Document:

BEAR STEARNS ASSET BACKED SECURITIES I LLC,

                                    Depositor

                            EMC MORTGAGE CORPORATION,

                               Seller and Company

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,

                  Master Servicer and Securities Administrator

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,

                                     Trustee
                              --------------------

                         POOLING AND SERVICING AGREEMENT

                            Dated as of July 1, 2004
                    ----------------------------------------

              BEAR STEARNS ASSET BACKED SECURITIES I TRUST 2004-AC4

                   ASSET-BACKED CERTIFICATES, SERIES 2004-AC4

<PAGE>

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

                                    ARTICLE I

                                   DEFINITIONS
Section 1.01   Defined Terms.................................................-5-
Section 1.02   Allocation of Certain Interest Shortfalls....................-46-

                                   ARTICLE II

                            CONVEYANCE OF TRUST FUND
                         REPRESENTATIONS AND WARRANTIES
Section 2.01   Conveyance of Trust Fund.....................................-48-
Section 2.02   Acceptance of the Mortgage Loans.............................-50-
Section 2.03   Representations, Warranties and Covenants of the Company,
               the Master Servicer and the Seller...........................-52-
Section 2.04   Representations and Warranties of the Depositor..............-57-
Section 2.05   Delivery of Opinion of Counsel in Connection with
               Substitutions and Repurchases................................-59-
Section 2.06   Countersignature and Delivery of Certificates................-59-

                                   ARTICLE III

          ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY
Section 3.01   The Company..................................................-61-
Section 3.02   Due-on-Sale Clauses; Assumption Agreements...................-62-
Section 3.03   Subservicers.................................................-63-
Section 3.04   Documents, Records and Funds in Possession of Company
               To Be Held for Trustee.......................................-64-
Section 3.05   Maintenance of Hazard Insurance..............................-64-
Section 3.06   Presentment of Claims and Collection of Proceeds.............-65-
Section 3.07   Maintenance of the Primary Mortgage Insurance Policies.......-65-

                                                      i

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Section 3.08   Fidelity Bond, Errors and Omissions Insurance................-66-
Section 3.09   Realization Upon Defaulted Mortgage Loans; Determination
               of Excess Liquidation Proceeds and Realized Losses;
               Repurchases of Certain Mortgage Loans........................-66-
Section 3.10   Servicing Compensation.......................................-69-
Section 3.11   REO Property.................................................-69-
Section 3.12   Liquidation Reports..........................................-70-
Section 3.13   Annual Certificate as to Compliance..........................-70-
Section 3.14   Annual Independent Certified Public Accountants'
               Servicing Report.............................................-71-
Section 3.15   Books and Records............................................-71-

                                   ARTICLE IV

         ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
                                    SERVICER
Section 4.01   Master Servicer..............................................-73-
Section 4.02   REMIC-Related Covenants......................................-74-
Section 4.03   Monitoring of Company and Servicer...........................-74-
Section 4.04   Fidelity Bond................................................-75-
Section 4.05   .............................................................-75-
Section 4.06   Due-on-Sale Clauses; Assumption Agreements...................-76-
Section 4.07   Release of Mortgage Files....................................-76-
Section 4.08   Documents, Records and Funds in Possession of Master
               Servicer, Company and Servicer To Be Held for Trustee........-77-
Section 4.09   Standard Hazard Insurance and Flood Insurance Policies.......-78-
Section 4.10   Presentment of Claims and Collection of Proceeds.............-79-
Section 4.11   Maintenance of the Primary Mortgage Insurance Policies.......-79-
Section 4.12   Trustee to Retain Possession of Certain Insurance
               Policies and Documents.......................................-80-
Section 4.13   Realization Upon Defaulted Mortgage Loans....................-80-
Section 4.14   Compensation for the Master Servicer.........................-80-
Section 4.15   REO Property.................................................-80-
Section 4.16   Annual Officer's Certificate as to Compliance................-81-
Section 4.17   Annual Independent Accountant's Servicing Report.............-82-
Section 4.18   Reports Filed with Securities and Exchange Commission........-82-
Section 4.19   EMC..........................................................-83-
Section 4.20   UCC..........................................................-83-
Section 4.21   Optional Purchase of Certain Mortgage Loans..................-83-

                                                     ii

<PAGE>

                                    ARTICLE V

                                    ACCOUNTS
Section 5.01   Collection of Mortgage Loan Payments; Protected Account......-85-
Section 5.02   Permitted Withdrawals From the Protected Account.............-87-
Section 5.02A  Reports to Master Servicer...................................-88-
Section 5.03   Collection of Taxes; Assessments and Similar Items;
               Escrow Accounts..............................................-89-
Section 5.04   Servicer Protected Accounts..................................-90-
Section 5.05   Master Servicer Collection Account...........................-91-
Section 5.06   Permitted Withdrawals and Transfers from the Master
               Servicer Collection Account..................................-92-
Section 5.07   Distribution Account.........................................-93-
Section 5.08   Permitted Withdrawals and Transfers from the
               Distribution Account.........................................-94-

                                   ARTICLE VI

                           DISTRIBUTIONS AND ADVANCES

Section 6.01   Advances.....................................................-97-
Section 6.02   Compensating Interest Payments...............................-98-
Section 6.03   REMIC Distributions..........................................-98-
Section 6.04   Distributions................................................-98-
Section 6.04A  Allocation of Realized Losses...............................-101-
Section 6.05   Monthly Statements to Certificateholders....................-103-
Section 6.06   REMIC  Designations and REMIC I Distributions...............-106-
Section 6.09   Class P Certificate Account.................................-109-

                                   ARTICLE VII

                                THE CERTIFICATES
Section 7.01   The Certificates............................................-110-
Section 7.02   Certificate Register; Registration of Transfer and
               Exchange of Certificates....................................-111-
Section 7.03   Mutilated, Destroyed, Lost or Stolen Certificates...........-115-
Section 7.04   Persons Deemed Owners.......................................-115-
Section 7.05   Access to List of Certificateholders' Names and Addresses...-115-
Section 7.06   Book-Entry Certificates.....................................-115-
Section 7.07   Notices to Depository.......................................-116-
Section 7.08   Definitive Certificates.....................................-117-
Section 7.09   Maintenance of Office or Agency.............................-117-

                                       iii

<PAGE>

                                  ARTICLE VIII

                       THE COMPANY AND THE MASTER SERVICER
Section 8.01   Liabilities of the Depositor, the Company and the
               Master Servicer.............................................-118-
Section 8.02   Merger or Consolidation of the Depositor, the Company or
               the Master Servicer.........................................-118-
Section 8.03   Indemnification of the Trustee, the Master Servicer and
               the Securities Administrator................................-118-
Section 8.04   Limitations on Liability of the Depositor, the Company,
               the Master Servicer and Others..............................-119-
Section 8.05   Master Servicer and Company Not to Resign...................-120-
Section 8.06   Successor Master Servicer...................................-121-
Section 8.07   Sale and Assignment of Master Servicing.....................-121-

                                   ARTICLE IX

                    DEFAULT; TERMINATION OF MASTER SERVICER;
                             TERMINATION OF COMPANY

Section 9.01   Events of Default...........................................-123-
Section 9.02   Trustee to Act; Appointment of Successor....................-124-
Section 9.03   Notification to Certificateholders..........................-126-
Section 9.04   Waiver of Defaults..........................................-126-
Section 9.05   Company Default.............................................-127-
Section 9.06   Waiver of Company Defaults..................................-128-

                                    ARTICLE X

             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 10.01  Duties of Trustee and Securities Administrator..............-129-
Section 10.02  Certain Matters Affecting the Trustee and the
               Securities Administrator....................................-131-

                                       iv

<PAGE>

Section 10.03  Trustee and Securities Administrator Not Liable for
               Certificates or Mortgage Loans..............................-132-
Section 10.04  Trustee and Securities Administrator May Own Certificates...-133-
Section 10.05  Trustee's and Securities Administrator's Fees and Expenses..-133-
Section 10.06  Eligibility Requirements for Trustee and Securities
               Administrator...............................................-134-
Section 10.07  Insurance...................................................-134-
Section 10.08  Resignation and Removal of Trustee and Securities
               Administrator...............................................-134-
Section 10.09  Successor Trustee or Securities Administrator...............-136-
Section 10.10  Merger or Consolidation of Trustee or Securities
               Administrator...............................................-136-
Section 10.11  Appointment of Co-Trustee or Separate Trustee...............-136-
Section 10.12  Tax Matters.................................................-138-

                                   ARTICLE XI

                                   TERMINATION
Section 11.01  Termination upon Liquidation or Repurchase of
               all Mortgage Loans..........................................-141-
Section 11.02  Final Distribution on the Certificates......................-141-
Section 11.03  Additional Termination Requirements.........................-143-

                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS
Section 12.01  Amendment...................................................-144-
Section 12.02  Recordation of Agreement; Counterparts......................-145-
Section 12.03  Governing Law...............................................-145-
Section 12.04  Intention of Parties........................................-146-
Section 12.05  Notices.....................................................-146-
Section 12.06  Severability of Provisions..................................-147-
Section 12.07  Assignment..................................................-147-
Section 12.08  Limitation on Rights of Certificateholders..................-147-
Section 12.09  Inspection and Audit Rights.................................-148-
Section 12.10  Certificates Nonassessable and Fully Paid...................-149-

                                        v

<PAGE>

EXHIBITS

Exhibit A-1    Form of Class A-[1]][2][3][4][5][6] Certificates
Exhibit A-2    Form of Class M-[1][2] Certificates
Exhibit A-3    Form of Class B Certificates
Exhibit A-4    Form of Class C Certificates
Exhibit A-5    Form of Class P Certificates
Exhibit A-6    Form of Class R-[1][2][3] Certificates
Exhibit B      Mortgage Loan Schedule
Exhibit C      Form of Transfer Affidavit
Exhibit D      Form of Transferor Certificate
Exhibit E      Form of Investment Letter (Non-Rule 144A)
Exhibit F      Form of Rule 144A Investment Letter
Exhibit G      Form of Request for Release
Exhibit H      DTC Letter of Representations
Exhibit I      Schedule of Mortgage Loans with Lost Notes
Exhibit J      Form of Custodial Agreement
Exhibit K      Form of Company Certification
Exhibit L      Form of Mortgage Loan Purchase Agreement

                                       vi

<PAGE>

         POOLING AND SERVICING AGREEMENT, dated as of July 1, 2004, among BEAR
STEARNS ASSET BACKED SECURITIES I LLC, a Delaware limited liability company, as
depositor (the "Depositor"), EMC MORTGAGE CORPORATION, a Delaware corporation,
as seller (in such capacity, the "Seller") and as company (in such capacity, the
"Company"), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as master servicer (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator") and
U.S. BANK NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, but solely as trustee (the "Trustee").

                              PRELIMINARY STATEMENT

         The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates.

                                     REMIC I
                                     -------

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets 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-1 Certificates 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, the Uncertificated REMIC I
Pass-Through Rate, the initial Uncertificated Principal Balance, and solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC I Regular Interests. None
of the REMIC I Regular Interests will be certificated.

                        Initial           Uncertificated
                     Uncertificated        REMIC I Pass-          Assumed Final
Designation        Principal Balance       Through Rate         Maturity Date(1)
-----------        -----------------      ---------------       ----------------
    AA              $446,792,735.49         Variable (2)         August 25, 2034
    A-1             $    750,000.00         Variable (2)         August 25, 2034
    A-2             $  1,858,850.00         Variable (2)         August 25, 2034
    A-3             $    750,000.00         Variable (2)         August 25, 2034
    A-4             $    100,000.00         Variable (2)         August 25, 2034
    A-5             $    136,000.00         Variable (2)         August 25, 2034
    M-1             $    380,690.00         Variable (2)         August 25, 2034
    M-2             $    282,660.00         Variable (2)         August 25, 2034
     B              $    262,150.00         Variable (2)         August 25, 2034
    ZZ              $  4,597,869.09         Variable (2)         August 25, 2034
     P              $        100.00            0.00%             August 25, 2034

                                       -1-

<PAGE>

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

                                    REMIC II
                                    --------

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The Class R-2 Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.
The following table irrevocably sets forth the designation, the Uncertificated
REMIC II Pass-Through Rate, the initial Uncertificated Principal Balance, and
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC
II Regular Interests. None of the REMIC II Regular Interests will be
certificated.

                     Initial             Uncertificated
                  Uncertificated            REMIC II             Assumed Final
Designation      Principal Balance      Pass-Through Rate       Maturity Date(1)
-----------      -----------------      -----------------       ----------------
    A-1           $ 75,000,000.00          Variable(2)          August 25, 2034
    A-2           $185,885,000.00          Variable(2)          August 25, 2034
    A-3           $ 75,000,000.00          Variable(2)          August 25, 2034
    A-4           $ 10,000,000.00          Variable(2)          August 25, 2034
    A-5           $ 13,600,000.00          Variable(2)          August 25, 2034
    M-1           $ 38,069,000.00          Variable(2)          August 25, 2034
    M-2           $ 28,266,000.00          Variable(2)          August 25, 2034
     B            $ 26,215,000.00          Variable(2)          August 25, 2034
     C            $  3,875,954.58          Variable(3)(5)       August 25, 2034
     P            $        100.00             0.00%             August 25, 2034
-------------------
(1)   Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
      regulations, the Distribution Date in the month following the maturity
      date for the Mortgage Loan with the latest maturity date has been
      designated as the "latest possible maturity date" for each Class of
      Certificates that represents one or more of the "regular interests" in
      REMIC II.
(2)   Calculated in accordance with the definition of "Uncertificated REMIC II
      Pass-Through Rate" herein.
(3)   REMIC II Regular Interest C will not accrue interest on its Uncertificated
      Principal Balance, but will accrue interest at the related Uncertificated
      REMIC II Pass-Through Rate on its Uncertificated Notional Balance which
      shall equal the aggregate of the Uncertificated Principal Balances of the
      REMIC I Regular Interests other than REMIC I Regular Interest P.
(4)   REMIC II Regular Interest P is not entitled to distributions in respect of
      interest. (5) The Class C Certificates have a Notional Balance of
      $455,910,955.58.

                                    REMIC III
                                    ---------

      As provided herein, the Trustee will make an election 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-3 Certificates will represent the sole
class of "residual interests" in REMIC III for purposes of the REMIC Provisions.

                                       -2-

<PAGE>

      The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in REMIC III
created hereunder.

