance of the Class 1-A Certificates and Class 2-A Certificates is reduced to
zero and (ii) the later to occur of (a) the Distribution Date in August 2007 or
(b) the first Distribution Date on which the aggregate Certificate Principal
Balance of the Class 1-A Certificates and Class 2-A Certificates (after
calculating anticipated distributions on such Distribution Date) is less than or
equal to 61.40% 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 April 2011.

         Subordinated Confirmation And Agreement: The Confirmation and Agreement
dated July 21, 2004, reference number 200000504665, 200000504666, 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, Class M-7, Class M-8 and Class B Certificates.

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         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.

         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).

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         Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).

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

         Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F 4(d) and temporary
Treasury regulation ss. 301.6231(a)(7) 1T. Initially, this person shall be the
Trustee.

         Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.05.

         Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 36 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.

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

         Trigger Event: With respect to any Distribution Date on or after the
Stepdown Date, 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; (vi) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property; and (vii) the Excess Net WAC Rate Reserve Fund.

         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%.

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         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.

         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:

         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 Balance or Uncertificated Notional Amount, 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 Distribution Date, 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
Distribution Date, 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

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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, 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 to the REMIC II Regular Interests, pro
rata based on, and to the extent of, one month's interest at the then applicable
respective REMIC II Pass-Through Rate on the respective Uncertificated Principal
Balance of each such REMIC II Regular Interest.

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

                  (A) The REMIC III 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 among REMIC III Regular Interest LT-AA,
REMIC III Regular Interest LT-1A, REMIC III Regular Interest LT-2A, REMIC III
Regular Interest LT-M1, REMIC III Regular Interest LT-M2, REMIC III Regular
Interest LT-M3, REMIC III Regular Interest LT-M4, REMIC III Regular Interest
LT-M5, REMIC III Regular Interest LT-M6, REMIC III Regular Interest LT-M7, REMIC
III Regular Interest LT-M8, REMIC III Regular Interest LT-B, REMIC III Regular
Interest LT-ZZ, pro rata based on, and to the extent of, one month's interest at
the then applicable respective REMIC III Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC III Regular Interest; and

                  (B) The REMIC III Sub WAC Allocation Percentage of the
aggregate amount of any Prepayment Interest Shortfalls (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 III Regular Interest LT-1SUB,
REMIC III Regular Interest LT-1GRP, REMIC III Regular Interest LT-2SUB, REMIC
III Regular Interest LT-2GRP and REMIC III Regular Interest LT-XX, pro rata
based on, and to the extent of, one month's interest at the then applicable
respective Uncertificated REMIC III Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC III Regular Interest.

         Uncertificated Notional Amount: With respect to REMIC III Regular
Interest LT-IO1, and (1) the first four Distribution Dates, the Uncertificated
Principal Balance of REMIC II Regular Interest LT-IO1 and (2) thereafter, zero.
With respect to REMIC III Regular Interest LT-IO2 and (1) the first four
Distribution Dates, the Uncertificated Principal Balance of REMIC II Regular
Interest LT-IO2 and (2) thereafter, zero.

         Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate, Uncertificated REMIC II Pass-Through Rate or Uncertificated
REMIC III Pass-Through Rate.

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

         Uncertificated REMIC I Pass-Through Rate: With respect to REMIC I
Regular Interest LT-1, and (i) the first Distribution Date, 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 Distribution Date, 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 REMIC I Regular Interest LT-P and
(i) the first Distribution Date, 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 Distribution Date, 0.00% 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-R, 0.00%

         Uncertificated REMIC II Pass-Through Rate: With respect to REMIC II
Regular Interest LT-1, REMIC II Regular Interest LT-IO1 and REMIC II Regular
Interest LT-P, the weighted average of the Uncertificated REMIC I Pass-Through
Rates on REMIC I Regular Interest LT-1, REMIC I Regular Interest LT-1PF and
REMIC I Regular Interest LT-P, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC I Regular Interest. . With respect to REMIC
II Regular Interest LT-2 and REMIC II Regular Interest LT-IO2, the weighted
average of the Uncertificated REMIC I Pass-Through Rates on REMIC I Regular
Interest LT-2 and REMIC I Regular Interest LT-2PF, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC I Regular Interest. With
respect to REMIC II Regular Interest LT-1R, 0.00%.

         Uncertificated REMIC III Pass-Through Rate: With respect to REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-1A, REMIC II Regular
Interest LT-2A, 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-M7, REMIC II Regular Interest LT-M8, REMIC II Regular Interest LT-B,
REMIC I Regular Interest LT-ZZ, REMIC I Regular Interest LT-P, REMIC I Regular
Interest LT-1SUB, REMIC I Regular Interest LT-2SUB and REMIC I Regular Interest
LT-XX, the weighted average of (i) the Uncertificated REMIC II Pass-Through Rate
on REMIC II Regular Interest LT-1, (ii) the excess, if any, of (x) the
Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest LT-IO1
over (y) (1) (a)the Adjusted Net WAC Rate less (b) the Adjusted Net WAC Rate
less 3.520%, 6.283%, 5.797% and 5.122%, with respect to the first, second, third
and fourth distribution dates, respectively and (2) thereafter, the Adjusted Net
WAC Rate, (iii) the excess, if any, of (x) the Uncertificated REMIC II
Pass-Through Rate on REMIC II Regular Interest LT-IO2 over (y) (1) (a)the
Adjusted Net WAC Rate less (b) the Adjusted Net WAC Rate less 3.520%, 6.283%,
5.797% and 5.122%, with respect to the first, second, third and fourth
distribution dates, respectively and (2) thereafter, the

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Adjusted Net WAC Rate and (iv) the Uncertificated REMIC II Pass-Through Rate on
REMIC II Regular Interest LT-2, in each case weighted on the basis of each such
REMIC II Regular Interest's Uncertificated Principal Balance.

         With respect to REMIC III Regular Interest LT-IO1 and REMIC III Regular
Interest LT-IO2, (i) for the 1st Distribution Date, (a) the Adjusted Net WAC
Rate less (b) the Adjusted Net WAC Rate less 3.520% per annum, (ii) for the 2nd
Distribution Date, (a) the Adjusted Net WAC Rate less (b) the Adjusted Net WAC
Rate less 6.283% per annum, (iii) for the 3rd Distribution Date, (a) the
Adjusted Net WAC Rate less (b) the Adjusted Net WAC Rate less 5.797% per annum,
(iv) for the 4th Distribution Date, (a) the Adjusted Net WAC Rate less (b) the
Adjusted Net WAC Rate less 5.122% per annum (v) thereafter, 0.00%.

         With respect to REMIC III Regular Interest LT-1GRP, the weighted
average of (i) the REMIC II Pass-Through Rate on REMIC II Regular Interest LT-1
and (ii) the excess, if any, of (x) the Uncertificated REMIC II Pass-Through
Rate on REMIC II Regular Interest LT-IO1 over (y) (1) (a)the Adjusted Net WAC
Rate less (b) the Adjusted Net WAC Rate less 3.520%, 6.283%, 5.797% and 5.122%,
with respect to the first, second, third and fourth distribution dates,
respectively, and (2) thereafter, the Adjusted Net WAC Rate, in each case
weighted on the basis of each such REMIC II Regular Interest's Uncertificated
Principal Balance.

         With respect to REMIC III Regular Interest LT-2GRP, the weighted
average of (i) the REMIC II Pass-Through Rate on REMIC II Regular Interest LT-2
and (ii) the excess, if any, of (x) the Uncertificated REMIC II Pass-Through
Rate on REMIC II Regular Interest LT-IO2 over (y) (1) (a)the Adjusted Net WAC
Rate less (b) the Adjusted Net WAC Rate less 3.520%, 6.283%, 5.797% and 5.122%,
with respect to the first, second, third and fourth distribution dates,
respectively , and (2) thereafter, the Adjusted Net WAC Rate, in each case
weighted on the basis of each such REMIC II Regular Interest's Uncertificated
Principal Balance.

         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

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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 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, REMIC
II Regular Interests and REMIC III Regular Interest.

         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 96% to the Certificates other than the Class A-IO, 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-IO, Class A-R, Class C and Class P Certificates. Voting

                                       66
<PAGE>

Rights will be allocated among the Certificates of each such Class in accordance
with their respective Percentage Interests.

                                       67
<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......................       182,172                   406,342

Weighted Average Mortgage Rate........................       7.20                      6.78

Weighted Average Loan-to-Value Ratio..................       78.15                     81.23

Weighted Average Remaining Term to Maturity...........                 357                      360

Weighted Average Credit Bureau Risk Score.............       611                       628

Mortgage Loans with Prepayment Penalties at Origination      77.29                     85.63

Aggregate Principal Balance of Fixed Rate Mortgage Loans     172,359                   414,109

Aggregate Principal Balance of Adjustable Rate Mortgage
Loans.................................................       185,153                   404,965
</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).

                  (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

                                       70
<PAGE>

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;

                  (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

                                       71
<PAGE>

         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-ECC2, CWABS, Inc., by The Bank
         of New York, a New York banking corporation, as trustee under the
         Pooling and Servicing Agreement dated as of July 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 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

                                       72
<PAGE>

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 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

                                       73
<PAGE>

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 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

                                       74
<PAGE>

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.

         (i) It is understood and agreed that within 15 days of the Closing Date
the Seller will substitute certain Mortgage Loans with an unpaid principal
balance equal to $22,832,981.82 to cure any misallocation or error in the
initial delivery of the Mortgage Loans.

         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

                                       75
<PAGE>

noted thereon. The Trustee shall be under no duty or obligation to inspect,
review or examine such documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded in the real estate
records or that they are other than what they purport to be on their face.

         (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.

                                       76
<PAGE>

         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) 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.

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

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

         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

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         and injunctive and other forms of equitable relief may be subject to
         equitable defenses and to the discretion of the court before which any
         proceeding therefor may be brought.

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

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

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

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

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

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                  (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 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

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         agency or governmental body having jurisdiction over it which breach or
         violation may materially impair the Seller's ability to perform or meet
         any of its obligations under this Agreement.

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

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

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

                  (vii) The information set forth on Exhibit F-1 hereto with
         respect to each 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.

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                  (xii) Immediately prior to the assignment of each Mortgage
         Loan to the Depositor, the Seller had good title to, and was the sole
         owner of, such Mortgage Loan free and clear of any pledge, lien,
         encumbrance or security interest and had full right and authority,
         subject to no interest or participation of, or agreement with, any
         other party, to sell and assign the same pursuant to this Agreement.

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

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

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

                  (xvi) As of the Closing Date 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 and against any loss by reason of the
         invalidity or unenforceability of the lien resulting from the
         provisions of the Mortgage providing for adjustment in the mortgage
         interest and/or monthly payment; to the best of the Seller's knowledge,

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         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.

                  (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,

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         including, (i) in the case of a Mortgage designated as a deed of trust,
         by trustee's sale, and (ii) otherwise by judicial foreclosure.

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

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

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

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

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

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

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

                  (xxxii) No more than approximately 11.03% and 1.36% 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
         6.42% and 5.34% of the Initial Mortgage Loans in Loan Group 1 and Loan
         Group 2, respectively, are secured by condominium units. No more than
         approximately 0.50% and none 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 74.15% and 81.80% 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 6.78% and 11.05% of
         the Initial Mortgage Loans in Loan Group 1 and Loan Group 2,
         respectively, are secured by PUDs.

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                  (xxxiii) No Initial Mortgage Loan in Loan Group 1 and Loan
         Group 2 had a principal balance in excess of $500,000 and $600,000,
         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 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 One-Year Hybrid Mortgage Loan had an initial
         Adjustment Date no later than August 1, 2005; each Two-Year Hybrid
         Mortgage Loan had an initial Adjustment Date no later than August 1,
         2006; ; each Three-Year Hybrid Mortgage Loan had an initial Adjustment
         Date no later than August 1, 2007 and ; each Five-Year Hybrid Mortgage
         Loan had an initial Adjustment Date no later than August 1, 2008.

                  (xxxvii) Approximately 77.29% and 85.63% 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
         94.95% and 97.99% 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 5.05% and 2.01% 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.

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

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

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<PAGE>

         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
         September 1, 2004 with respect to the Initial Mortgage Loans and on or
         prior to October 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 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.

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                  (l) The Mortgage Rates borne by the Initial Mortgage Loans in
         Loan Group 1 as of the Cut-off Date ranged from 4.490% per annum to
         12.440% per annum and the weighted average Mortgage Rate as of the
         Cut-off Date was 7.196% per annum. The Mortgage Rates borne by the
         Initial Mortgage Loans in Loan Group 2 as of the Cut-off Date ranged
         from 4.500% per annum to 10.490% per annum and the weighted average
         Mortgage Rate as of the Cut-off Date was 6.783% per annum.

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

                  (lii) The Gross Margins on the Adjustable Rate Mortgage Loans
         that are Initial Mortgage Loans in Loan Group 1 range from
         approximately 4.875% to 8.600% and the weighted average Gross Margin
         was approximately 6.317%. The Gross Margins on the Adjustable Rate
         Mortgage Loans that are Initial Mortgage Loans in Loan Group 2 range
         from approximately 4.950% to 7.140% and the weighted average Gross
         Margin was approximately 6.223%.

                  (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

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         each Prepayment Charge is permissible and enforceable in accordance
         with its terms under applicable law upon the Mortgagor's full and
         voluntary principal prepayment (except to the extent that: (1) the
         enforceability thereof may be limited by bankruptcy, insolvency,
         moratorium, receivership and other similar laws relating to creditors'
         rights generally; or (2) the collectibility thereof may be limited due
         to acceleration in connection with a foreclosure or other involuntary
         prepayment).

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

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

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

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

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

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such substitution pursuant to (i) above shall not be effected prior to the
additional delivery to the Trustee of a Request for Release substantially in the
form of Exhibit M. Any Representing Party liable for a breach under this Section
2.03 shall promptly reimburse the Master Servicer and the Trustee for any
expenses reasonably incurred by the Master Servicer or the Trustee in respect of
enforcing the remedies for such breach. To enable the Master Servicer to amend
the Mortgage Loan Schedule, any Representing Party liable for a breach under
this Section 2.03 shall, unless it cures such breach in a timely fashion
pursuant to this Section 2.03, promptly notify the Master Servicer whether such
Representing Party intends either to repurchase, or to substitute for, the
Mortgage Loan affected by such breach. With respect to the representations and
warranties described in this Section that are made to the best of the
Representing Party's knowledge, if it is discovered by any of the Depositor, the
Master Servicer, the Seller or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, notwithstanding the
Representing Party's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.