                                       -3-

<PAGE>

                   Initial
  Class          Certificate                                     Assumed Final
Designation   Principal Balance      Pass-Through Rate          Maturity Date(1)
------------  -----------------   ---------------------------   ----------------
  Class A-1     $ 75,000,000.00   Class A-1 Pass-Through Rate   August 25, 2034
  Class A-2     $185,885,000.00   Class A-2 Pass-Through Rate   August 25, 2034
  Class A-3     $ 75,000,000.00   Class A-3 Pass-Through Rate   August 25, 2034
  Class A-4     $ 10,000,000.00   Class A-4 Pass-Through Rate   August 25, 2034
Class A-5(2)    $ 13,600,000.00   Class A-5 Pass-Through Rate   August 25, 2034
Class A-6(3)           N/A(4)     Class A-6 Pass-Through Rate   August 25, 2034
  Class M-1     $ 38,069,000.00   Class M-1 Pass Through Rate   August 25, 2034
  Class M-2     $ 28,266,000.00   Class M-2 Pass-Through Rate   August 25, 2034
   Class B      $ 26,215,000.00    Class B Pass Through Rate    August 25, 2034
   Class C      $  3,875,954.58             N/A(5)              August 25, 2034
   Class P      $        100.00             N/A(6)              August 25, 2034

-------------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates that represents one or more of the "regular interests" in
         REMIC III.
(2)      The Class A-5 Certificates represent ownership of REMIC III Regular
         Interest A-5, a regular interest in REMIC III, as well as the
         obligation to make payments in respect of the Class A-5/A-6 Net WAC
         Pass-Through Amount to the Net WAC Reserve Account for distribution in
         respect of the Class A-6 Certificates, which obligation shall not be an
         interest in any REMIC but a contractual obligation of the holders of
         the Class A-5 Certificates.
(3)      The Class A-6 Certificates represent ownership of REMIC III Regular
         Interest A-6, a regular interest in REMIC III, as well as the right to
         receive payments from the Net WAC Reserve Account in respect of Class
         A-5/A-6 Net WAC Pass-Through Amount, which payments shall not be in
         respect of an interest in any REMIC.
(4)      The Class A-6 Certificates will accrue interest at the Class A-6
         Pass-Through Rate on the Certificate Notional Balance of the Class A-6
         Certificates calculated in accordance with the definition of
         "Certificate Notional Balance" herein. The Class A-6 Certificates will
         not be entitled to distributions in respect of principal.
(5)      The Class C Certificates will not accrue interest on their Certificate
         Principal Balance, but will be entitled to 100% of amounts distributed
         on REMIC II Regular Interest C.
(6)      The Class P Certificates are not entitled to distributions in respect
         of interest.

         The Trust Fund shall be named, and may be referred to as, the "Bear
Stearns Asset Backed Securities I Trust 2004-AC4." The Certificates issued
hereunder may be referred to as "Asset-Backed Certificates Series 2004-AC4"
(including for purposes of any endorsement or assignment of a Mortgage Note or
Mortgage).

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

                                       -4-

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01      DEFINED TERMS.

         In addition to those terms defined in Section 1.02, whenever used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:

         ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage Loan,
as applicable, either (a) those customary mortgage servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to the Company or
the related Servicer), or (b) as provided in Section 3.01 hereof or as provided
in the related Servicing Agreement, but, in each case, in no event below the
standard set forth in clause (a).

         ACCEPTED SERVICING PRACTICES: With respect to each EMC Mortgage Loan,
those mortgage servicing practices (including collection procedures) that are in
accordance with all applicable statutes, regulations and prudent mortgage
banking practices for similar mortgage loans.

         ACCOUNT: The Distribution Account, the Master Servicer Collection
Account, the Net WAC Reserve Fund and any Protected Account.

         ACCRUAL PERIOD: With respect to the Class A-1, Class A-2, Class A-3,
Class A-4 and Class C Certificates and any Distribution Date, the calendar month
immediately preceding such Distribution Date. With respect to the Class A-5,
Class A-6, Class M-1, Class M-2 and Class B Certificates and any Distribution
Date, the period from and including the 25th day of the calendar month preceding
the calendar month in which the Distribution Date occurs (or, with respect to
the first Accrual Period and the Class M-1, Class M-2 and Class B Certificates,
the Closing Date) to and including the 24th day of the calendar month in which
such Distribution Date occurs. All calculations of interest on the Class A
Certificates and Class C Certificates will be made on the basis of a 360-day
year consisting of twelve 30-day months. All calculations of interest on the
Class M-1, Class M-2 and Class B Certificates will be made on the basis of the
actual number of days elapsed in the related Accrual Period.

         ADDITIONAL MASTER SERVICING COMPENSATION: The meaning specified in
Section 4.14.

         ADVANCE: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Company as provided in
Section 6.01(a) hereof, by the related Servicer in accordance with the related
Servicing Agreement or by the Master Servicer as provided in Section 6.01(b)
hereof.

                                      -5-
<PAGE>

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

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

         APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date and
a Class of Subordinate Certificates the sum of the Realized Losses with respect
to the Mortgage Loans which have been applied in reduction of the Certificate
Principal Balance of that Class of Certificates pursuant to Section 6.04A of
this Agreement, which have not previously been reimbursed.

         APPRAISED VALUE: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the related Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.

         ASSIGNMENT AGREEMENT: Shall mean, collectively, the Cendant Assignment
Agreement, the HSBC Assignment Agreement, the National City Assignment
Agreement, the SouthTrust Assignment Agreement and the Union Federal Assignment
Agreement.

         AVAILABLE FUNDS: The sum of Interest Funds and Principal Funds with
respect to the Mortgage Loans.

         BANKRUPTCY CODE: Title 11 of the United States Code.

         BASIC PRINCIPAL DISTRIBUTION AMOUNT: Shall mean, with respect to any
Distribution Date, the lesser of (a) the excess of (i) the Available Funds for
such Distribution Date over (ii) the aggregate Monthly Interest Distributable
Amount for the Certificates (other than the Class P, Class C and Class R
Certificates) for such Distribution Date and (b) the excess of (i) the Principal
Remittance Amount for such Distribution Date over (ii) the Overcollateralization
Release Amount, if any, for such Distribution Date.

         BISHOP'S GATE: Bishop's Gate Residential Mortgage Trust, and any
successor thereto.

         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",

                                      -6-
<PAGE>

or indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 7.06). As of the Closing Date, each Class
of Regular Certificates constitutes a Class of Book-Entry Certificates.

         BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in The City of New York, New York,
Minneapolis, Minnesota, Columbia, Maryland or the city in which the Corporate
Trust Office of the Trustee or the principal office of the Company or the Master
Servicer is located are authorized or obligated by law or executive order to be
closed.

         CENDANT: Cendant Mortgage Corporation, and any successor thereto.

         CENDANT ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of July 30, 2004, by and among the Seller,
Cendant, Bishop's Gate and the Trustee evidencing the assignment of the Cendant
Servicing Agreement to the Trust.

         CENDANT LOANS: Those Mortgage Loans subject to this Agreement which
were purchased by the Seller from Cendant and Bishop's Gate pursuant to the
Cendant Servicing Agreement.

         CENDANT SERVICING AGREEMENT: Shall mean the Purchase, Warranties and
Servicing Agreement, dated as of October 31, 2001, by and among the Seller,
Cendant and Bishop's Gate, as modified by the Cendant Assignment 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-6.

         CERTIFICATE NOTIONAL BALANCE: As to any Class A-6 Certificate and any
Distribution Date, the Certificate Principal Balance of the Class A-5
Certificates; for federal income tax purposes, however, the equivalent of the
foregoing, expressed as the Uncertificated Principal Balance of REMIC II Regular
Interest A-5. As to the Class C Certificates and any Distribution Date, an
amount equal to the Stated Principal Balance of the Mortgage Loans; for federal
income tax purposes, however, the Class C Certificates will not have a
Certificate Notional Balance, but the Class C Distribution Amount for any
Distribution Date will be an amount equal to 100% of amounts deemed distributed
with respect to REMIC II Regular Interest C for such Distribution Date.

         CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.

         CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other than any
Class A-6, Class C or Class R Certificate) and as of any Distribution Date, the
Initial Certificate Principal Balance of such Certificate plus any Subsequent
Recoveries added to the Certificate Principal Balance of such Certificate
pursuant to Section 6.04A 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 6.04 and (ii) any
Applied Realized Loss Amounts allocated to such Certificate on previous
Distribution Dates.

                                      -7-
<PAGE>

         CERTIFICATE REGISTER: The register maintained pursuant to Section 7.02
hereof.

         CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).

         CLASS: All Certificates bearing the same Class designation as set forth
in Section 7.01 hereof.

         CLASS A CERTIFICATES: The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-6 Certificates.

         CLASS A-1 CERTIFICATE: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-1 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.

         CLASS A-1 PASS-THROUGH RATE: Shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, 5.330% per annum,
subject to a cap equal to the related Net WAC Rate Cap for such Distribution
Date and (ii) for each Distribution Date thereafter, 5.830% per annum, subject
to a cap equal to the related Net WAC Rate Cap for such Distribution Date; for
federal income tax purposes, however, the equivalent of the foregoing, stated as
the weighted average of the Uncertificated REMIC II Pass-Through Rate for REMIC
II Regular Interest A-1, weighted on the basis of the Uncertificated Principal
Balance thereof immediately prior to such Distribution Date.

         CLASS A-2 CERTIFICATE: Any Certificate designated as a "Class A-2
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-2 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.

         CLASS A-2 PASS-THROUGH RATE: Shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, 5.500% per annum,
subject to a cap equal to the related Net WAC Rate Cap for such Distribution
Date and (ii) for each Distribution Date thereafter, 6.000% per annum, subject
to a cap equal to the related Net WAC Rate Cap for such Distribution Date; for
federal income tax purposes, however, the equivalent of the foregoing, stated as
the weighted average of the Uncertificated REMIC II Pass-Through Rate for REMIC
II Regular Interest A-2, weighted on the basis of the Uncertificated Principal
Balance thereof immediately prior to such Distribution Date.

         CLASS A-3 CERTIFICATE: Any Certificate designated as a "Class A-3
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-3 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.

                                      -8-
<PAGE>

         CLASS A-3 PASS-THROUGH RATE: Shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, 5.250% per annum,
subject to a cap equal to the related Net WAC Rate Cap for such Distribution
Date and (ii) for each Distribution Date thereafter, 5.750% per annum, subject
to a cap equal to the related Net WAC Rate Cap for such Distribution Date; for
federal income tax purposes, however, the equivalent of the foregoing, stated as
the weighted average of the Uncertificated REMIC II Pass-Through Rate for REMIC
II Regular Interest A-3, weighted on the basis of the Uncertificated Principal
Balance thereof immediately prior to such Distribution Date.

         CLASS A-4 CERTIFICATE: Any Certificate designated as a "Class A-4
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-4 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.

         CLASS A-4 PASS-THROUGH RATE: Shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, 5.250% per annum,
subject to a cap equal to the related Net WAC Rate Cap for such Distribution
Date and (ii) for each Distribution Date thereafter, 5.750% per annum, subject
to a cap equal to the related Net WAC Rate Cap for such Distribution Date; for
federal income tax purposes, however, the equivalent of the foregoing, stated as
the weighted average of the Uncertificated REMIC II Pass-Through Rate for REMIC
II Regular Interest A-4, weighted on the basis of the Uncertificated Principal
Balance thereof immediately prior to such Distribution Date.

         CLASS A-5 CERTIFICATE: Any Certificate designated as a "Class A-5
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-5 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.

         CLASS A-5/A-6 NET WAC PASS-THROUGH AMOUNT: With respect to any
Distribution Date, the excess, if any, of (A) the amount of interest the Class
A-5 Certificates would have been entitled to receive if the related Net WAC Rate
Cap did not apply, over (B) the amount of interest the Class A-5 Certificates
would have been entitled to receive if reductions under the related Net WAC Rate
Cap were allocated as provided in the definition thereof; provided, however,
that if One-Month LIBOR plus the applicable margin for the Class A-5
Certificates for such Distribution Date is equal to or greater than the rate of
interest for the Class A-5 Certificates determined as if reductions under the
Net WAC Rate Cap allocable to the Class A-5 Certificates and Class A-6
Certificates were allocated to the Class A-5 Certificates, the amount determined
under clause (A) would be determined as if reductions under the Net WAC Rate Cap
allocable to the Class A-5 Certificates and Class A-6 Certificates were
allocated to the Class A-5 Certificates.

         CLASS A-5 PASS-THROUGH RATE: Shall mean One-Month LIBOR plus 0.50% per
annum and with a maximum rate of 8.00% per annum and a minimum rate of 0.50%, in
each case subject to a cap equal to the related Net WAC Rate Cap for such
Distribution Date.

                                      -9-
<PAGE>

         CLASS A-6 CERTIFICATE: Any Certificate designated as a "Class A-6
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-6 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.

         CLASS A-6 PASS-THROUGH RATE: Shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, 7.50% per annum minus
One-Month LIBOR and (ii) for each Distribution Date thereafter, 8.00% per annum
minus One-Month LIBOR, in each case with a maximum rate of 7.50% per annum on or
prior to the Optional Termination Date and 8.00% per annum after the Optional
Termination Date and a minimum rate of 0.00%, in each case subject to a cap
equal to the related Net WAC Rate Cap for such Distribution Date.

         CLASS B CERTIFICATE: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class B Certificates as set forth herein and evidencing a Regular Interest
in REMIC III

         CLASS B PASS-THROUGH RATE: Shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, One-Month LIBOR plus
1.90% per annum and (ii) for each Distribution Date thereafter, One-Month LIBOR
plus 2.85% per annum, in each case subject to a cap equal to the related Net WAC
Rate Cap for such Distribution Date; for federal income tax purposes, however,
the equivalent of the foregoing, stated as the weighted average of the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest B,
weighted on the basis of the Uncertificated Principal Balance thereof
immediately prior to such Distribution Date.

         CLASS C CERTIFICATE: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class C Certificates herein and evidencing a Regular Interest in REMIC III.

         CLASS C DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
sum of (i) the Monthly Interest Distributable Amount for the Class C
Certificates for such Distribution Date and (ii) any Overcollateralization
Release Amount for such Distribution Date; provided, however that on and after
the Distribution Date on which the Certificate Principal Balance of the
Certificates has been reduced to zero, the Class C Distribution Amount shall
include the Overcollateralized Amount. For federal income tax purposes the Class
C Distribution Amount for the Class C Certificates for any Distribution Date
shall be an amount equal to 100% of the amounts distributed in respect of REMIC
II Regular Interest C on such Distribution Date.

         CLASS C PASS-THROUGH RATE: The Class C Certificates will not have a
Pass-Through Rate, but the Class C Distribution Amount for the Class C
Certificates for any Distribution Date shall be an amount equal to 100% of the
amounts distributed in respect of REMIC II Regular Interest C on such
Distribution Date.

                                      -10-
<PAGE>

         CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class M-1 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.

         CLASS M-1 PASS-THROUGH RATE: Shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, One-Month LIBOR plus
0.60% per annum and (ii) for each Distribution Date thereafter, One-Month LIBOR
plus 0.90% per annum, in each case subject to a cap equal to the related Net WAC
Rate Cap for such Distribution Date; for federal income tax purposes, however,
the equivalent of the foregoing, stated as the weighted average of the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest M-1,
weighted on the basis of the Uncertificated Principal Balance thereof
immediately prior to 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-2 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class M-2 Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.

         CLASS M-2 PASS-THROUGH RATE: Shall mean (i) on any Distribution Date
which occurs on or prior to the Optional Termination Date, One-Month LIBOR plus
1.15% per annum and (ii) for each Distribution Date thereafter, One-Month LIBOR
plus 1.725% per annum, in each case subject to a cap equal to the related Net
WAC Rate Cap for such Distribution Date; for federal income tax purposes,
however, the equivalent of the foregoing, stated as the weighted average of the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest M-2,
weighted on the basis of the Uncertificated Principal Balance thereof
immediately prior to such Distribution Date.

         CLASS P CERTIFICATE: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class P Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.

         CLASS P CERTIFICATE ACCOUNT: The account established and maintained by
the Trustee pursuant to Section 6.09 hereof.

         CLASS R CERTIFICATES: The Class R-1, Class R-2 and Class R-3
Certificates.

         CLASS R-1 CERTIFICATE: Any Certificate designated a "Class R-1
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-6 hereto, evidencing the Residual Interest in REMIC I and representing the
right to the Percentage Interest of distributions provided for the Class R-1
Certificates as set forth herein.

         CLASS R-2 CERTIFICATE: Any Certificate designated a "Class R-2
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-6 hereto, evidencing the Residual Interest in REMIC II

                                      -11-
<PAGE>

and representing the right to the Percentage Interest of distributions provided
for the Class R-2 Certificates as set forth herein.

         CLASS R-3 CERTIFICATE: Any Certificate designated a "Class R-3
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-7 hereto, evidencing the Residual Interest in REMIC III and representing the
right to the Percentage Interest of distributions provided for the Class R-3
Certificates as set forth herein.

         CLOSING DATE: July 30, 2004.

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

         COMPANY: EMC.

         COMPENSATING INTEREST: An amount, not to exceed the Servicing Fee, to
be deposited in the Master Servicer Collection Account by the Company or the
related Servicer to the payment of a Prepayment Interest Shortfall on a Mortgage
Loan subject to this Agreement; provided that in the event the Company or the
related Servicer fails to make such payment, the Master Servicer shall be
obligated to do so to the extent provided in Section 6.02(c) hereof.

         CORPORATE TRUST OFFICE: The designated office of the Trustee where at
any particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at US Bank Corporate Trust Services, One Federal Street,
3rd Floor, Boston, Massachusetts 02110, Attention: Corporate Trust
Services/BSABS I 2004-AC4, or at such other address as the Trustee may designate
from time to time.

         CORRESPONDING CERTIFICATE: With respect to each Uncertificated REMIC II
Regular Interest, the Certificate with the corresponding designation.

         CORRESPONDING INTEREST: With respect to each Uncertificated REMIC I
Regular Interest, the Uncertificated REMIC II Regular Interest with the
corresponding designation.

         CROSS-OVER DATE: The first Distribution Date on which the aggregate
Certificate Principal Balance of the Subordinate Certificates has been reduced
to zero (giving effect to all distributions on such Distribution Date).

         CUSTODIAL AGREEMENT: An agreement, dated as of July 30, 2004, among the
Depositor, the Seller, the Trustee and the Custodian in substantially the form
of Exhibit K hereto.

         CUSTODIAN: Wells Fargo Bank, National Association, or any successor
custodian appointed pursuant to the provisions hereof and the Custodial
Agreement.

         CUT-OFF DATE: The close of business on July 1, 2004.

                                      -12-
<PAGE>

         CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.

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

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

         DEFINITIVE CERTIFICATES: As defined in Section 7.06.

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

         DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.

         DENOMINATION: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate".

         DEPOSITOR: Bear Stearns Asset Backed Securities I LLC, a Delaware
limited liability company, or its successor in interest.

         DEPOSITORY: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.

                                      -13-
<PAGE>

         DEPOSITORY AGREEMENT: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
I.

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

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

         DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 5.07 in the name of the Trustee
for the benefit of the Certificateholders and designated "U.S. Bank National
Association, in trust for registered holders of Bear Stearns Asset Backed
Securities I LLC, Asset-Backed Certificates, Series 2004-AC4" 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, on or
before 3:00 p.m. Eastern 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: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.

         DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the calendar month preceding the calendar month in which such
Distribution Date occurs through close of business on the first day of the
calendar month in which such Distribution Date occurs.

         ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, so long as Moody's is not a Rating Agency) are rated by each
Rating Agency in one of its two highest long-term and its highest short-term
rating categories respectively, at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or

                                      -14-
<PAGE>

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.

         EMC: EMC Mortgage Corporation, a Delaware corporation.

         EMC MORTGAGE LOANS: Shall mean those Mortgage Loans serviced by the
Company pursuant to the terms of this Agreement.

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

         ERISA RESTRICTED CERTIFICATE: Each of the Class C, Class P and Residual
Certificates.

         EVENT OF DEFAULT: As defined in Section 9.01 hereof.

         EXEMPTION: Prohibited Transaction Exemption 90-30, as amended from time
to time.

         EXCESS LIQUIDATION PROCEEDS: To the extent not required by law to be
paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal Balance of such
Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has been
liquidated.

         EXCESS SPREAD: With respect to any Distribution Date is the excess, if
any, of the Interest Funds for such Distribution Date over the Monthly Interest
Distributable Amounts payable to the Offered Certificates on such Distribution
Date.

         EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date (a) on or prior to the earlier of (1) the 20% Clean-Up Call Date and (2)
the Distribution Date in July 2014, the lesser of (x) the Excess Spread for such
Distribution Date and (y) the Overcollateralization Increase Amount for such
Distribution Date; and (b) thereafter, the Excess Spread for such Distribution
Date.

         FANNIE MAE: Fannie Mae (formerly, Federal National Mortgage
Association), or any successor thereto.

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

         FINAL RECOVERY DETERMINATION: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller or the Class C Certificateholder pursuant to or as contemplated by
Section 2.03(c) or Section 11.01), a determination made by the Company pursuant
to this Agreement or the applicable Servicer pursuant to the related

                                      -15-
<PAGE>

Servicing Agreement that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Company or such Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Master Servicer shall maintain records, based solely on
information provided by each Servicer, of each Final Recovery Determination made
thereby.

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

         FREDDIE MAC: Freddie Mac (formerly The Federal Home Loan Mortgage
Corporation), or any successor thereto.

         HSBC: HSBC Mortgage Corporation (USA), and any successor thereto.

         HSBC ASSIGNMENT AGREEMENT: The Assignment, Assumption and Recognition
Agreement, dated as of May 28, 2004, by and among the Seller, HSBC and the
Trustee evidencing the assignment of the HSBC Servicing Agreement to the Trust.

         HSBC LOANS: Those Mortgage Loans subject to this Agreement which were
purchased by the Seller from HSBC pursuant to the HSBC Servicing Agreement.

         HSBC SERVICING AGREEMENT: Shall mean the Purchase, Warranties and
Servicing Agreement, dated as of May 1, 2002, by and between the Seller and
HSBC, as modified by the HSBC Assignment Agreement.

         INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Company, the
Trust Fund and the Securities Administrator and their officers, directors,
agents and employees and, with respect to the Trustee, any separate co-trustee
and its officers, directors, agents and employees.

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

         INSURANCE POLICY: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy or LPMI Policy, including all riders and
endorsements thereto in effect with respect to such Mortgage Loan, including any
replacement policy or policies for any Insurance Policies.

         INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Company, the related 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 Company
or the related 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.

                                      -16-
<PAGE>

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

         INTEREST DETERMINATION DATE: Shall mean the second LIBOR Business Day
preceding the commencement of each Accrual Period.

         INTEREST FUNDS: For any Distribution Date, (i) the sum, without
duplication, of (a) all scheduled interest during the related Due Period with
respect to the related Mortgage Loans less the Servicing Fee, the Master
Servicing Fee and the LPMI Fee, if any, (b) all Advances relating to interest
with respect to the related Mortgage Loans made on or prior to the related
Distribution Account Deposit Date, (c) all Compensating Interest with respect to
the related Mortgage Loans and required to be remitted by the Company or the
Master Servicer pursuant to this Agreement or the related Servicer pursuant to
the related Servicing Agreement with respect to such Distribution Date, (d)
Liquidation Proceeds and Subsequent Recoveries with respect to the related
Mortgage Loans collected during the related Prepayment Period (to the extent
such Liquidation Proceeds and Subsequent Recoveries relate to interest), (e) all
amounts relating to interest with respect to each Mortgage Loan repurchased by
the Seller pursuant to Sections 2.02 and 2.03 and by EMC pursuant to Section
4.21 and (f) all amounts in respect of interest paid by the Master Servicer
pursuant to Section 11.01, in each case to the extent remitted by the Company or
the related Servicer, as applicable, to the Distribution Account pursuant to
this Agreement or the related Servicing Agreement minus (ii) all amounts
relating to interest required to be reimbursed pursuant to Sections 5.02, 5.04,
5.06 and 5.08 or as otherwise set forth in this Agreement.

         INTEREST SHORTFALL: With respect to any Distribution Date, means the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rates) on Mortgage Loans resulting from (a) Principal Prepayments
in full received during the related Prepayment Period, (b) the partial Principal
Prepayments received during the related Prepayment Period to the extent applied
prior to the Due Date in the month of the Distribution Date and (c) interest
payments on certain of the Mortgage Loans being limited pursuant to the
provisions of the Relief Act or similar state laws.

         LAST SCHEDULED DISTRIBUTION DATE: August 25, 2034.

         LATEST POSSIBLE MATURITY DATE: The Distribution Date following the
final scheduled maturity date of the Mortgage Loan in the Trust Fund having the
latest scheduled maturity date as of the Cut-off Date. For purposes of the
Treasury Regulations under Code section 860A through 860G, the latest possible
maturity date of each regular interest issued by REMIC I, REMIC II and REMIC III
shall be the Latest Possible Maturity Date.

         LIBOR BUSINESS DAY: Shall mean a day on which banks are open for
dealing in foreign currency and exchange in London and New York City.

         LIQUIDATED LOAN: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization

                                      -17-
<PAGE>

as provided by applicable law governing the real property subject to the related
Mortgage and any security agreements and as to which the Company or the related
Servicer has made a Final Recovery Determination with respect thereto.

         LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds, received
in connection with the partial or complete liquidation of a Mortgage Loan,
whether through trustee's sale, foreclosure sale or otherwise, or in connection
with any condemnation or partial release of a Mortgaged Property and any other
proceeds received with respect to an REO Property, less the sum of related
unreimbursed Advances, Servicing Fees and Servicing Advances and all expenses
of liquidation, including property protection expenses and foreclosure and sale
costs, including court and reasonable attorneys fees.

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

         LOSS ALLOCATION LIMITATION: The meaning specified in Section 6.04A(c)
hereof.

         LPMI FEE: Shall mean the fee payable to the insurer for each Mortgage
Loan subject to an LPMI Policy as set forth in such LPMI Policy.

         LPMI POLICY: A policy of mortgage guaranty insurance issued by an
insurer meeting the requirements of Fannie Mae and Freddie Mac in which the
Company or the related Servicer of the related Mortgage Loan is responsible for
the payment of the LPMI Fee thereunder from collections on the related Mortgage
Loan.

         MAJORITY CLASS C CERTIFICATEHOLDER: Shall mean the Holder of a 50.01%
or greater Percentage Interest in the Class C Certificates.

         MARKER RATE: With respect to REMIC II Regular Interest C and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC I Pass- Through Rates for REMIC I Regular Interest
A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest A-3, REMIC I Regular
Interest A-4, REMIC I Regular Interest A-5, REMIC I Regular Interest M-1, REMIC
I Regular Interest M-2, REMIC I Regular Interest B and REMIC I Regular Interest
ZZ, with the rate on such REMIC I Regular Interests (other than REMIC I Regular
Interest ZZ) subject to a cap equal to the Uncertificated REMIC II Pass-Through
Rate for the Corresponding Interest and with the rate on REMIC I Regular
Interest ZZ subject to a cap of zero for the purpose of this calculation;
provided, however, that for this purpose, the calculation of the Uncertificated
REMIC I Pass-Through Rate and the related cap with respect to REMIC I Regular
Interest M-1, REMIC I Regular Interest M-2 and REMIC I Regular Interest B shall
be multiplied by a fraction, the numerator of which is the actual number of days
in the Accrual Period and the denominator of which is 30.

         MASTER SERVICER: Wells Fargo Bank, National Association, in its
capacity as master servicer, and its successors and assigns.

         MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by the Company and all Servicers and signed by
an officer of the Master Servicer that complies with (i) the Sarbanes-Oxley Act
of 2002, as amended from time to time, and (ii) the February 21, 2003 Statement
by the Staff of the Division of Corporation Finance of the Securities and
Exchange Commission Regarding Compliance by Asset-Backed Issuers with Exchange
Act Rules 13a-14 and 15d-14, as in effect from time to time; provided that if,
after the Closing Date (a) the Sarbanes-Oxley Act of 2002 is amended, (b) the
Statement referred to in clause (ii) is modified or superceded by any subsequent
statement, rule or regulation of the Securities and Exchange Commission or any
statement of a division thereof, or (c) any future releases, rules and

                                      -18-
<PAGE>

regulations are published by the Securities and Exchange Commission from time to
time pursuant to the Sarbanes-Oxley Act of 2002, which in any such case affects
the form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.