         With respect to any Replacement Mortgage Loan or Loans, the Seller
delivering such Replacement Mortgage Loan shall deliver to the Trustee for the
benefit of the Certificateholders the related Mortgage Note, Mortgage and
assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the Seller delivering such Replacement
Loan on such Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Seller delivering such
Replacement Mortgage Loan shall be deemed to have made with respect to such
Replacement Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
to the Representing Party the Mortgage File relating to such Deleted Mortgage
Loan and held for the benefit of the Certificateholders and shall execute and
deliver at the Master Servicer's direction 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

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designee, title to the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.

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

         In the event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.08 on the Determination Date for the Distribution Date in the month
following the month during which such Seller became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of the Opinion of Counsel required by Section 2.05, if any, and the
receipt of a Request for Release in the form of Exhibit N hereto, the Trustee
shall release the related Mortgage File held for the benefit of the
Certificateholders to such Seller, and the Trustee shall execute and deliver at
such Person's direction the related instruments of transfer or assignment
prepared by such Seller, in each case without recourse, as shall be necessary to
transfer title from the Trustee for the benefit of the Certificateholders and
transfer the Trustee's interest to such Seller to any Mortgage Loan purchased
pursuant to this Section 2.03. It is understood and agreed that the obligation
under this Agreement of the Seller to cure, repurchase or replace any Mortgage
Loan as to which a breach has occurred and is continuing shall constitute the
sole remedy against the Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee.

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

         Section 2.04 Representations and Warranties of the Depositor.

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

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

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                  (ii) The Depositor has the full corporate power and authority
         to execute, deliver and perform, and to enter into and consummate the
         transactions contemplated by, this Agreement and has duly authorized,
         by all necessary corporate action on its part, the execution, delivery
         and performance of this Agreement; and this Agreement, assuming the due
         authorization, execution and delivery hereof by the other parties
         hereto, constitutes a legal, valid and binding obligation of the
         Depositor, enforceable against the Depositor in accordance with its
         terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
         reorganization, moratorium and other similar laws affecting creditors'
         rights generally and (ii) general principles of equity, regardless of
         whether enforcement is sought in a proceeding in equity or at law.

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

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

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

         The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the Closing Date 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.

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<PAGE>

         It is understood and agreed that the representations and warranties set
forth in the two immediately preceding paragraphs shall survive delivery of the
Mortgage Files to the Trustee. Upon discovery by the Depositor or the Trustee of
a breach of any of the foregoing representations and warranties set forth in the
immediately preceding paragraph (referred to herein as a "breach"), which breach
materially and adversely affects the interest of the Certificateholders, the
party discovering such breach shall give prompt written notice to the others and
to each Rating Agency. The Depositor hereby covenants with respect to the
representations and warranties made by it in this Section 2.04 that within 90
days of the earlier of the discovery it or receipt of written notice by it from
any party of a breach of any representation or warranty set forth herein made
that materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan, it shall cure such breach in all material respects and, if
such breach is not so cured, shall repurchase or replace the affected Mortgage
Loan or Loans in accordance with the procedure set forth in Section 2.03(c).

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

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

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

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         Section 2.06 Authentication and Delivery of Certificates.

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

         Section 2.07 Covenants of the Master Servicer.

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

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

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

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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

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<PAGE>

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

         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 Master Servicer may in its discretion (i) waive any late payment
charge or any Prepayment Charge or penalty

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<PAGE>

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

                  (iv) all Compensating Interest;

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

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

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

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

                  (ix) the Seller Shortfall Interest Requirement;

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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.

         (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.

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         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 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

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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;

                  (v) to pay the Master Servicer any unpaid Servicing Fees and
         to reimburse it for any unreimbursed Servicing Advances, the Master
         Servicer's

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

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                  (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.

         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

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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 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

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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.

         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

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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 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

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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 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

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3.08(a)(v) or this Section 3.12; second, to reimburse the Master Servicer for
any unreimbursed Advances, pursuant to Section 3.08(a)(ii) or this Section 3.12;
third, to accrued and unpaid interest (to the extent no Advance has been made
for such amount) on the Mortgage Loan or related REO Property, at the Net
Mortgage Rate to the Due Date occurring in the month in which such amounts are
required to be distributed; and fourth, as a recovery of principal of the
Mortgage Loan.

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

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

         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

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

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

         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

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

         Section 3.15 Servicing Compensation.

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

         Additional servicing compensation in the form of Excess Proceeds,
assumption fees, late payment charges, Prepayment Interest Excess, and all
income and gain net of any losses realized from Permitted Investments shall be
retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.05 or 3.12(a) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.10 hereof and maintenance of the other forms
of insurance coverage required by Section 3.10 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in Sections 3.08 and
3.12 hereof.

         Section 3.16 Access to Certain Documentation.

         The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates or
Certificate Owners and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. 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

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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, 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

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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.

         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

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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

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

         (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 Loan
                  Group 2, to the Class A-IO Certificates, the Current Interest
                  and any Interest Carry Forward Amount for such Class, with
                  such amount paid to the Class A-IO Certificates to be
                  allocated to the Interest Funds for Loan Group 1 and Loan
                  Group 2 pro rata, based on the related Interest Funds for the
                  Mortgage Loans in that Loan Group less amounts payable from
                  such Loan Group to the Class 1-A Certificates and Class 2-A
                  Certificates, respectively, as provided in clauses (B) and (C)
                  below, in each case calculated without regard to this clause
                  (A);

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                           (B) from the Interest Funds for Loan Group 1 (and
                  after the distribution of Interest Funds from Loan Group 2 as
                  provided in clauses (A) above and (C) 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

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

                  (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 M-7 Certificates, the Current Interest for such Class;

                  (ix) from the Interest Funds for both Loan Groups to the Class
         M-8 Certificates, the Current Interest for such Class;

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

                  (xi) 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

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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:

                  (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, to the Class 2-A Certificates, until
                  the Certificate Principal Balance thereof 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 to the Class 2-A Certificates until the
                  Certificate Principal Balance thereof is reduced to zero and
                  (y) after the Certificate Principal Balance of the Class 2-A
                  Certificates has 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;

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                           (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;

                           (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 M-7 Certificates, until the
                  Certificate Principal Balance thereof is reduced to zero;

                           (I) the remaining Principal Distribution Amount for
                  both Loan Groups, to the Class M-8 Certificates, until the
                  Certificate Principal Balance thereof is reduced to zero;

                           (J) 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

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

                  (ii) (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 to the Class 2-A
                  Certificates until the Certificate Principal Balance thereof
                  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 remaining Class 1-A Principal
                  Distribution Amount will be applied to the Class 2-A
                  Certificates, up to the amount of the Class 2-A Principal
                  Distribution Amount remaining undistributed, until the
                  Certificate Principal Balance thereof is reduced to zero and
                  (y) after the Certificate Principal Balance of the Class 2-A
                  Certificates has been reduced to zero, the Class 2-A Principal
                  Distribution Amount will be applied to the Class 1-A
                  Certificates, up to the amount of the Class 1-A Principal
                  Distribution Amount remaining undistributed, until the
                  Certificate Principal Balance thereof is reduced to zero;

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

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

                           (D) to the Class M-3 Certificates, the Class M-3
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero; (E) to the Class M-4
                  Certificates, the Class M-4 Principal Distribution Amount,
                  until the Certificate Principal Balance thereof is reduced to
                  zero;

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

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

                           (H) to the Class M-7 Certificates, the Class M-7
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

                           (I) to the Class M-8 Certificates, the Class M-8
                  Principal Distribution Amount, until the Certificate Principal
                  Balance thereof is reduced to zero;

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

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

         (e) With respect to any Distribution Date, any Excess Cashflow and
Corridor Contract Payment Amount will be paid to the classes of Certificates
after payment of any Seller Shortfall Interest Requirement, if any, 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, Class M-7, Class M-8 and Class B
         Certificates, in that order, in an amount equal to any Interest Carry
         Forward Amount for such Class or Classes;

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                  (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, Class M-7, Class M-8 and Class B
         Certificates, in that order, in an amount equal to the Unpaid Realized
         Loss Amounts for such Class or Classes;

                  (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 Certificates, until the Net Rate Carryover is
         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, Class M-7, Class M-8 and Class B Certificates, on a pro rata
         basis, based on the Certificate Principal Balances thereof, to the
         extent needed to pay any 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 Amounts as provided in
         clause (iv) above, to the Class 1-A, Class 2-A, Class M-1, Class M-2,
         Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and
         Class B Certificates, on a pro rata basis, based on the Certificate
         Principal Balances thereof, to the extent needed to pay any remaining
         Net Rate Carryover for each such class; provided that any 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 Amounts, if (x) the
         applicable Corridor Contracts have not been terminated or (y) on any
         Distribution Date on or after the applicable 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.

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

         (g) To the extent that a Class of Certificates (other than the Class
A-IO, 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-8 Certificates until the Class M-8
         Certificate Principal Balance is reduced to zero;

                  (iii) to the Class M-7 Certificates until the Class M-7
         Certificate Principal Balance is reduced to zero;

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

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

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

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

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

                  (ix) 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

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denominations of not less than $1,000,000 or evidencing a Percentage Interest
aggregating 10% or more with respect to such Class or, if not, by check mailed
by first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 9.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.

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

         Section 4.05 Monthly Statements to Certificateholders.

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

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

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

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

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

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

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                  (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;

                  (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-IO, 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-IO, 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 August 2004 Distribution Date, (A)
         the amount on deposit in the Pre-Funding Account (if any) on the
         related

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         Determination Date and (B) the aggregate Stated Principal Balances of
         the Subsequent Mortgage Loans for Subsequent Transfer Dates occurring
         during the related Due Period;

                  (xxi) with respect to the September 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;

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

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

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

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

         The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.

         Section 4.06 [Reserved]

         Section 4.07 [Reserved]

         Section 4.08 Carryover Reserve Fund.

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

         (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.

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

         (d) Upon termination of the Trust Fund, any amounts remaining in the
Carryover Reserve Fund shall be distributed to the Holders of the Class C
Certificates in the same manner as if distributed pursuant to Section 4.04(f)
hereof.

         Section 4.09 Distributions on the REMIC I Regular Interests.

                  (a) 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 A-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 and REMIC I Regular Interest LTP 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).

                  With respect to the Group II Mortgage Loans:
                  -------------------------------------------

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<PAGE>

                  (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).

                  (b) (1) 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:

                  first, to the Holders of REMIC II Regular Interest LT-IO1 and
REMIC II Regular Interest LT-IO2, in an amount equal to (A) the Uncertificated
Accrued Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates and second, to the
Holders of REMIC II Regular Interest LT-1, REMIC II Regular Interest LT-2, and
REMIC II Regular Interest LT-P, in an amount equal to (A) the Uncertificated
Accrued Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates;

                           (2) to the Holders of the REMIC II Regular Interest
II-LTP, on the Distribution Date immediately following the expiration of the
latest Prepayment Charge term as identified on the Mortgage Loan Schedule or any
Distribution Date thereafter until $100 has been distributed pursuant to this
clause;

                           (3) on each Distribution Date, the remainder of the
Available Funds for such Distribution Date after the distributions made pursuant
to clause (1) and clause (2) above, first, to the Holders of REMIC II Regular
Interest LT-1 and REMIC II Regular Interest L-T2, until the Uncertificated
Principal Balance of such REMIC II Regular Interest is reduced to zero, and
second, to the Holders of REMIC II Regular

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Interest LT-IO1 and REMIC II Regular Interest LT-IO2, until the Uncertificated
Principal Balance of each such REMIC II Regular Interest is reduced to zero; and

                           (4) to the Holders of the Class R Certificates (in
respect of the Class R-II Interest), any amounts remaining after the
distributions pursuant to clauses (1) through (3) above.

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

                  (i) first, (a) to the Holders of REMIC III Regular Interest
         LT-IO1 and REMIC III Regular Interest LT-IO2 , 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, then, to Holders of REMIC III Regular Interest
         LT-AA, REMIC III Regular Interest LT-1A, REMIC III Regular Interest
         LT-2A, REMIC III Regular Interest LT-M1, REMIC III Regular Interest
         LT-M2, REMIC III Regular Interest LT-M3, REMIC III Regular Interest
         LT-M4, REMIC III Regular Interest LT-M5, REMIC III Regular Interest
         LT-M6, REMIC III Regular Interest LT-M7, REMIC III Regular Interest
         LT-M8, REMIC III Regular Interest LT-B, REMIC III Regular Interest
         LT-ZZ and REMIC III Regular Interest LT-P, 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 III Regular Interest LT-ZZ shall be reduced and
         deferred when the REMIC III Overcollateralized Amount is less than the
         REMIC III Overcollateralization Target Amount, by the lesser of (x) the
         amount of such difference and (y) the REMIC III Regular Interest LT-ZZ
         Maximum Interest Deferral Amount and such amount will be payable to the
         Holders of REMIC III Regular Interest LT-1A, REMIC III Regular Interest
         LT-2A, REMIC III Regular Interest LT-M1, REMIC III Regular Interest
         LT-M2, REMIC III Regular Interest LT-M3, REMIC III Regular Interest
         LT-M4, REMIC III Regular Interest LT-M5, REMIC III Regular Interest
         LT-M6, REMIC III Regular Interest LT-M7, REMIC III Regular Interest
         LT-M8 and REMIC III 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 III Regular Interest LT-ZZ shall be increased by such amount; and

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

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<PAGE>

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

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

                  (b) 2.00% of such remainder, first, to the Holders of REMIC
         III Regular Interest LT-1A, REMIC III Regular Interest LT-2A, REMIC III
         Regular Interest LT-M1, REMIC III Regular Interest LT-M2, REMIC III
         Regular Interest LT-M3, REMIC III Regular Interest LT-M4, REMIC III
         Regular Interest LT-M5, REMIC III Regular Interest LT-M6, REMIC III
         Regular Interest LT-M7, REMIC III Regular Interest LT-M8 and REMIC III
         Regular Interest LT-B, 1.00% of and in the same proportion as principal
         payments are allocated to the Corresponding Certificates, until the
         Uncertificated Principal Balances of such REMIC III Regular Interests
         are reduced to zero and second, to the Holders of REMIC III 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 III Regular Interest is reduced to zero; then

                  (c) any remaining amount to the Holders of the Class AR
         Certificates (in respect of the Class R-III 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 III Regular Interest LT-AA and REMIC III Regular
Interest LT-P, in that order and (ii) REMIC III Regular Interest LT-ZZ,
respectively; provided that REMIC III 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 III 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 III to the Holders of REMIC III Regular Interest
LT-P. The

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payment of the foregoing amounts to the Holders of REMIC III Regular Interest
LT-P shall not reduce the Uncertificated Principal Balance thereof.