         MASTER SERVICER COLLECTION ACCOUNT: The trust accounts or accounts
created and maintained pursuant to Section 5.05 hereof, which shall be entitled
"U.S. Bank National Association, as Trustee f/b/o holders of Bear Stearns Asset
Backed Securities I LLC, Asset Backed Certificates, Series 2004-AC4 - Master
Servicer Collection Account".

         MASTER SERVICING COMPENSATION: For any Distribution Date, the sum of
the Master Servicing Fee and the Additional Master Servicing Compensation for
such Distribution Date.

         MASTER SERVICING FEE: As to each Mortgage Loan and any Distribution
Date, an amount equal to 1/12th of the Master Servicing Fee Rate multiplied by
the Stated Principal Balance of such Mortgage Loan as of the last day of the
related Due Period.

         MASTER SERVICING FEE RATE: 0.010% per annum.

         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.

         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.

                                      -19-
<PAGE>

         MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to the Certificates
(other than the Class P Certificates and Class R Certificates) for any
Distribution Date, means an amount equal to the interest accrued during the
related Accrual Period at the applicable Pass-Through Rate on the Certificate
Principal Balance (or Certificate Notional Balance) of such Certificate
immediately prior to such Distribution Date less such Certificate's share of any
Unpaid Interest Shortfall and the interest portion of any Realized Losses on the
Mortgage Loans allocated to such Certificate pursuant to Section 1.02. The
Monthly Interest Distributable Amount with respect to the Senior Certificates is
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The Monthly Interest Distributable Amount with respect to the Subordinate
Certificates is calculated on the basis of a 360-day year and the actual number
of days elapsed during the related Accrual Period. No Monthly Interest
Distributable Amount will be payable with respect to any Class of Certificates
after the Distribution Date on which the outstanding Certificate Principal
Balance (or Certificate Notional Balance) of such Certificate has been reduced
to zero.

         MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 6.05.

         MOODY'S: Moody's Investors Service, Inc.

         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 LOANS: Such of the Mortgage Loans transferred and assigned to
the Trustee pursuant to the provisions hereof, as from time to time are held as
a part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property. Any mortgage
loan that was intended by the parties hereto to be transferred to the Trust Fund
as indicated by such Mortgage Loan Schedule which is in fact not so transferred
for any reason including, without limitation, a breach of the representation
contained in Section 2.03(b)(v) hereof, shall continue to be a Mortgage Loan
hereunder until the Purchase Price with respect thereto has been paid to the
Trust Fund.

         MORTGAGE LOAN PURCHASE AGREEMENT: Shall mean the Mortgage Loan Purchase
Agreement, dated as of July 30, 2004, between the Seller, as seller and the
Depositor, as purchaser.

         MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth in
Section 11.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 11.01.

         MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Company or the Master Servicer to reflect the deletion of
Deleted Mortgage Loans and the addition of Replacement Mortgage Loans pursuant
to the provisions of this Agreement) transferred to the Trustee

                                      -20-
<PAGE>

as part of the Trust Fund and from time to time subject to this Agreement, the
initial Mortgage Loan Schedule being attached hereto as Exhibit B, setting forth
the following information with respect to each Mortgage Loan:

                  (i)      the loan number;

                  (ii)     the Mortgage Rate in effect as of the Cut-off Date;

                  (iii)    the Servicer (or the Company, if it services the
                           Mortgage Loan), the Servicing Fee Rate and the Master
                           Servicing Fee Rate;

                  (iv)     the Net Mortgage Rate in effect as of the Cut-off
                           Date;

                  (v)      the maturity date;

                  (vi)     the original principal balance;

                  (vii)    the Cut-off Date Principal Balance;

                  (viii)   the original term;

                  (ix)     the remaining term;

                  (x)      the property type; and

                  (xi)     the MIN with respect to each Mortgage Loan.

Such schedule shall also set forth the aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans.

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

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

         MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan.

         MORTGAGOR: The obligors on a Mortgage Note.

         NATIONAL CITY: National City Mortgage Co., and any successor thereto.

                                      -21-
<PAGE>

         NATIONAL CITY ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of July 30, 2004, by and among the Seller, HSBC
and the Trustee evidencing the assignment of the National City Servicing
Agreement to the Trust.

         NATIONAL CITY LOANS: Those Mortgage Loans subject to this Agreement
which were purchased by the Seller from National City pursuant to the National
City Servicing Agreement.

         NATIONAL CITY SERVICING AGREEMENT: Shall mean the Purchase, Warranties
and Servicing Agreement, dated as of October 1, 2001, by and between the Seller
and National City, as modified by the National City Assignment Agreement.

         NET INTEREST SHORTFALLS: Shall mean Interest Shortfalls net of payments
by the Company, the Servicer or the Master Servicer in respect of Compensating
Interest.

         NET MONTHLY EXCESS CASHFLOW: With respect to any Distribution Date, the
sum of (a) any Overcollateralization Release Amount for such Distribution Date
and (b) the Remaining Excess Spread for such Distribution Date.

         NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the related Mortgage Rate less the sum of (i) the Servicing
Fee Rate, (ii) the Master Servicing Fee Rate and (iii) the rate at which the
LPMI Fee is calculated, if any.

         NET WAC RATE CAP: With respect to the Class A-1 Certificates shall mean
(i) on any Distribution Date which occurs on or prior to the Optional
Termination Date, the product of (x) the weighted average of the Net Mortgage
Rates of the Mortgage Loans for such Distribution Date and (y) 96.9090909091%
and (ii) for each Distribution Date thereafter, the product of (x) the weighted
average of the Net Mortgage Rates of the Mortgage Loans for such Distribution
Date and (y) 97.1666666667%.

         With respect to the Class A-2 Certificates shall mean (i) on any
Distribution Date which occurs on or prior to the Optional Termination Date, the
product of (x) the weighted average of the Net Mortgage Rates of the Mortgage
Loans for such Distribution Date and (y) 100.0000000000% and (ii) for each
Distribution Date thereafter, the product of (x) the weighted average of the Net
Mortgage Rates of the Mortgage Loans for such Distribution Date and (y)
100.0000000000%.

         With respect to the Class A-3 Certificates shall mean (i) on any
Distribution Date which occurs on or prior to the Optional Termination Date, the
product of (x) the weighted average of the Net Mortgage Rates of the Mortgage
Loans for such Distribution Date and (y) 95.4545454545% and (ii) for each
Distribution Date thereafter, the product of (x) the weighted average of the Net
Mortgage Rates of the Mortgage Loans for such Distribution Date and (y)
95.8333333333%.

         With respect to the Class A-4 Certificates shall mean (i) on any
Distribution Date which occurs on or prior to the Optional Termination Date, the
product of (x) the weighted average of the Net

                                      -22-
<PAGE>

Mortgage Rates of the Mortgage Loans for such Distribution Date and (y)
95.4545454545% and (ii) for each Distribution Date thereafter, the product of
(x) the weighted average of the Net Mortgage Rates of the Mortgage Loans for
such Distribution Date and (y) 95.8333333333%.

         With respect to the Class A-5 Certificates and Class A-6 Certificates
will be calculated based on an assumed certificate with a principal balance
equal to the Certificate Principal Balance of the Class A-5 Certificates and a
fixed pass-through rate of (i) on any Distribution Date which occurs on or prior
to the Optional Termination Date, 8.000% per annum, subject to a cap equal to
the product of (x) the weighted average of the Net Mortgage Rates of the
Mortgage Loans and (y) 145.4545454545% and (ii) for each Distribution Date
thereafter, 8.500% per annum, subject to a cap equal to the product of (x) the
weighted average of the Net Mortgage Rates of the Mortgage Loans and (y)
141.6666666667%. If the weighted average of the Net Mortgage Rates of the
Mortgage Loans is less than 5.500% per annum (or, after the Optional Termination
Date, 6.000% per annum), the amount of the shortfall which would occur with
respect to the assumed certificate as a result of the cap will be allocated
between the Class A-5 Certificates and Class A-6 Certificates in proportion to
their current entitlements to interest calculated without regard to this cap.
Accordingly, in such event the Net WAC Rate Cap for the Class A-5 Certificates
would be equal to the Class A-5 Pass-Through Rate (determined without regard to
the Net WAC Rate Cap) less the amount allocable to the Class A-5 Certificates
pursuant to the preceding sentence, and the Net WAC Rate Cap for the Class A-6
Certificates would be equal to the Class A-6 Pass-Through Rate (determined
without regard to the Net WAC Rate Cap) less the amount allocable to the Class
A-5 Certificates pursuant to the preceding sentence.

         With respect to the Class M-1, Class M-2 and Class B Certificates shall
mean the lesser of (i) 11.00% per annum and (ii) the weighted average of the Net
Mortgage Rates of the Mortgage Loans.

         For federal income tax purposes, the Net WAC Rate Cap shall equal (i)
with respect to each of the Class M-1, Class M-2 and Class B Certificates, the
weighted average of the Uncertificated REMIC II Pass-Through Rate on the REMIC
II Regular Interest for which such Certificate is the Corresponding Certificate,
(ii) with respect to the Class A-1 Certificates, if the weighted average of the
Net Mortgage Rates of the Mortgage Loans is less than 5.500% per annum (or,
after the Optional Termination Date, 6.000% per annum), the equivalent of the
rates determined in the sixth preceding paragraph, calculated using the weighted
average of the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular
Interest A-1 in place of the weighted average of the Net Mortgage Rates of the
Mortgage Loans (iii) with respect to the Class A-2 Certificates, if the weighted
average of the Net Mortgage Rates of the Mortgage Loans is less than 5.500% per
annum (or, after the Optional Termination Date, 6.000% per annum), the
equivalent of the rates determined in the fifth preceding paragraph, calculated
using the weighted average of the Uncertificated REMIC II Pass-Through Rate on
REMIC II Regular Interest A-2 in place of the weighted average of the Net
Mortgage Rates of the Mortgage Loans, (iv) with respect to the Class A-3
Certificates, if the weighted average of the Net Mortgage Rates of the Mortgage
Loans is less than 5.500% per annum (or, after the Optional Termination Date,
6.000% per annum), the equivalent of the rates determined in the fourth
preceding paragraph, calculated using the weighted average of the Uncertificated
REMIC II Pass-Through Rate

                                      -23-
<PAGE>

on REMIC II Regular Interest A-3 in place of the weighted average of the Net
Mortgage Rates of the Mortgage Loans, (v) with respect to the Class A-4
Certificates, if the weighted average of the Net Mortgage Rates of the Mortgage
Loans is less than 5.500% per annum (or, after the Optional Termination Date,
6.000% per annum), the equivalent of the rates determined in the third preceding
paragraph, calculated using the weighted average of the Uncertificated REMIC II
Pass-Through Rate on REMIC II Regular Interest A-4 in place of the weighted
average of the Net Mortgage Rates of the Mortgage Loans and (vi) with respect to
the Class A-5 Certificates and Class A-6 Certificates, if the weighted average
of the Net Mortgage Rates of the Mortgage Loans is less than 5.500% per annum
(or, after the Optional Termination Date, 6.000% per annum), the equivalent of
the rates determined in the second preceding paragraph, calculated using the
weighted average of the Uncertificated REMIC II Pass-Through Rate on REMIC II
Regular Interest A-5 in place of the weighted average of the Net Mortgage Rates
of the Mortgage Loans.

         NET WAC RATE CARRYOVER AMOUNT: With respect any Class of Offered
Certificates and any Distribution Date on which the related Pass-Through Rate is
reduced by the Net WAC Rate Cap, an amount equal to the sum of (i) the excess of
(x) the amount of interest such Class would have been entitled to receive on
such Distribution Date if the Pass-Through Rate applicable to such Class would
not have been reduced by the Net WAC Rate Cap on such Distribution Date over (y)
the amount of interest paid to such Class on such Distribution Date plus (ii)
the related Net WAC Rate Carryover Amount for the previous Distribution Date not
previously distributed to such Class together with interest thereon at a rate
equal to the Pass-Through Rate for such Class for the most recently ended
Accrual Period.

         NET WAC RESERVE FUND: Shall mean the separate trust account created and
maintained by the Trustee pursuant to Section 6.08 hereof.

         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 Company or the Master Servicer pursuant to this
Agreement or the related Servicer pursuant to the related Servicing Agreement,
that, in the good faith judgment of the Company, the Master Servicer or the
related Servicer, will not or, in the case of a proposed advance, would not, be
ultimately recoverable by it from the related Mortgagor, related Liquidation
Proceeds, Insurance Proceeds or otherwise.

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

         OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor or the
Master Servicer (or any other officer customarily performing functions similar
to those performed by any of the above designated officers and also to whom,
with respect to a particular matter, such matter

                                      -24-
<PAGE>

is referred because of such officer's knowledge of and familiarity with a
particular subject) or (ii), if provided for in this Agreement, signed by a
Servicing Officer, as the case may be, and delivered to the Depositor, the
Seller, the Securities Administrator, the Master Servicer and/or the Trustee, as
the case may be, as required by this Agreement.

         ONE-MONTH LIBOR: With respect to any Accrual Period, the rate
determined by the Securities Administrator on the related Interest Determination
Date on the basis of the rate for U.S. dollar deposits for one month that
appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
Interest Determination Date; provided that the parties hereto acknowledge that
One-Month LIBOR for the first Accrual Period shall equal 1.47% 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 Securities Administrator), One-Month LIBOR for the applicable
Accrual Period will be the Reference Bank Rate. If no such quotations can be
obtained by the Securities Administrator and no Reference Bank Rate is
available, One- Month LIBOR will be One-Month LIBOR applicable to the preceding
Accrual Period. The establishment of One-Month LIBOR on each Interest
Determination Date by the Securities Administrator and the Securities
Administrator's calculation of the rate of interest applicable to the Class A-5,
Class A-6, Class M-1, Class M-2 and Class B Certificates for the related Accrual
Period shall, in the absence of manifest error, be final and binding.

         OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Seller, the Depositor, the Company or the Master Servicer, reasonably
acceptable to each addressee of such opinion; provided that with respect to
Section 2.05, 8.05, 8.07 or 12.01, or the interpretation or application of the
REMIC Provisions, such counsel must (i) in fact be independent of the Seller,
Depositor, the Company and the Master Servicer, (ii) not have any direct
financial interest in the Seller, Depositor, the Company or the Master Servicer
or in any affiliate of either, and (iii) not be connected with the Seller,
Depositor, the Company or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.

         OPTIONAL TERMINATION: The termination of the Trust Fund created
hereunder as a result of the purchase of all of the Mortgage Loans and any REO
Property pursuant to the last sentence of Section 11.01 hereof.