                  (ii) third, to the Holders of REMIC III Regular Interests, in
         an amount equal to the remainder of the REMIC III 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 III Regular Interests first, so as to keep the Uncertificated
         Principal Balance of each REMIC III Regular Interest ending with the
         designation "GRP" equal to 0.01% of the aggregate Stated Principal
         Balance of the Mortgage Loans in the related Group; second, to each
         REMIC III Regular Interest ending with the designation "SUB," so that
         the Uncertificated Principal Balance of each such REMIC III Regular
         Interest is equal to 0.01% of the excess of (x) the aggregate Stated
         Principal Balance of the 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 III Regular Interests such that the
         REMIC III Subordinated Balance Ratio is maintained); and third, any
         remaining principal to REMIC III 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.

         ALLOCATION OF REALIZED LOSSES ON THE REMIC II REGULAR INTERESTS.

         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 Distribution Date, 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 Distribution Date, 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.

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         All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date, first to REMIC II Regular Interest LT-1 and
REMIC II Regular Interest LT-2, until the Uncertificated Principal Balance of
each such REMIC II Regular Interest has been reduced to zero and then to REMIC
II Regular Interest LT-IO1 and REMIC II Regular Interest LT-IO2, , until the
Uncertificated Principal Balances have been reduced to zero.

         The REMIC III Marker Percentage of all Realized Losses on the Mortgage
Loans shall be allocated by the Trustee on each Distribution Date to the
following REMIC III Regular Interests in the specified percentages, as follows:
first, to Uncertificated Accrued Interest payable to the REMIC III Regular
Interest LT-AA and REMIC III Regular Interest LT-ZZ up to an aggregate amount
equal to the REMIC III Interest Loss Allocation Amount, 98% and 2%,
respectively; second, to the Uncertificated Principal Balances of the REMIC III
Regular Interest LT-AA and REMIC III Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC III Principal Loss Allocation Amount, 98% and 2%,
respectively; third, to the Uncertificated Principal Balances of REMIC III
Regular Interest LT-AA, REMIC III Regular Interest LT-B and REMIC III Regular
Interest LT-ZZ, 98%, 1.00% and 1%, respectively, until the Uncertificated
Principal Balances of REMIC III Regular Interest LT-B has been reduced to zero;
fourth to the Uncertificated Principal Balances of REMIC III Regular Interest
LT-AA, REMIC III Regular Interest LT-M8 and REMIC III Regular Interest LT-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC III Regular Interest LT-M8 has been reduced to zero; fifth to the
Uncertificated Principal Balances of REMIC III Regular Interest LT-AA, REMIC III
Regular Interest LT-M7 and REMIC III Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC III Regular
Interest LT-M7 has been reduced to zero; sixth to the Uncertificated Principal
Balances of REMIC III Regular Interest LT-AA, REMIC III Regular Interest LT-M6
and REMIC III Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC III Regular Interest LT-M6 has been
reduced to zero; seventh to the Uncertificated Principal Balances of REMIC III
Regular Interest LT-AA, REMIC III Regular Interest LT-M5 and REMIC III Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC III Regular Interest LT-M5 has been reduced to zero; eighth to
the Uncertificated Principal Balances of REMIC III Regular Interest LT-AA, REMIC
III Regular Interest LT-M4 and REMIC III Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC III Regular
Interest LT-M4 has been reduced to zero; ninth to the Uncertificated Principal
Balances of REMIC III Regular Interest LT-AA, REMIC III Regular Interest LT-M3
and REMIC III Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC III Regular Interest LT-M3 has been
reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC III
Regular Interest LT-AA, REMIC III Regular Interest LT-M2 and REMIC III Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC III Regular Interest LT-M2 has been reduced to zero and
eleventh, to the Uncertificated Principal Balances of REMIC III Regular Interest
LT-AA, REMIC III Regular Interest LT-M1 and REMIC III Regular Interest LT-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC III Regular Interest LT-M1 has been reduced to zero.

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<PAGE>

         The REMIC III 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 III
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 III Regular Interest ending with the designation "SUB," so
that the Uncertificated Principal Balance of each such REMIC III Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal
Balance of the 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 III Regular
Interests such that the REMIC III Subordinated Balance Ratio is maintained); and
third, any remaining Realized Losses shall be allocated to REMIC III Regular
Interest LT-XX.

         Section 4.10 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.

         Section 4.11 Excess Net WAC Rate Reserve Fund

         The Trustee shall establish and maintain in its name, in trust for the
benefit of the Holders of the Certificates, the Excess Net WAC Rate Reserve
Fund. The Excess Net WAC Rate 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.

         On each Distribution Date as to which there is an Excess Pool Net WAC
Amount payable on the Class 1-A, Class 2-A or Subordinate Certificates, the
Trustee has been directed by the holders of such Certificates to, and therefore
shall, deposit into the Excess Net WAC Reserve Fund, the Excess Pool Net WAC
Amount, rather than distributing such amounts to the Class A-IO
Certificateholders. On each such Distribution Date, the Trustee shall hold all
such amounts for the benefit of the Holders of the applicable Class 1-A, Class
2-A or Subordinate Certificates, and shall distribute such amounts to the
Holders of the applicable Class 1-A, Class 2-A or Subordinate Certificates to
the extent of the Excess Pool Net WAC Amount.

         For federal and state income tax purposes, the Class A-IO
Certificateholders will be deemed to be the owners of the Excess Net WAC Reserve
Fund The Excess Net WAC Rate Reserve Fund shall be part of the Trust Fund but
not part of any REMIC and any payments to the Holders of the Class 1-A, Class
2-A or Subordinate Certificates of Excess Group Net WAC Amounts will not be
payments with respect to a "regular interest" in a REMIC within the meaning of
Code Section 860(G)(a)(1).

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<PAGE>

         By accepting a Class A-IO Certificate, such Certificateholders hereby
agree to direct the Trustee, and the Trustee hereby is directed, to deposit into
the Excess Net WAC Rate Reserve Fund the amounts described above on each
Distribution Date as to which there is any Excess Pool Net WAC Amount rather
than distributing such amounts to the Class A-IO Certificateholders. By
accepting a Class A-IO Certificate, each such Certificateholder further agrees
that such direction is given for good and valuable consideration, the receipt
and sufficiency of which is acknowledged by such acceptance.

         Amounts on deposit in the Excess Net WAC Rate Reserve fund will remain
uninvested.

         For federal tax return and information reporting, the right of the
Class 1-A, Class 2-A or Subordinate Certificateholders to receive payments from
the Excess Net WAC Rate Reserve Fund in respect of any Excess Pool Net WAC
Amount shall be assigned a value of zero.

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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>
                                                          Integral Multiples in      Original Certificate
           Class               Minimum Denomination         Excess of Minimum          Principal Balance
           -----               --------------------         -----------------          -----------------
<S>                                 <C>                        <C>                     <C>
1-A                                 $    20,000                $     1,000             $ 350,700,000.00
2-A                                 $    20,000                $     1,000             $ 108,550,000.00
A-IO                                $    20,000                $     1,000             $ 350,000,000.00(1)
A-R                                 $    99.95(2)                      N/A             $         100.00
M-1                                 $    20,000                $     1,000             $  17,600,000.00
M-2                                 $    20,000                $     1,000             $  17,325,000.00
M-3                                 $    20,000                $     1,000             $   9,900,000.00
M-4                                 $    20,000                $     1,000             $   9,900,000.00
M-5                                 $    20,000                $     1,000             $   8,800,000.00
M-6                                 $    20,000                $     1,000             $   7,700,000.00
M-7                                 $    20,000                $     1,000             $   7,975,000.00
M-8                                 $    20,000                $     1,000             $   6,050,000.00
B                                   $    20,000                $     1,000             $   5,500,000.00
C                                       20%                        1%                  $           0.00
P                                       20%                        1%                  $         100.00
</TABLE>

(1) Notional Amount.