         OPTIONAL TERMINATION DATE: The first Distribution Date on which the
Trust Fund may be terminated at the option of the Majority Class C
Certificateholder as described under Section 11.01.

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

         ORIGINATOR: With respect to each Mortgage Loan, shall mean the
originator set forth in the Mortgage Loan Schedule for such Mortgage Loan.

                                      -25-
<PAGE>

         OTS: The Office of Thrift Supervision.

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

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

                  (b) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.

         OUTSTANDING MORTGAGE LOAN: As of any date of determination, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.

         OVERCOLLATERALIZATION INCREASE AMOUNT: As of any Distribution Date, the
excess, if any, of (a) the Overcollateralization Target Amount over (b) the
Overcollateralized Amount on such Distribution Date (after taking into account
payments to the Offered Certificates of the Basic Principal Distribution Amount
on such Distribution Date).

         OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralized Amount for such
Distribution Date (assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on such Distribution Date) over (ii) the
Overcollateralization Target Amount for such Distribution Date (with the amount
pursuant to clause (y) deemed to be $0 if the Overcollateralized Amount is less
than or equal to the Overcollateralization Target Amount on that Distribution
Date.)

         OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any Distribution
Date, $3,875,243.

         OVERCOLLATERALIZED AMOUNT: With respect to any Distribution Date, is
the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans as of the last day of the related Due Period over (b) the
aggregate Certificate Principal Balance of the Offered Certificates on such
Distribution Date (after taking into account the payment of principal other than
any Extra Principal Distribution Amount on such Certificates).

         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 each Class of Certificates (other
than the Class C Certificates), the applicable Pass-Through Rate for each such
Class as set forth in the Preliminary Statement.

                                      -26-
<PAGE>

         PERCENTAGE INTEREST: With respect to any Certificate of a specified
Class, the Percentage Interest set forth on the face thereof or the percentage
obtained by dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of the such Class.

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

                  (i) obligations of the United States or any agency thereof,
         provided such obligations are backed by the full faith and credit of
         the United States;

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

                  (iii) [Reserved];

                  (iv) commercial or finance company paper which is then
         receiving the highest commercial or finance company paper rating of
         each Rating Agency, or such lower rating as will not result in the
         downgrading or withdrawal of the ratings then assigned to the
         Certificates by each Rating Agency;

                  (v) certificates of deposit, demand or time deposits, or
         bankers' acceptances issued by any depository institution or trust
         company incorporated under the laws of the United States or of any
         state thereof and subject to supervision and examination by federal
         and/or state banking authorities (including the Trustee in its
         commercial banking capacity), provided that the commercial paper and/or
         long term unsecured debt obligations of such depository institution or
         trust company are then rated one of the two highest long-term and the
         highest short-term ratings of each such Rating Agency for such
         securities, or such lower ratings as will not result in the downgrading
         or withdrawal of the rating then assigned to the Certificates by any
         Rating Agency;

                  (vi) demand or time deposits or certificates of deposit issued
         by any bank or trust company or savings institution to the extent that
         such deposits are fully insured by the FDIC;

                  (vii) guaranteed reinvestment agreements issued by any bank,
         insurance company or other corporation containing, at the time of the
         issuance of such agreements, such terms and conditions as will not
         result in the downgrading or withdrawal of the rating then assigned to
         the Certificates by any such Rating Agency;

                  (viii) 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;

                                      -27-
<PAGE>

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

                  (x) interests in any money market fund (including any such
         fund managed or advised by the Trustee or Master Servicer or any
         affiliate thereof) which at the date of acquisition of the interests in
         such fund and throughout the time such interests are held in such fund
         has the highest applicable long term rating by each Rating Agency or
         such lower rating as will not result in the downgrading or withdrawal
         of the ratings then assigned to the Certificates by each Rating Agency;

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

                  (xii) such other 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 may be invested in investments (other
than money market funds) treated as equity interests for federal income tax
purposes, unless the Master Servicer shall receive an Opinion of Counsel, at the
expense of the Master Servicer, to the effect that such investment will not
adversely affect the status of any such REMIC as a REMIC under the Code or
result in imposition of a tax on any such REMIC. Permitted Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.

                                      -28-
<PAGE>

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

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

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

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

         PREPAYMENT INTEREST EXCESS: With respect to any Distribution Date, for
each EMC Mortgage Loan that was the subject of a Principal Prepayment in full or
in part during the portion of the related Prepayment Period occurring between
the first day of the calendar month in which such Distribution Date occurs and
the Determination Date of the calendar month in which such Distribution Date
occurs, an amount equal to interest (to the extent received) at the applicable
Net Mortgage Rate on the amount of such Principal Prepayment for the number of
days commencing on the first day of the calendar month

                                      -29-
<PAGE>

in which such Distribution Date occurs and ending on the last date through which
interest is collected from the related Mortgagor.

         PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 4.21 or
11.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation
proceeds) exceeds (ii) the amount of interest paid or collected in connection
with such Principal Prepayment or such liquidation proceeds less the sum of (a)
the related Servicing Fee, (b) the Master Servicing Fee and (c) the LPMI Fee, if
any.

         PREPAYMENT PERIOD: As to any Distribution Date and (i) each EMC
Mortgage Loan, the period commencing on the 16th day of the month prior to the
month in which the related Distribution Date occurs and ending on the 15th day
of the month in which such Distribution Date occurs and (ii) any other Mortgage
Loan, the period set forth in the related Servicing Agreement.

         PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related security instrument, if any or any
replacement policy therefor through the related Accrual Period for such Class
relating to a Distribution Date.

         PRINCIPAL DISTRIBUTION AMOUNT: With respect to each Distribution Date,
is equal to the sum of the Basic Principal Distribution Amount for such
Distribution Date, plus any Extra Principal Distribution Amount for such
Distribution Date.

         PRINCIPAL FUNDS: With respect to any Distribution Date, (i) the sum,
without duplication, of (a) all scheduled principal collected during the related
Due Period, (b) all Advances relating to principal made on or prior to the
Distribution Account Deposit Date, (c) Principal Prepayments exclusive of
Prepayment Charges or penalties collected during the related Prepayment Period,
(d) the Stated Principal Balance of each Mortgage Loan that was repurchased by
the Seller pursuant to Sections 2.02 or 2.03 or by EMC pursuant to Section 4.21,
(e) the aggregate of all Substitution Adjustment Amounts for the related
Determination Date in connection with the substitution of Mortgage Loans
pursuant to Section 2.03(c), (e) all Liquidation Proceeds and Subsequent
Recoveries collected during the related Prepayment Period (to the extent such
Liquidation Proceeds and Subsequent Recoveries relate to principal) and remitted
by the Company or the related Servicer to the Distribution Account pursuant to
this Agreement or the related Servicing Agreement and (f) amounts in respect of
principal paid by the Majority Class C Certificateholder pursuant to Section
11.01 minus (ii) all amounts required to be reimbursed pursuant to Sections
5.02, 5.04, 5.06 and 5.08 or as otherwise set forth in this Agreement.

                                      -30-
<PAGE>

         PRINCIPAL REMITTANCE AMOUNT: With respect to each Distribution Date,
the sum of the amounts listed in clauses (a) through (e) of the definition of
Principal Funds.

         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, 4.21 and 11.01 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 Company or the related Servicer, as
appropriate, in accordance with the terms of the related Mortgage Note.

         PRIVATE CERTIFICATE: Each of the Class P, Class C and Residual
Certificates.

         PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated July 29, 2004
relating to the public offering of the Offered Certificates.

         PROTECTED ACCOUNT: Each account established and maintained by the
Company with respect to receipts on the Mortgage Loans and REO Property in
accordance with Section 5.01 hereof or by the related Servicer in accordance
with the related Servicing Agreement.

         PUD: A Planned Unit Development.

         PURCHASE PRICE: With respect to any Mortgage Loan required to be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof, an amount
equal to the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as of the date of such purchase plus (ii) accrued interest thereon
at the applicable Mortgage Rate through the first day of the month in which the
Purchase Price is to be distributed to Certificateholders, reduced by any
portion of the Servicing Fee, Servicing Advances and Advances payable to the
purchaser of the Mortgage Loan plus and (iii) any costs and damages (if any)
incurred by the Trust in connection with any violation of such Mortgage Loan of
any predatory lending laws.

         RATING AGENCY: Each of Moody's and S&P. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.

         REALIZED LOSS: With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the unpaid principal balance of such Mortgage Loan as of the commencement of
the calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal

                                      -31-
<PAGE>

to the annual rate at which interest was then accruing on such Mortgage Loan and
(B) on a principal amount equal to the Stated Principal Balance of such Mortgage
Loan as of the close of business on the Distribution Date during such calendar
month, minus (v) the proceeds, if any, received in respect of such Mortgage Loan
during the calendar month in which such Final Recovery Determination was made,
net of amounts that are payable therefrom to the Company pursuant to this
Agreement or the applicable Servicer pursuant to the related Servicing
Agreement.

         With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, minus (iv)
the aggregate of all unreimbursed Advances and Servicing Advances.

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

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

         In addition, to the extent the Master Servicer receives Subsequent
Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss
with respect to that Mortgage Loan will be reduced to the extent such Subsequent
Recoveries are applied to reduce the Certificate Principal Balance of any Class
of Certificates on any Distribution Date.

         RECORD DATE: With respect to the Class A-1, Class A-2, Class A-3, Class
A-4, Class C, Class P and Class R Certificates and any Distribution Date, the
close of business on the last Business Day of the month preceding the month in
which such Distribution Date occurs. With respect to any Distribution Date and
the Class A-5, Class A-6, Class M-1, Class M-2 and Class B Certificates, so long
as such Certificates are Book-Entry Certificates, the Business Day preceding
such Distribution Date, and otherwise, the close of business on the last
Business Day of the month preceding the month in which such Distribution Date
occurs.

                                      -32-
<PAGE>

         REFERENCE BANKS: Shall mean leading banks selected by the Securities
Administrator and engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) which have been designated as such by the Securities Administrator
and (iii) which are not controlling, controlled by, or under common control
with, the Depositor, the Seller or the Master Servicer.

         REFERENCE BANK RATE: With respect to any Accrual Period shall mean the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
0.03125%, of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in an amount approximately equal to the
aggregate Certificate Principal Balance of the Class A-5, Class A-6, Class M-1,
Class M-2 and Class B Certificates for such Accrual Period, provided that at
least two such Reference Banks provide such rate. If fewer than two offered
rates appear, the Reference Bank Rate will be the arithmetic mean, rounded
upwards, if necessary, to the nearest whole multiple of 0.03125%, of the rates
quoted by one or more major banks in New York City, selected by the Securities
Administrator, as of 11:00 a.m., New York City time, on such date for loans in
United States dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
the Class A-5, Class A-6, Class M-1, Class M-2 and Class B Certificates for such
Accrual Period.

         REGULAR CERTIFICATE: Any Certificate other than a Residual Certificate.

         RELIEF ACT: The Servicemembers Civil Relief Act, formerly known as the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended or any similar state
law.

         REMAINING EXCESS SPREAD: With respect to any Distribution Date is the
Excess Spread less the any Extra Principal Distribution Amount, in each case for
such Distribution Date.

         REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.

         REMIC I: The segregated pool of assets described in Section 6.06(a).

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

         REMIC I INTERESTS: The REMIC I Regular Interests and the Class R-1
Certificates.

         REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC I Regular Interest A-1, REMIC I Regular

                                      -33-
<PAGE>

Interest A-2, REMIC I Regular Interest A-3, REMIC I Regular Interest A-4, REMIC
I Regular Interest A-5, REMIC I Regular Interest M-1, REMIC I Regular Interest
M-2 and REMIC I Regular Interest B, in each case as of such date of
determination.

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

         REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC I Regular Interest
A- 1, REMIC I Regular Interest A-2, REMIC I Regular Interest A-3, REMIC I
Regular Interest A-4, REMIC I Regular Interest A-5, REMIC I Regular Interest
M-1, REMIC I Regular Interest M-2 and REMIC I Regular Interest B and the
denominator of which is the aggregate of the Uncertificated Balances of REMIC I
Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest
A-3, REMIC I Regular Interest A-4, REMIC I Regular Interest A-5, REMIC I Regular
Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B and REMIC
I Regular Interest ZZ.

         REMIC I REGULAR INTEREST ZZ MAXIMUM INTEREST DEFERRAL AMOUNT: With
respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I Regular Interest
ZZ for such Distribution Date on a balance equal to the Uncertificated Principal
Balance of REMIC I Regular Interest ZZ minus the REMIC I Overcollateralization
Amount, in each case for such Distribution Date, over (ii) Uncertificated
Accrued Interest on REMIC I Regular Interest A-1, REMIC I Regular Interest A-2,
REMIC I Regular Interest A-3, REMIC I Regular Interest A-4, REMIC I Regular
Interest A-5, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2 and
REMIC I Regular Interest B for such Distribution Date, with the rate on each
such REMIC I Regular Interest subject to a cap equal to the Pass-Through Rate
for the Corresponding Certificate.

         REMIC I REGULAR INTERESTS: REMIC I Regular Interest AA, REMIC I Regular
Interest A- 1, REMIC I Regular Interest A-2, REMIC I Regular Interest A-3, REMIC
I Regular Interest A-4, REMIC I Regular Interest A-5, REMIC I Regular Interest
M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B, REMIC I Regular
Interest ZZ and REMIC I Regular Interest P.

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

         REMIC I REGULAR INTEREST A-1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest A-1 shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in

                                      -34-
<PAGE>

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

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

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

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

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

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

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

                                      -35-
<PAGE>

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

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

         REMIC I REGULAR INTEREST P: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest P will not accrue interest
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Principal Balance as set forth in the Preliminary Statement hereto.

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

         REMIC II: The segregated pool of assets described in the Preliminary
Statement, consisting of the REMIC I Regular Interests.

         REMIC II INTERESTS: The REMIC II Regular Interests and the Class R-2
Certificates.

         REMIC II REGULAR INTERESTS: REMIC II Regular Interest A-1, REMIC II
Regular Interest A-2, REMIC II Regular Interest A-3, REMIC II Regular Interest
A-4, REMIC II Regular Interest A-5, REMIC II Regular Interest M-1, REMIC II
Regular Interest M-2, REMIC II Regular Interest B, REMIC II Regular Interest C
and REMIC II Regular Interest P.

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

         REMIC II REGULAR INTEREST A-2: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest A-2 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in

                                      -36-
<PAGE>

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

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

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

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

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

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

         REMIC II REGULAR INTEREST C DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the sum of (i) the Uncertificated Accrued Interest for REMIC
II Regular Interest C for such Distribution Date and (ii) any
Overcollateralization Release Amount for such Distribution Date; provided,
however that on and after the Distribution Date on which the Certificate
Principal Balance of the Certificates has

                                      -37-
<PAGE>

been reduced to zero, the REMIC II Regular Interest C Distribution Amount shall
include the Overcollateralized Amount.

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

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

         REMIC II REGULAR INTEREST P: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest P will not accrue
interest and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC III: The segregated pool of assets described in the Preliminary
Statement, consisting of the REMIC II Regular Interests.

         REMIC III CERTIFICATES: The Regular Certificates and the Class R-3
Certificates.

         REMIC III REGULAR INTEREST A-5: One of the separate non-certificated
beneficial ownership interests in REMIC III issued hereunder and designated as a
Regular Interest in REMIC III. REMIC III Regular Interest A-5 shall accrue
interest at the related Uncertificated REMIC III Pass-Through Rate in effect
from time to time, and shall be deemed to receive distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto, as such amounts are distributed in respect of the Class A-5
Certificates.

         REMIC III REGULAR INTEREST A-6: One of the separate non-certificated
beneficial ownership interests in REMIC III issued hereunder and designated as a
Regular Interest in REMIC III. REMIC III Regular Interest A-6 shall accrue
interest at the related Uncertificated REMIC III Pass-Through Rate in effect
from time to time, and shall not be entitled to distributions of principal.

         REMIC OPINION: Shall mean an Opinion of Counsel to the effect that the
proposed action will not have an adverse affect on any REMIC created hereunder.

                                      -38-
<PAGE>

         REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.

         REMIC REGULAR INTEREST: A REMIC I Regular Interest, REMIC II Regular
Interest, REMIC III Regular Interest A-5, REMIC III Regular Interest A-6 or
Regular Certificate.

         REMITTANCE DATE: Shall mean (i) with respect to the Company, the
Business Day immediately preceding the Distribution Account Deposit Date and
(ii) with respect to the related Servicer, the date specified in the related
Servicing Agreement.

         REMITTANCE REPORT: As defined in Section 6.04(d).

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

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

         REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a Request for Release, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) have a fixed Mortgage Rate not less than or more than 1% per annum higher
than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or
higher credit quality characteristics than that of the Deleted Mortgage Loan;
(iv) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (v) have a remaining term to maturity no greater than (and not more than
one year less than) that of the Deleted Mortgage Loan; (vi) not permit
conversion of the Mortgage Rate from a fixed rate to a variable rate; (vii) have
the same lien priority as the Deleted Mortgage Loan; (viii) constitute the same
occupancy type as the Deleted Mortgage Loan or be owner occupied; and (ix)
comply with each representation and warranty set forth in Section 2.03 hereof.

         REPURCHASE PRICE: With respect to each Mortgage Loan, a price equal to
(i) the outstanding principal balance of such Mortgage Loan, plus (ii) interest
on such outstanding principal balance at the Mortgage Rate (net of the Servicing
Fee Rate) from the last date through which interest has been paid to the end of
the month of repurchase, less (iii) amounts advanced by the Company or the
related Servicer in respect of such repurchased Mortgage Loan which are being
held in the Master Servicer

                                      -39-
<PAGE>

Collection Account for remittance to the Trustee plus (iv) any costs and damages
(if any) incurred by the Trust in connection with any violation of such Mortgage
Loan of any predatory lending laws.

         REQUEST FOR RELEASE: The Request for Release to be submitted by the
Seller, the Company, the related Servicer or the Master Servicer to the
Custodian substantially in the form of Exhibit H. Each Request for Release
furnished to the Custodian by the Seller, the Company, the related Servicer or
the Master Servicer shall be in duplicate and shall be executed by an officer of
such Person or a Servicing Officer (or, if furnished electronically to the
Custodian, shall be deemed to have been sent and executed by an officer of such
Person or a Servicing Officer) of the Company or the related Servicer, as
applicable.

         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 or the related Servicing Agreement.

         RESIDUAL CERTIFICATES: The Class R-1, Class R-2 and Class R-3
Certificates each evidencing the sole class of "residual interests" (within the
meaning of Section 860G(a)(2) of the Code) in the related REMIC.

         RESPONSIBLE OFFICER: With respect to the Trustee, any Vice President,
any Assistant Vice President, the Secretary, any Assistant Secretary, or any
Trust Officer with specific responsibility for the transactions contemplated
hereby, any other officer customarily performing functions similar to those
performed by any of the above designated officers or other officers of the
Trustee specified by the Trustee, as to whom, with respect to a particular
matter, such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

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

         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.

         SECURITIES ADMINISTRATOR: Wells Fargo Bank, National Association, in
its capacity as securities administrator hereunder, and its successors and
assigns.

         SELLER: EMC Mortgage Corporation, a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.

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

         SERVICER: Shall mean either Cendant, HSBC, National City, SouthTrust or
Union Federal.

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<PAGE>

         SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Company or the related Servicer of its servicing obligations
hereunder or under the related Servicing Agreement, including, but not limited
to, the cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
and including any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered in the MERS(R) System, (iii) the
management and liquidation of any REO Property (including, without limitation,
realtor's commissions) and (iv) compliance with any obligations under Section
3.07 hereof to cause insurance to be maintained.

         SERVICING AGREEMENT: Shall mean either the Cendant Servicing Agreement,
HSBC Servicing Agreement, National City Servicing Agreement, SouthTrust
Servicing Agreement or Union Federal Servicing Agreement.

         SERVICING FEE: As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as of the last day of the related Due
Period.

         SERVICING FEE RATE: 0.250% per annum.

         SERVICING MODIFICATION: With respect to any Mortgage Loan that is in
default or, in the reasonable judgment of the Company or the related Servicer,
as to which default is reasonably foreseeable, any modification which is
effected by the Company or the related Servicer in accordance with the terms of
this Agreement or the related Servicing Agreement which results in any change in
the outstanding Stated Principal Balance, any change in the Mortgage Rate or any
extension of the term of such Mortgage Loan.

         SERVICING OFFICER: Any officer of the Company or the related Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans (i) in the case of the Company, whose name and facsimile
signature appear on a list of servicing officers furnished to the Trustee by the
Company on the Closing Date pursuant to this Agreement, as such list may from
time to time be amended and (ii) in the case of the related Servicer, as to
which evidence reasonably acceptable to the Trustee, as applicable, of due
authorization, by such party has been furnished from time to time to the
Trustee.

         SOUTHTRUST: SouthTrust Mortgage Corporation, and any successor thereto.

         SOUTHTRUST ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of July 30, 2004, by and among the Seller,
SouthTrust and the Trustee evidencing the assignment of the SouthTrust Servicing
Agreement to the Trust.

         SOUTHTRUST LOANS: Those Mortgage Loans subject to this Agreement which
were purchased by the Seller from SouthTrust pursuant to the SouthTrust
Servicing Agreement.

                                      -41-
<PAGE>

         SOUTHTRUST SERVICING AGREEMENT: Shall mean the Purchase, Warranties and
Servicing Agreement, dated as of November 1, 2002, by and between the Seller and
SouthTrust, as modified by the SouthTrust Assignment Agreement.

         STARTUP DAY: The Startup Day for each REMIC formed hereunder shall be
the Closing Date.

         STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related
REO Property and any Distribution Date, the Cut-off Date Principal Balance
thereof minus the sum of (i) the principal portion of the Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Company or the related Servicer as recoveries of principal
in accordance with Section 3.09 or the related Servicing Agreement with respect
to such Mortgage Loan, that were received by the Company or the related Servicer
as of the close of business on the last day of the Prepayment Period related to
such Distribution Date and (iii) any Realized Losses on such Mortgage Loan
incurred during the related Prepayment Period. The Stated Principal Balance of a
Liquidated Loan equals zero.

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

         SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts received by
the Master Servicer during the related Due Period or surplus amounts held by the
Master Servicer to cover estimated expenses (including, but not limited to,
recoveries in respect of the representations and warranties made by the Seller
pursuant to the Mortgage Loan Purchase Agreement) specifically related to a
Liquidated Mortgage Loan or disposition of an REO Property prior to the related
Prepayment Period that resulted in a Realized Loss, after the liquidation or
disposition of such Mortgage Loan.

         SUBSERVICING AGREEMENT: Any agreement entered into between the Company
and a subservicer with respect to the subservicing of any Mortgage Loan
hereunder by such subservicer.

         SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03(c).

         SUCCESSOR MASTER SERVICER: The meaning ascribed to such term pursuant
to Section 9.01.

         TAX MATTERS PERSON: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. The holder of the greatest Percentage
Interest in a Class of Residual Certificates shall be the Tax Matters Person for
the related REMIC. The Securities Administrator, or any successor thereto or
assignee thereof shall serve as tax administrator hereunder and as agent for the
related Tax Matters Person.

         TRANSFER AFFIDAVIT: As defined in Section 7.02(c).

                                      -42-
<PAGE>

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

         TRUST FUND: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest accruing and principal due with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Class P Certificate Account,
the Net WAC Reserve Fund, the Distribution Account, the Master Servicer
Collection Account maintained by the Master Servicer and the Protected Accounts
maintained by the Company and the Servicers and all amounts deposited therein
pursuant to the applicable provisions of this Agreement and the Servicing
Agreements; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; (v) the
Servicing Agreement and the Assignment Agreements; (vi) the rights under the
Mortgage Loan Purchase Agreement, and (vii) all proceeds of the foregoing,
including proceeds of conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property. The Net WAC Reserve Fund shall
constitute an asset of the Trust Fund but will not be included in REMIC I, REMIC
II or REMIC III.

         TRUSTEE: U.S. Bank National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.

         20% CLEAN-UP CALL DATE: Shall mean the first Distribution Date upon
which the Stated Principal Balance of the Mortgage Loans as of the end of the
related Due Period is less than or equal to 20% of the aggregate Cut-off Date
Principal Balance of the Mortgage Loans.

         UNCERTIFICATED ACCRUED INTEREST: With respect to each Uncertificated
REMIC Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass-Through Rate on the Uncertificated
Principal Balance or Uncertificated Notional Amount, as applicable, of such
REMIC Regular Interest. In each case, Uncertificated Accrued Interest will be
reduced by any Prepayment Interest Shortfalls and shortfalls resulting from
application of the Relief Act (allocated to such REMIC Regular Interests as set
forth in Sections 1.02 and 6.07).

         UNCERTIFICATED NOTIONAL AMOUNT: With respect to REMIC II Regular
Interest C, the aggregate Uncertificated Principal Balance of the REMIC I
Regular Interests (other than REMIC I Regular Interest P). With respect to REMIC
III Regular Interest A-6, the aggregate Uncertificated Principal Balance of
REMIC II Regular Interest A-5.

         UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest, the principal amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be

                                      -43-
<PAGE>

reduced by all distributions of principal made on such REMIC Regular Interest on
such Distribution Date pursuant to Sections 6.06 and 6.07 and, if and to the
extent necessary and appropriate, shall be further reduced on such Distribution
Date by Realized Losses as provided in Sections 6.06 and 6.07. The
Uncertificated Principal Balance of each REMIC Regular Interest shall never be
less than zero.

         UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to any REMIC I
Regular Interest other than REMIC I Regular Interest P and any Distribution
Date, a per annum rate equal to the average of the Net Mortgage Rates of the
Mortgage Loans as of the first day of the related Due Period, weighted on the
basis of the Stated Principal Balances as of the first day of the related Due
Period. With respect to REMIC I Regular Interest P and any Distribution Date,
0.00%.

         UNCERTIFICATED REMIC II PASS-THROUGH RATE:

         With respect to REMIC II Regular Interest A-1 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, the lesser of
(a) 5.330% per annum and (b) the product of (x) 96.9090909091% and (y) the
weighted average of the REMIC I Pass-Through Rates on the REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest and (ii) for each Distribution Date thereafter,
the lesser of (a) 5.830% per annum and (b) the product of (x) 97.1666666667% and
(y) the weighted average of the REMIC I Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest.

         With respect to REMIC II Regular Interest A-2 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, the lesser of
(a) 5.500% per annum and (b) the product of (x) 100.0000000000% and (y) the
weighted average of the REMIC I Pass-Through Rates on the REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest and (ii) for each Distribution Date thereafter,
the lesser of (a) 6.000% per annum and (b) the product of (x) 100.0000000000%
and (y) the weighted average of the REMIC I Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest.

         With respect to REMIC II Regular Interest A-3 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, the lesser of
(a) 5.250% per annum and (b) the product of (x) 95.4545454545% and (y) the
weighted average of the REMIC I Pass-Through Rates on the REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest and (ii) for each Distribution Date thereafter,
the lesser of (a) 5.750% per annum and (b) the product of (x) 95.8333333333% and
(y) the weighted average of the REMIC I Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest.

         With respect to REMIC II Regular Interest A-4 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, the lesser of
(a) 5.250% per annum and (b) the product of (x) 95.4545454545% and (y) the
weighted average of the REMIC I Pass-Through Rates on the

                                      -44-
<PAGE>

REMIC I Regular Interests, weighted on the basis of the Uncertificated Principal
Balance of each such REMIC I Regular Interest and (ii) for each Distribution
Date thereafter, the lesser of (a) 5.750% per annum and (b) the product of (x)
95.8333333333% and (y) the weighted average of the REMIC I Pass-Through Rates on
the REMIC I Regular Interests, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC I Regular Interest.

         With respect to REMIC II Regular Interest A-5 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, the lesser of
(a) 8.000% per annum and (b) the product of (x) 145.4545454545% and (y) the
weighted average of the REMIC I Pass-Through Rates on the REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest and (ii) for each Distribution Date thereafter,
the lesser of (a) 8.500% per annum and (b) the product of (x) 141.6666666667%
and (y) the weighted average of the REMIC I Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance
of each such REMIC I Regular Interest.

         With respect to REMIC II Regular Interest M-1 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, One-Month LIBOR
plus 0.60% per annum and (ii) for each Distribution Date thereafter, One-Month
LIBOR plus 0.90% per annum, in each case subject to the related Net WAC Rate
Cap.

         With respect to REMIC II Regular Interest M-2 and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, One-Month LIBOR
plus 1.15% per annum and (ii) for each Distribution Date thereafter, One-Month
LIBOR plus 1.725% per annum, in each case subject to the related Net WAC Rate
Cap.