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

         The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date

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<PAGE>

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

                                      136
<PAGE>

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

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<PAGE>

of the Trustee, the Seller, the Depositor and the Master Servicer, and on which
they may rely, which opinion of counsel shall not be an expense of either the
Trustee or the Trust Fund, addressed to the Trustee to the effect that the
purchase and holding of such ERISA-Restricted Certificate is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Depositor, the Seller, the Master Servicer or Trustee to any
obligation, or liability (including liabilities or obligations under ERISA or
Section 4975 of the Code) in addition to those expressly undertaken in this
Agreement or to any liability. For purposes of the preceding sentence, with
respect to an ERISA-Restricted Certificate that is not a Book-Entry Certificate
or a Class A-R Certificate, in the event the representation letter referred to
in the preceding sentence is not so furnished, such representation shall be
deemed to have been made to the Trustee by the transferee's (including an
initial acquiror's) acceptance of such ERISA-Restricted Certificate.
Notwithstanding anything else to the contrary herein, any purported transfer of
an ERISA-Restricted Certificate or a Subordinate Certificate to or on behalf of
an employee benefit plan subject to ERISA or the Code other than as described
above shall be void and of no effect. Any purported beneficial owner whose
acquisition or holding of the Certificate or interest therein was effected in
violation of the conditions described in this paragraph shall indemnify and hold
harmless the Depositor, the Trustee, the Master Servicer, the Seller, any
Subservicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by those parties as a result of that acquisition or
holding.

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

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

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

                  (ii) No Ownership Interest in a Class A-R Certificate may be
         registered on the Closing Date or thereafter transferred, and the
         Trustee shall not register the Transfer of any Class A-R Certificate
         unless, in addition to the representation letters required to be
         delivered to the Trustee under subparagraph

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<PAGE>

         (b) above, the Trustee shall have been furnished with an affidavit (a
         "Transfer Affidavit") of the initial owner or the proposed transferee
         in the form attached hereto as Exhibit I.

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

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Class A-R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Class A-R Certificate in violation of the
         provisions of this Section 5.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Class A-R
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Class A-R Certificate that is in fact
         not permitted by Section 5.02(b) and this Section 5.02(c) or for making
         any payments due on such Certificate to the Holder thereof or taking
         any other action with respect to such Holder under the provisions of
         this Agreement so long as the Transfer was registered after receipt of
         the related Transfer Affidavit, Transferor Certificate and either the
         Rule 144A Letter or the Investment Letter. The Trustee shall be
         entitled but not obligated to recover from any Holder of a Class A-R
         Certificate that was in fact not a Permitted Transferee at the time it
         became a Holder or, at such subsequent time as it became other than a
         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

                                      139
<PAGE>

a REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Class A-R
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Class A-R
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Class A-R Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.

         (d) The preparation and delivery of all representation letters and
opinions referred to above in this Section 5.02 in connection with any Transfers
shall be at the expense of the parties to such Transfers.

         Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.

         If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Master Servicer and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. 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

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<PAGE>

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

         Section 5.06 Book-Entry Certificates.

         The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
5.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 5.08:

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

         (b) the Depositor, the Seller, the Master Servicer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of 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;

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<PAGE>

         (f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and

         (g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.

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

         Section 5.07 Notices to Depository.

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

         Section 5.08 Definitive Certificates.

         If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor advises the Trustee that the Depository is no
longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor, or (b) after the occurrence
and continuation of an Event of Default, Certificate Owners of such Book-Entry
Certificates having not less than 51% of the Voting Rights evidenced by any
Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Certificates, 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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         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 any breach of representations or

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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

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Master Servicer shall use its reasonable best efforts to obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.

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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 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

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

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

         In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is

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

         Section 7.03 Notification to Certificateholders.

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

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

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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;

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         (iii) the Trustee shall not be liable, individually or as Trustee, with
respect to any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of Holders of each Class of Certificates
evidencing not less than 25% of the Voting Rights of such Class relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee under
this Agreement; and

         (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;

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

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

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

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

                  (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 Depositor, the Seller and the

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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

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have the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 8.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.08.

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

         (i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Master Servicer, shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Trustee;

         (ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and

         (iii) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of 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

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information returns; (j) maintain records relating to each REMIC created
hereunder, including but not limited to the income, expenses, assets and
liabilities of each such REMIC, and the fair market value and adjusted basis of
the Trust Fund property determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (k) as and when necessary and appropriate,
represent the Trust Fund in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC created hereunder,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of the Trust Fund, and otherwise
act on behalf of any REMIC created hereunder in relation to any tax matter
involving any such REMIC.

         In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors, omissions or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.

         In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
Trust Fund pursuant to Sections 23153 and 24872 of the California Revenue and
Taxation Code if not paid as otherwise provided for herein, such tax shall be
paid by (i) the Trustee, if any such other tax arises out of or results from a
breach by the Trustee of any of its obligations under this Agreement, (ii) (x)
the Master Servicer, in the case of any such minimum tax, and (y) any party
hereto (other than the Trustee) to the extent any such other tax arises out of
or results from a breach by such other party of any of its obligations under
this Agreement or (iii) in all other cases, or in the event that any liable
party here fails to honor its obligations under the preceding clauses (i) or
(ii), any such tax will be paid first with amounts otherwise to be distributed
to the Class A-R Certificateholders , and second with amounts otherwise to be
distributed to all other Certificateholders in the following order of priority:
first, to the Class B Certificates (pro rata), second, to the Class M-8
Certificates (pro rata), third, to the Class M-7 Certificates (pro rata),
fourth, to the Class M-6 Certificates (pro rata), fifth, to the Class M-5
Certificates (pro rata), sixth, to the Class M-4 Certificates (pro rata),
seventh, to the Class M-3 Certificates (pro rata), eighth, to the Class M-2
Certificates (pro

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rata), ninth, to the Class M-1 Certificates (pro rata), and tenth, 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 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, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8
and Class B Certificateholders to receive payments from the Carryover Reserve
Fund as rights in 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-IO, Class A-R, Class C and Class P
Certificates). Thus, each Certificate (other than the Class A-IO, 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 $354,000.00, $108,000.00 and $230,000.00 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

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upon presentation and surrender of the related Certificates at the Corporate
Trust Office of the Trustee. If the Master Servicer elects to terminate the
Trust Fund pursuant to clause (a) of Section 9.01, at least 5 days prior to the
date 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

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remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets that remain a part
of the Trust Fund. If within one year after the second notice all related
Certificates shall not have been surrendered for cancellation, the Class A-R
Certificates shall be entitled to all unclaimed funds and other assets that
remain subject hereto.

         Section 9.03 Additional Termination Requirements.

         (a) In the event the Master Servicer exercises its purchase option on
the Mortgage Loans, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with an
Opinion of Counsel, at the expense of the Master Servicer, to the effect that
the failure of the Trust Fund to comply with the 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

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the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in (i), without the consent of the Holders of Certificates of such
Class evidencing 66% or more of the Voting Rights of such Class, or (iii) reduce
the aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment without the consent of the Holders of all such
Certificates then outstanding.

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

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

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

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

         Section 10.02 Recordation of Agreement; Counterparts.

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

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

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<PAGE>

         Section 10.03 Governing Law.

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

         Section 10.04 Intention of Parties.

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

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

         Section 10.05 Notices.

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

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

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

                                      166
<PAGE>

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

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

                  (v) The final payment to Certificateholders.

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

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

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

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

         (b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when sent by facsimile transmission,
first class mail or delivered to (i) in the case of the Depositor, CWABS, Inc.,
4500 Park Granada, Calabasas, California 91302, Attention: Josh Adler, with a
copy to the same address, Attention: Legal Department; (ii) in the case of the
Seller, Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas, California
91302, Attention: Josh Adler, with a copy to the same address, Attention: Legal
Department, or such other address as may be hereafter furnished to the Depositor
and the Trustee by the Master Servicer in writing; (iii) in the case of the
Master Servicer, Countrywide Home Loans Servicing LP, 400 Countrywide Way, Simi
Valley, California 93065, Attention: Mark Wong or such other address as may be
hereafter furnished to the Depositor and the Trustee by the Master Servicer in
writing; (iv) in the case of the Trustee, The Bank of New York, 101 Barclay
Street, New York, New York 10286 Attention: Corporate Trust MBS Administration,
CWABS, Series 2004-ECC2, 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, and (y) 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.

         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

                                      167
<PAGE>

or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.

         Section 10.07 Assignment.

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

         Section 10.08 Limitation on Rights of Certificateholders.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

                                      168
<PAGE>

         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.

                                      * * *

                                      169
<PAGE>

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

                                           CWABS, INC.,
                                           as Depositor

                                           By: /s/ Ruben Avilez
                                              ---------------------------------
                                           Name:   Ruben Avilez
                                           Title:  Vice President

                                           COUNTRYWIDE HOME LOANS, INC.,
                                           as Seller

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

                                           COUNTRYWIDE HOME LOANS SERVICING LP,
                                           as Master Servicer

                                           By:      COUNTRYWIDE GP, INC.

                                           By: /s/ Ruben Avilez
                                              ---------------------------------
                                           Name:   Ruben Avilez
                                           Title:  Senior Vice President

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

                                           By: /s/ Maria Tokarz
                                              ---------------------------------
                                           Name:   Maria Tokarz
                                           Title:  Assistant Treasurer

                                      170
<PAGE>

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

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

                                      171
<PAGE>

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

         On this 29th day of July, 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]

                                      172
<PAGE>

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

         On this 29th day of July 2004, before me, a notary public in and for
said State, appeared Ruben Avilez, personally known to me on the basis of
satisfactory evidence to be a 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]

                                      173
<PAGE>

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

         On this 29th day of July, 2004, before me, a notary public in and for
said State, appeared Ruben Avilez, personally known to me on the basis of
satisfactory evidence to be a Vice President of CWABS, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation and acknowledged to me that
such corporation executed the within instrument.

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

                                                __________________________
                                                       Notary Public

[Notarial Seal]

                                      174
<PAGE>

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

         On this 29th day of July, 2004, before me, a notary public in and for
said State, appeared ____________________, personally known to me on the basis
of satisfactory evidence to be a 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

                                      175
<PAGE>

                                                                     Exhibit A-1

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

                [See appropriate documents delivered at closing]

                                      A-1
<PAGE>

                                                                     Exhibit A-2

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

                [See appropriate documents delivered at closing.]

                                       A-2
<PAGE>

                                                                     Exhibit A-3

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

                [See appropriate documents delivered at closing.]

                                      A-3
<PAGE>

                                                                     Exhibit A-4

                           Exhibit A-4 is a photocopy
                         of the Class M-1 Certificate as
                                   delivered.

                [See appropriate documents delivered at closing]

                                       A-4
<PAGE>

                                                                     Exhibit A-5

                           Exhibit A-5 is a photocopy
                          of the Class M-2 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                       A-5
<PAGE>

                                                                     Exhibit A-6

                           Exhibit A-6 is a photocopy
                          of the Class M-3 Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      A-6
<PAGE>

                                                                     Exhibit A-7

                           Exhibit A-7 is a photocopy
                          of the Class M-4 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      A-7
<PAGE>

                                                                     Exhibit A-8

                           Exhibit A-8 is a photocopy
                          of the Class M-5 Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      A-8
<PAGE>

                                                                     Exhibit A-9

                           Exhibit A-9 is a photocopy
                          of the Class M-6 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      A-9
<PAGE>

                                                                    Exhibit A-10

                           Exhibit A-10 is a photocopy
                          of the Class M-7 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      A-10
<PAGE>

                                                                    Exhibit A-11

                           Exhibit A-11 is a photocopy
                          of the Class M-8 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      A-11
<PAGE>

                                                                    Exhibit A-12

                           Exhibit A-12 is a photocopy
                           of the Class B Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      A-12
<PAGE>

                                                                       Exhibit B

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

                [See appropriate documents delivered at closing]

                                      B-1
<PAGE>

                                                                       Exhibit C

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

                [See appropriate documents delivered at closing]

                                      C-1
<PAGE>

                                                                     Exhibit D-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 July 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-ECC2

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 July 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-ECC2

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>

            ECC2,  CWABS,  Inc.,  by The Bank of New  York,  a New York  banking
            corporation,  as trustee under the Pooling and  Servicing  Agreement
            dated as of July 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 July 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-ECC2

Gentlemen:

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

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

      (ii)  in the case of each Mortgage Loan that is not a MERS Mortgage  Loan,
            a  duly  executed   assignment  of  the  Mortgage  to  "Asset-Backed
            Certificates,  Series  2004-ECC2,  CWABS,  Inc.,  by The Bank of New
            York, a New York banking  corporation,  as trustee under the Pooling
            and Servicing Agreement dated as of July 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).

                                     G-3-1
<PAGE>

      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 July 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-ECC2

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,  sufficiency,  enforceability
or genuineness of any of the documents contained in each Mortgage

                                       G-4
<PAGE>

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-3-2
<PAGE>

                                    EXHIBIT H

                     FORM OF FINAL CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Master Servicer]

[Seller]

      Re:   Pooling  and  Servicing  Agreement  dated  as of July 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-ECC2

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-ECC2,

                                      H-1
<PAGE>

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

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

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

      (vi) the  original  or  duplicate  original  lender's  title  policy  or a
printout of the  electronic  equivalent  and all riders thereto or any one of an
original title binder, an original preliminary title report or an original title
commitment, or a copy thereof certified by the title company.

      If the public recording  office in which a Mortgage or assignment  thereof
is recorded  has  retained  the  original of such  Mortgage or  assignment,  the
Trustee  has  received,  in lieu  thereof,  a copy of the  original  Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.