         With respect to REMIC II Regular Interest B and (i) any Distribution
Date which occurs on or prior to the Optional Termination Date, One-Month LIBOR
plus 1.90% per annum and (ii) for each Distribution Date thereafter, One-Month
LIBOR plus 2.850% per annum, in each case subject to the related Net WAC Rate
Cap.

         With respect to REMIC II Regular Interest P, 0.00%.

         With respect to REMIC II Regular Interest C, a per annum rate equal to
the percentage equivalent of a fraction, the numerator of which is (x) the sum
of the amounts calculated pursuant to clauses (A) through (J) below, and the
denominator of which is (y) the aggregate of the Uncertificated Principal
Balances of the REMIC I Regular Interests (other than REMIC I Regular Interest
P). For purposes of calculating the Uncertificated REMIC II Pass-Through Rate
for REMIC II Regular Interest C, the numerator is equal to the sum of the
following components:

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

                                      -45-
<PAGE>

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

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

                  (D) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest A-3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest A-3;

                  (E) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest A-4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest A-4;

                  (F) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest A-5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest A-5;

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

                  (H) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest M-2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest M-2;

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

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

UNCERTIFICATED REMIC III PASS-THROUGH RATE:

         With respect to REMIC III Regular Interest A-5, One-Month LIBOR plus
0.50% per annum, subject to a cap equal to the weighted average of the
Uncertificated REMIC II Pass- Through Rate with respect to REMIC II Regular
Interest A-5, weighted on the basis of the Uncertificated Principal Balance
thereof immediately prior to such Distribution Date.

                                      -46-
<PAGE>

         With respect to REMIC III Regular Interest A-6, on any Distribution
Date, the excess, if any, of (A) the Uncertificated REMIC II Pass-Through Rate
with respect to REMIC II Regular Interest A-5 over (B) the lesser of (x)
One-Month LIBOR plus 0.50% per annum, and (y) an amount equal to the weighted
average of the Uncertificated REMIC II Pass-Through Rate with respect to REMIC
II Regular Interest A-5, weighted on the basis of the Uncertificated Principal
Balance thereof immediately prior to such Distribution Date.

         UNCERTIFICATED REMIC REGULAR INTEREST: The REMIC I Regular Interests,
the REMIC II Regular Interests, REMIC III Regular Interest A-5 and REMIC III
Regular Interest A-6.

         UNION FEDERAL: Union Federal Bank of Indianapolis, and any successor
thereto.

         UNION FEDERAL ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of July 30, 2004, by and among the Seller, Union
Federal and the Trustee evidencing the assignment of the Union Federal Servicing
Agreement to the Trust.

         UNION FEDERAL LOANS: Those Mortgage Loans subject to this Agreement
which were purchased by the Seller from Union Federal pursuant to the Union
Federal Servicing Agreement.

         UNION FEDERAL SERVICING AGREEMENT: Shall mean the Amended and Restated
Forward Commitment Flow Mortgage Loan Purchase and Servicing Agreement, dated as
of March 4, 2003, by and between the Seller and Union Federal, as modified by
the Union Federal Assignment Agreement.

         UNPAID INTEREST SHORTFALLS: Shall mean Interest Shortfalls net of
payments by the Company, the related Servicer or the Master Servicer in respect
of Compensating Interest.

         VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions
hereunder. Voting Rights shall be allocated (i) 94.50% to the Certificates
(other than the Class C, Class P and the Residual Certificates), (ii) 1% to the
Class P Certificates, (iii) 3% to the Class C Certificates and (iv) 0.50% to
each Class of Residual Certificates, with the allocation among the Certificates
other than the Class C, Class P and Residual Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes. Voting Rights will be allocated
among the Certificates of each such Class in accordance with their respective
Percentage Interests.

         Section 1.02      ALLOCATION OF CERTAIN INTEREST SHORTFALLS.

         For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class M-1, Class M-2, Class B and Class C Certificates for any
Distribution Date, (1) the aggregate amount of any Unpaid Interest Shortfalls in
respect of the Mortgage Loans for any Distribution Date shall be allocated
FIRST, in reduction of amounts otherwise distributable to the Class C
Certificates and Class R Certificates, AND THEREAFTER among the Offered
Certificates in proportion to the amount of the Monthly Interest

                                      -47-
<PAGE>

Distributable Amount that would have been allocated to such Certificates in the
absence of such Unpaid Interest Shortfalls and (2) the interest portion of
Realized Losses for the Mortgage Loans will be allocated first, to the Class C
Certificates based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Certificate Notional Balance thereof, second
to the Class B Certificates, third to the Class M-2 Certificates, fourth to the
Class M-1 Certificates and following the Cross-Over Date to the Senior
Certificates, on a pro rata basis.

         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 Unpaid Interest Shortfalls incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated first, to
Uncertificated Accrued Interest payable to REMIC I Regular Interest AA and REMIC
I Regular Interest ZZ up to an aggregate amount equal to the REMIC I Interest
Loss Allocation Amount, 98% and 2%, respectively, and thereafter among REMIC I
Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest
A-3, REMIC I Regular Interest A-4, REMIC I Regular Interest A-5, REMIC I Regular
Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B and REMIC
I Regular Interest ZZ, pro rata, based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC I Pass- Through
Rate on the respective Uncertificated Principal Balance of each such REMIC I
Regular Interest.

         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 Unpaid Interest Shortfalls incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated first to REMIC II
Regular Interest C, and then, pro rata, to REMIC II Regular Interest A-1, REMIC
II Regular Interest A-2, REMIC II Regular Interest A-3, REMIC II Regular
Interest A-4, REMIC II Regular Interest A-5, REMIC II Regular Interest M-1,
REMIC II Regular Interest M-2 and REMIC II Regular Interest B, in each case to
the extent of one month's interest at the then applicable respective
Uncertificated REMIC II Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC II Regular Interest.

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                                   ARTICLE II

                            CONVEYANCE OF TRUST FUND
                         REPRESENTATIONS AND WARRANTIES

         Section 2.01      CONVEYANCE OF TRUST FUND.

                  Pursuant to the Mortgage Loan Purchase Agreement, the Seller
sold, transferred, assigned, set over and otherwise conveyed to the Depositor,
without recourse, all the right, title and interest of the Seller in and to the
assets in the Trust Fund.

                  The Seller has entered into this Agreement in consideration
for the purchase of the Mortgage Loans by the Depositor pursuant to the Mortgage
Loan Purchase Agreement and has agreed to take the actions specified herein.

                  The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the use and benefit of the Certificateholders, without recourse, all
the right, title and interest of the Depositor in and to the Trust Fund.

                  In connection with such sale, the Depositor has delivered to,
and deposited with, the Trustee or the Custodian, as its agent, the following
documents or instruments with respect to each Mortgage Loan so assigned: (i) the
original Mortgage Note, including any riders thereto, endorsed without recourse
to the order of "U.S. Bank National Association, as Trustee for
certificateholders of Bear Stearns Asset Backed Securities I LLC, Asset Backed
Certificates, Series 2004-AC4," and showing to the extent available to the
Seller an unbroken chain of endorsements from the original payee thereof to the
Person endorsing it to the Trustee, (ii) the original Mortgage and, if the
related Mortgage Loan is a MOM Loan, noting the presence of the MIN and language
indicating that such Mortgage Loan is a MOM Loan, which shall have been recorded
(or if the original is not available, a copy), with evidence of such recording
indicated thereon (or if clause (x) in the proviso below applies, shall be in
recordable form), (iii) unless the Mortgage Loan is a MOM Loan, the assignment
(either an original or a copy, which may be in the form of a blanket assignment
if permitted in the jurisdiction in which the Mortgaged Property is located) to
the Trustee of the Mortgage with respect to each Mortgage Loan in the name of
"U.S. Bank National Association, as Trustee for certificateholders of Bear
Stearns Asset Backed Securities I LLC, Asset Backed Certificates, Series
2004-AC4," which shall have been recorded (or if clause (x) in the proviso below
applies, shall be in recordable form) (iv) an original or a copy of all
intervening assignments of the Mortgage, if any, to the extent available to the
Seller, with evidence of recording thereon, (v) the original policy of title
insurance or mortgagee's certificate of title insurance or commitment or binder
for title insurance, if available, or a copy thereof, or, in the event that such
original title insurance policy is unavailable, a photocopy thereof, or in lieu
thereof, a current lien search on the related Mortgaged Property and (vi)
originals or copies of all available assumption, modification or substitution
agreements, if any; provided, however, that in lieu of the foregoing, the Seller
may deliver the following documents, under the circumstances set forth below:
(x) if any

                                      -49-
<PAGE>

Mortgage, assignment thereof to the Trustee or intervening assignments thereof
have been delivered or are being delivered to recording offices for recording
and have not been returned in time to permit their delivery as specified above,
the Depositor may deliver a true copy thereof with a certification by the Seller
or the title company issuing the commitment for title insurance, on the face of
such copy, substantially as follows: "Certified to be a true and correct copy of
the original, which has been transmitted for recording"; and (y) in lieu of the
Mortgage Notes relating to the Mortgage Loans identified in the list set forth
in Exhibit J, the Depositor may deliver a lost note affidavit and indemnity and
a copy of the original note, if available; and provided, further, however, that
in the case of Mortgage Loans which have been prepaid in full after the Cut-Off
Date and prior to the Closing Date, the Depositor, in lieu of delivering the
above documents, may deliver to the Trustee and its Custodian a certification of
a Servicing Officer to such effect and in such case shall deposit all amounts
paid in respect of such Mortgage Loans, in the Master Servicer Collection
Account or in the Distribution Account on the Closing Date. In the case of the
documents referred to in clause (x) above, the Depositor shall deliver such
documents to the Trustee or its Custodian promptly after they are received. The
Seller shall cause, at its expense, the Mortgage and intervening assignments, if
any, and to the extent required in accordance with the foregoing, the assignment
of the Mortgage to the Trustee to be submitted for recording promptly after the
Closing Date; provided that the Seller need not cause to be recorded any
assignment (a) in any jurisdiction under the laws of which, as evidenced by an
Opinion of Counsel addressed to the Trustee delivered by the Seller to the
Trustee and the Rating Agencies, the recordation of such assignment is not
necessary to protect the Trustee's interest in the related Mortgage Loan or (b)
if MERS is identified on the Mortgage or on a properly recorded assignment of
the Mortgage as mortgagee of record solely as nominee for Seller and its
successors and assigns. In the event that the Seller, the Depositor or the
Master Servicer gives written notice to the Trustee that a court has
recharacterized the sale of the Mortgage Loans as a financing, the Seller shall
submit or cause to be submitted for recording as specified above or, should the
Seller fail to perform such obligations, the Master Servicer shall cause each
such previously unrecorded assignment to be submitted for recording as specified
above at the expense of the Trust. In the event a Mortgage File is released to
the Company or the Servicer as a result of such Person having completed a
Request for Release, the Custodian shall, if not so completed, complete the
assignment of the related Mortgage in the manner specified in clause (iii)
above.

                  In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Seller further agrees that it will cause,
at the Seller's own expense, within 30 days after the Closing Date, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Seller to
the Depositor and by the Depositor to the Trustee in accordance with this
Agreement for the benefit of the Certificateholders by including (or deleting,
in the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files (a) the code in the field which identifies the
specific Trustee and (b) the code in the field "Pool Field" which identifies the
series of the Certificates issued in connection with such Mortgage Loans. The
Seller further agrees that it will not, and will not permit the Company, any
Servicer or the Master Servicer to, and the Master Servicer agrees that it will
not, alter the codes referenced in this paragraph with respect to any Mortgage
Loan during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement or the Mortgage Loan
Purchase Agreement.

                                      -50-
<PAGE>

         Section 2.02      ACCEPTANCE OF THE MORTGAGE LOANS.

                  (a) Based on the Initial Certification received by it from the
Custodian, the Trustee acknowledges receipt of, subject to the further review
and exceptions reported by the Custodian pursuant to the procedures described
below, the documents (or certified copies thereof) delivered to the Trustee or
the Custodian on its behalf pursuant to Section 2.01 and declares that it holds
and will continue to hold directly or through a custodian those documents and
any amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it in trust for the use and benefit of all present and
future Holders of the Certificates. On the Closing Date, the Trustee or the
Custodian on its behalf will deliver an Initial Certification confirming whether
or not it has received the Mortgage File for each Mortgage Loan, but without
review of such Mortgage File, except to the extent necessary to confirm whether
such Mortgage File contains the original Mortgage Note or a lost note affidavit
and indemnity in lieu thereof. No later than 90 days after the Closing Date, the
Trustee or the Custodian on its behalf shall, for the benefit of the
Certificateholders, review each Mortgage File delivered to it and execute and
deliver to the Seller and, if reviewed by the Custodian, the Trustee, an Interim
Certification. In conducting such review, the Trustee or the Custodian on its
behalf will ascertain whether all required documents have been executed and
received and whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in Exhibit B to this Agreement, as supplemented (provided,
however, that with respect to those documents described in subclauses (iv) and
(vi) of Section 2.01, such obligations shall extend only to documents actually
delivered pursuant to such subclauses). In performing any such review, the
Trustee and the Custodian may conclusively rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If the Trustee or the Custodian on its behalf finds any
document constituting part of the Mortgage File not to have been executed or
received, or to be unrelated to the Mortgage Loans identified in Exhibit B or to
appear to be defective on its face, the Trustee or the Custodian on its behalf
shall include such information in the exception report. The Seller shall correct
or cure any such defect or, if prior to the end of the second anniversary of the
Closing Date, the Seller may substitute for the related Mortgage Loan a
Replacement Mortgage Loan, which substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03 or shall deliver
to the Trustee an Opinion of Counsel addressed to the Trustee to the effect that
such defect does not materially or adversely affect the interests of the
Certificateholders in such Mortgage Loan within 60 days from the date of notice
from the Trustee of the defect and if the Seller fails to correct or cure the
defect or deliver such opinion within such period, the Seller will, subject to
Section 2.03, within 90 days from the notification of the Trustee purchase such
Mortgage Loan at the Purchase Price; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the Mortgage,
assignment thereof to the Trustee, or intervening assignments thereof with
evidence of recording thereon because such documents have been submitted for
recording and have not been returned by the applicable jurisdiction, the Seller
shall not be required to purchase such Mortgage Loan if the Seller delivers such
documents promptly upon receipt, but in no event later than 360 days after the
Closing Date.