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

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

                                      H-2
<PAGE>

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

                                     The Bank of New York,
                                          as Trustee

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

                                      H-3
<PAGE>

                                    EXHIBIT I

                               TRANSFER AFFIDAVIT

STATE OF                     )
                             )    ss.:
COUNTY OF                    )

      The undersigned, being first duly sworn, deposes and says as follows:

      1. The undersigned is an officer of __________, the proposed transferee of
an Ownership  Interest in a Class A-R  Certificate  (the  "Certificate")  issued
pursuant to the Pooling and Servicing  Agreement,  dated as of July 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

                                      I-1
<PAGE>

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

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

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

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

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

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

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

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

                                      * * *

                                      I-2
<PAGE>

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

                                     [NAME OF TRANSFEREE]

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

[Corporate Seal]

ATTEST:

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

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

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

                                           -----------------------------
                                                   NOTARY PUBLIC

                                           My Commission expires the ___ day of
                                           ___________________, 20__.

                                      I-3
<PAGE>

                                                                       EXHIBIT 1

                               Certain Definitions

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

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

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

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

                                       I-4
<PAGE>

Section 5.02(c) of the Agreement

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

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

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

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

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

                                      I-5
<PAGE>

      made on such Class A-R Certificate at and after either such time. Any such
      payments so  recovered by the Trustee  shall be paid and  delivered by the
      Trustee to the last preceding Permitted Transferee of such Certificate.

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

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

                                       I-6
<PAGE>

                                   EXHIBIT J-1

                       FORM OF TRANSFEROR CERTIFICATE FOR
                             CLASS A-R CERTIFICATES

                                                                Date:

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

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

            Re:   CWABS, Inc. Asset-Backed
                  Certificates, Series 2004-ECC2

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 July 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-ECC2, 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 July 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-ECC2, Class [  ]

Ladies and Gentlemen:

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

                                       K-1
<PAGE>

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

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

                                         Very truly yours,

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

                                         By:
                                            -------------------------------
                                              Authorized Officer

                                       K-2
<PAGE>

                                    EXHIBIT L

                            FORM OF RULE 144A LETTER

                                                              Date:

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

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

            Re:   CWABS, Inc. Asset-Backed Certificates,
                  Series 2004-ECC2, Class [  ]

Ladies and Gentlemen:

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

                                      L-1
<PAGE>

Securities  Act or that  would  render the  disposition  of the  Certificates  a
violation of Section 5 of the  Securities Act or require  registration  pursuant
thereto,  nor will act, nor has  authorized or will authorize any person to act,
in  such  manner  with  respect  to the  Certificates,  (f) we are a  "qualified
institutional  buyer" as that term is defined in Rule 144A under the  Securities
Act and have  completed  either of the  forms of  certification  to that  effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A.  We are acquiring  the  Certificates  for our own
account or for resale  pursuant to Rule 144A and further,  understand  that such
Certificates  may be  resold,  pledged  or  transferred  only  (i)  to a  person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the  resale,  pledge or transfer is being made in reliance on Rule
144A,  or (ii)  pursuant  to  another  exemption  from  registration  under  the
Securities Act.

      All  capitalized  terms used herein but not defined  herein shall have the
meanings  assigned to them in the Pooling and  Servicing  Agreement  dated as of
July 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.

                                       L-4
<PAGE>

However,  such  securities  were not included if the Buyer is a  majority-owned,
consolidated  subsidiary  of  another  enterprise  and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934, as amended.

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

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

                                             -----------------------------------
                                                     Print Name of Buyer

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

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

                                       L-5
<PAGE>

                                                            ANNEX 2 TO EXHIBIT L

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That are Registered Investment Companies]

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

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

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

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

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

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

                                      L-6
<PAGE>

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

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

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

                                           -----------------------------------
                                             Print Name of Buyer or Adviser

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

                                           IF AN ADVISER:

                                           ------------------------------------
                                                    Print Name of Buyer

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

                                       L-7
<PAGE>

                                    EXHIBIT M

                               REQUEST FOR RELEASE
                                  (for Trustee)

Loan Information
         Name of Mortgagor:
                                           -------------------------------------
         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-ECC2,  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 July 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-ECC2

__________________________________________  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 July
1, 2004 (the "Pooling and  Servicing  Agreement"),  relating to the CWABS,  Inc.
Asset-Backed  Certificates,  Series 2004-ECC2  (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  Principal  Balance is as close as possible or to
equal to the Subsequent Transfer Date Aggregate Purchase

                                      Q-1
<PAGE>

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 ____,
2004.

      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>

                                    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  Transaction shall  supplement,  form part of and be subject to the
Assignee Swap Agreement (as

                                      S-1
<PAGE>

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
      (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,

                                      S-2
<PAGE>

            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
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.

                                      S-3
<PAGE>

      (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.

      (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.

                                      S-4
<PAGE>

      (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 "____" 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.

                                      S-5
<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: _____________________

                                       S-6
<PAGE>

                                    EXHIBIT T

                OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS

                           ASSET-BACKED CERTIFICATES,
                                Series 2004-ECC2

                                     [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 July
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

                                      T-1
<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:

                                       T-2
<PAGE>

         SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
                      DURING THE RELATED PREPAYMENT PERIOD

------------------------- ---------------------------- -------------------------
LOAN NUMBER               CLAUSE 2:  YES/NO            CLAUSE 3:  (I) OR (II)
------------------------- ---------------------------- -------------------------

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

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

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

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

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

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

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

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

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

                                      T-3
<PAGE>

         APPENDIX U: Standard & Poor's Predatory Lending Categorization

         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>
<S>                                                  <C>
-----------------------------------------------------------------------------------------------------------------------
                                    STANDARD & POOR'S HIGH-COST LOAN CATEGORIZATION

-----------------------------------------------------------------------------------------------------------------------
STATE/JURISDICTION                                   CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
-----------------------------------------------------------------------------------------------------------------------
Arkansas                                             High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Cleveland Heights, Ohio                              Covered Loan
-----------------------------------------------------------------------------------------------------------------------
Colorado                                             Covered Loan
-----------------------------------------------------------------------------------------------------------------------
Connecticut                                          High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
District of Columbia                                 Covered Loan
-----------------------------------------------------------------------------------------------------------------------
Florida                                              High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - March 6, 2003)               High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Georgia as amended (March 7, 2003 - current)         High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
HOEPA Section 32                                     High Cost Loan
-----------------------------------------------------------------------------------------------------------------------
Illinois                                             High Risk Home Loan
-----------------------------------------------------------------------------------------------------------------------
Kansas                                               High Loan-to-Value Consumer Loans and High APR Consumer Loans
-----------------------------------------------------------------------------------------------------------------------
Kentucky                                             High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Los Angeles, Calif.                                  High Cost Refinance Home Loan
-----------------------------------------------------------------------------------------------------------------------
Maine                                                High Rate High Fee Mortgage
-----------------------------------------------------------------------------------------------------------------------
Massachusetts                                        High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Nevada                                               Home Loan
-----------------------------------------------------------------------------------------------------------------------
New Jersey                                           High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
New York                                             High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
New Mexico                                           High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
North Carolina                                       High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Oakland, Calif.                                      High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
Ohio                                                 Covered Loan
-----------------------------------------------------------------------------------------------------------------------
Oklahoma                                             Subsection 10 Mortgage
-----------------------------------------------------------------------------------------------------------------------
South Carolina                                       High Cost Home Loan
-----------------------------------------------------------------------------------------------------------------------
West Virginia                                        West Virginia Mortgage Loan Act Loan
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       T-4
<PAGE>

<TABLE>
<S>                                                  <C>
------------------------------------------------------------------------------------------------------------------------
                                     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
------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                                  <C>
------------------------------------------------------------------------------------------------------------------------
                                       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>

                                       T-5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]