                  (b) No later than 180 days after the Closing Date, the Trustee
or the Custodian on its behalf will review, for the benefit of the
Certificateholders, the Mortgage Files and will execute and

                                      -51-
<PAGE>

deliver or cause to be executed and delivered to the Seller and, if reviewed by
the Custodian, the Trustee, a Final Certification. In conducting such review,
the Trustee or the Custodian on its behalf will ascertain whether each document
required to be recorded has been returned from the recording office with
evidence of recording thereon and the Trustee or the Custodian on its behalf has
received either an original or a copy thereof, as required in Section 2.01
(provided, however, that with respect to those documents described in subclauses
(iv) and (vi) of Section 2.01, such obligations shall extend only to documents
actually delivered pursuant to such subclauses). If the Trustee or the Custodian
on its behalf finds any document with respect to a Mortgage Loan has not been
received, or to be unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified in
Exhibit B or to appear defective on its face, the Trustee or the Custodian on
its behalf shall note such defect in the exception report attached to the Final
Certification and shall promptly notify the Seller. The Seller shall correct or
cure any such defect or, if prior to the end of the second anniversary of the
Closing Date, the Seller may substitute for the related Mortgage Loan a
Replacement Mortgage Loan, which substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03 or shall deliver
to the Trustee an Opinion of Counsel addressed to the Trustee to the effect that
such defect does not materially or adversely affect the interests of
Certificateholders in such Mortgage Loan within 60 days from the date of notice
from the Trustee of the defect and if the Seller is unable within such period to
correct or cure such defect, or to substitute the related Mortgage Loan with a
Replacement Mortgage Loan or to deliver such opinion, the Seller shall, subject
to Section 2.03, within 90 days from the notification of the Trustee, purchase
such Mortgage Loan at the Purchase Price; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the Mortgage,
assignment thereof to the Trustee or intervening assignments thereof with
evidence of recording thereon, because such documents have not been returned by
the applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan, if the Seller delivers such documents promptly upon receipt, but
in no event later than 360 days after the Closing Date.

                  (c) In the event that a Mortgage Loan is purchased by the
Seller in accordance with subsections 2.02(a) or (b) above or Section 2.03, the
Seller shall remit the applicable Purchase Price to the Master Servicer for
deposit in the Master Servicer Collection Account and shall provide written
notice to the Trustee detailing the components of the Purchase Price, signed by
a Servicing Officer. Upon deposit of the Purchase Price in the Master Servicer
Collection Account and upon receipt of a Request for Release with respect to
such Mortgage Loan, the Trustee or the Custodian will release to the Seller the
related Mortgage File and the Trustee shall execute and deliver all instruments
of transfer or assignment, without recourse, representation or warranty
furnished to it by the Seller, as are necessary to vest in the Seller title to
and rights under the Mortgage Loan. Such purchase shall be deemed to have
occurred on the date on which the deposit into the Master Servicer Collection
Account was made. The Trustee shall promptly notify the Rating Agencies of such
repurchase. The obligation of the Seller to cure, repurchase or substitute for
any Mortgage Loan as to which a defect in a constituent document exists shall be
the sole remedies respecting such defect available to the Certificateholders or
to the Trustee on their behalf.

                  (d) The Seller shall deliver to the Trustee or the Custodian
on its behalf, and Trustee agrees to accept the Mortgage Note and other
documents constituting the Mortgage File with

                                      -52-
<PAGE>

respect to any Replacement Mortgage Loan, which the Trustee or the Custodian
will review as provided in subsections 2.02(a) and 2.02(b), provided, that the
Closing Date referred to therein shall instead be the date of delivery of the
Mortgage File with respect to each Replacement Mortgage Loan.

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

                  (a) The Company hereby represents and warrants to the Master
Servicer, the Depositor, the Securities Administrator and the Trustee as
follows, as of the Closing Date:

                  (i) It is duly organized and is validly existing and in good
         standing under the laws of the State of Delaware and is duly authorized
         and qualified to transact any and all business contemplated by this
         Agreement to be conducted by it in any state in which a Mortgaged
         Property related to an EMC Mortgage Loan 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 EMC
         Mortgage Loan, to service the EMC 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) It has the full corporate power and authority to service
         each EMC Mortgage Loan, and to execute, deliver and perform, and to
         enter into and consummate the transactions contemplated by this
         Agreement and has duly authorized by all necessary corporate action on
         its part the execution, delivery and performance of this Agreement; and
         this Agreement, assuming the due authorization, execution and delivery
         hereof by the other parties hereto, constitutes its legal, valid and
         binding obligation, enforceable against it in accordance with its
         terms, except that (a) the enforceability hereof may be limited by
         bankruptcy, insolvency, moratorium, receivership and other similar laws
         relating to creditors' rights generally and (b) the remedy of specific
         performance and injunctive and other forms of equitable relief may be
         subject to equitable defenses and to the discretion of the court before
         which any proceeding therefor may be brought.

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

                                      -53-
<PAGE>

         or governmental body having jurisdiction over it which breach or
         violation may materially impair its ability to perform or meet any of
         its obligations under this Agreement.

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

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

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

                  (b) Wells Fargo Bank, National Association, in its capacity as
Master Servicer and Securities Administrator hereby represents and warrants to
the Seller, the Depositor and the Trustee as follows, as of the Closing Date:

                  (i) It is a national banking association duly formed, validly
         existing and in good standing under the laws of the United States of
         America and is duly authorized and qualified to transact any and all
         business contemplated by this Agreement to be conducted by the Master
         Servicer and the Securities Administrator 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) It 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
         its legal, valid and binding obligation, enforceable against it in
         accordance with its terms, except that (a) the enforceability hereof
         may be limited by bankruptcy, insolvency, moratorium, receivership and
         other similar laws relating to creditors' rights generally and (b) the
         remedy of specific performance and injunctive and other forms of
         equitable relief may be subject to equitable defenses and to the
         discretion of the court before which any proceeding therefor may be
         brought.

                                      -54-
<PAGE>

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

                  (iv) No litigation is pending or, to the best of its
         knowledge, threatened, against it that would materially and adversely
         affect the execution, delivery or enforceability of this Agreement or
         its ability to perform any of its other obligations under this
         Agreement in accordance with the terms hereof.

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

                  (c) The Seller hereby represents and warrants to the
Depositor, the Securities Administrator, the Master Servicer and the Trustee as
follows, as of the Closing Date:

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

                                      -55-
<PAGE>

         bankruptcy, insolvency, moratorium, receivership and other similar laws
         relating to creditors' rights generally and (b) the remedy of specific
         performance and injunctive and other forms of equitable relief may be
         subject to equitable defenses and to the discretion of the court before
         which any proceeding therefor may be brought.

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

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

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

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

                  (vii) As of the Closing Date, the representations and
         warranties concerning the Mortgage Loans set forth in Section 7 of the
         Mortgage Loan Purchase Agreement are true and correct in all material
         respects.

                  (c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty set forth in Section 7 of the Mortgage Loan
Purchase Agreement that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach

                                      -56-
<PAGE>

shall give prompt written notice thereof to the other parties. The Seller hereby
covenants with respect to the representations and warranties set forth in
Section 7 of the Mortgage Loan Purchase Agreement, that within 90 days of the
discovery of a breach of any representation or warranty set forth therein that
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, it shall cure such breach in all material respects and, if such
breach is not so cured, (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage
Loan") from the Trust Fund and substitute in its place a Replacement Mortgage
Loan, in the manner and subject to the conditions set forth in this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at
the Purchase Price in the manner set forth below; provided that any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of an Opinion of Counsel if
required by Section 2.05 hereof and any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for Release. The Seller shall promptly reimburse the Master Servicer and
the Trustee for any expenses reasonably incurred by the Master Servicer or the
Trustee in respect of enforcing the remedies for such breach. To enable the
Securities Administrator to amend the Mortgage Loan Schedule, the Seller shall,
unless it cures such breach in a timely fashion pursuant to this Section 2.03,
promptly notify the Securities Administrator whether it intends either to
repurchase, or to substitute for, the Mortgage Loan affected by such breach.
With respect to the representations and warranties in Section 7 of the Mortgage
Loan Purchase Agreement that are made to the best of the Seller's knowledge, if
it is discovered by any of the Depositor, the Master Servicer, the Seller, the
Securities Administrator 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
Seller's lack of knowledge with respect to the substance of such representation
or warranty, the Seller shall nevertheless be required to cure, substitute for
or repurchase the affected Mortgage Loan in accordance with the foregoing.

                  With respect to any Replacement Mortgage Loan or Loans, the
Seller shall deliver to the Trustee for the benefit of the Certificateholders
such documents and agreements as are required by Section 2.01. No substitution
will be made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Replacement Mortgage Loans in the Due
Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
Seller. For the month of substitution, distributions to Certificateholders will
include the Scheduled Payment due on any Deleted Mortgage Loan for the related
Due Period and thereafter the Seller shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan. The Securities Administrator
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 Securities Administrator shall
deliver the amended Mortgage Loan Schedule to the Trustee and the Custodian.
Upon such substitution, the Replacement Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and the Seller shall be deemed
to have made with respect to such Replacement Mortgage Loan or Loans, as of the
date of substitution, the representations and warranties set forth in Section 7
of the Mortgage Loan Purchase Agreement with respect to such Mortgage Loan. Upon
any such substitution and the deposit into the Master Servicer Collection
Account of the amount required to be deposited

                                      -57-
<PAGE>

therein in connection with such substitution as described in the following
paragraph and receipt by the Trustee of a Request for Release for such Mortgage
Loan, the Trustee or the Custodian shall release to the Seller the Mortgage File
relating to such Deleted Mortgage Loan and held for the benefit of the
Certificateholders and the Trustee shall execute and deliver at the Seller's
direction such instruments of transfer or assignment as have been prepared by
the Seller, in each case without recourse, representation or warranty as shall
be necessary to vest in the Seller, or its respective designee, title to the
Trustee's interest in any Deleted Mortgage Loan substituted for pursuant to this
Section 2.03.

                  For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
the Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of such Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies, described in the
preceding sentence for any Distribution Date (such amount, the "Substitution
Adjustment Amount") shall be deposited into the Master Servicer Collection
Account, by the Seller delivering such Replacement Mortgage Loan on the
Determination Date for the Distribution Date relating to the Prepayment Period
during which the related Mortgage Loan became required to be purchased or
replaced hereunder.

                  In the event that the Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited into the Master Servicer
Collection Account maintained by the Master Servicer, on the Determination Date
for the Distribution Date in the month following the month during which the
Seller became obligated to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of an Opinion of Counsel if
required by Section 2.05 and the receipt of a Request for Release, the Trustee
or the Custodian shall release the related Mortgage File held for the benefit of
the Certificateholders to the Seller, and the Trustee shall execute and deliver
at such Person's direction the related instruments of transfer or assignment
prepared by the Seller, in each case without recourse, representation or
warranty as shall be necessary to transfer title from the Trustee for the
benefit of the Certificateholders and transfer the Trustee's interest to the
Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and agreed that the obligation under this Agreement of the Seller to
cure, repurchase or replace any Mortgage Loan as to which a breach has occurred
and is continuing shall constitute the sole remedies against the Seller
respecting such breach available to 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 Loans and Mortgage
Files to the Trustee or the Custodian for the benefit of the Certificateholders.

         Section 2.04      REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

                  The Depositor hereby represents and warrants to the Master
Servicer, the Securities Administrator and the Trustee as follows, as of the
date hereof and as of the Closing Date:

                                      -58-
<PAGE>

                  (i) The Depositor is duly organized and is validly existing as
         limited liability company in good standing under the laws of the State
         of Delaware and has full power and authority necessary to own or hold
         its properties and to conduct its business as now conducted by it and
         to enter into and perform its obligations under this Agreement.

                  (ii) The Depositor has the full power and authority to
         execute, deliver and perform, and to enter into and consummate the
         transactions contemplated by, this Agreement and has duly authorized,
         by all necessary 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
         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
         organizational documents 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.

                  (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 as
of the Closing Date, following the transfer of the Mortgage Loans to it by the
Seller, the Depositor had good title to the

                                      -59-
<PAGE>

Mortgage Loans and the related Mortgage Notes were subject to no offsets,
claims, defenses or counterclaims.

                  It is understood and agreed that the representations and
warranties set forth in the immediately preceding paragraph shall survive
delivery of the Mortgage Files to the Trustee or the Custodian for the benefit
of the Certificateholders. Upon discovery by the Depositor or the Trustee of a
breach of such representations and warranties, the party discovering such breach
shall give prompt written notice to the others and to each Rating Agency.

         Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
                      SUBSTITUTIONS AND REPURCHASES.

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

                  (b) Upon discovery by the Depositor, the Seller or the Master
Servicer that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of section 860G(a)(3) of the Code, the party discovering such
fact shall promptly (and in any event within 5 Business Days of discovery) give
written notice thereof to the other parties and the Trustee. In connection
therewith, the Trustee shall require the Seller, at the Seller's option, to
either (i) substitute, if the conditions in Section 2.03(c) 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 (and the
Custodian shall deliver the related Mortgage File) in the same manner, and on
the same terms and conditions, as it would a Mortgage Loan repurchased for
breach of a representation or warranty contained in Section 2.03.

         Section 2.06      COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.

         (a) The Trustee acknowledges the sale, transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has
executed, countersigned and delivered, to or upon

                                      -60-
<PAGE>

the order of the Depositor, the Certificates in authorized denominations
evidencing the entire ownership of the Trust Fund. The Trustee agrees to hold
the Trust Fund and exercise the rights referred to above for the benefit of all
present and future Holders of the Certificates and to perform the duties set
forth in this Agreement in accordance with its terms.

         (b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests, and the other assets of REMIC II for the
benefit of the holders of the REMIC II Interests. The Trustee acknowledges
receipt of the REMIC I Regular Interests (which are uncertificated) and the
other assets of REMIC II and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC II
Interests.

         (c) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC II Regular Interests, and the other assets of REMIC III for the
benefit of the holders of the REMIC III Certificates. The Trustee acknowledges
receipt of the REMIC II Regular Interests (which are uncertificated) and the
other assets of REMIC III and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC III
Certificates.

                                      -61-
<PAGE>

                                   ARTICLE III

          ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY COMPANY

         Section 3.01      THE COMPANY.

                  The Company shall service and administer the EMC Mortgage
Loans in accordance with customary and usual standards of practice of prudent
mortgage loan servicers in the respective states in which the related Mortgaged
Properties are located. In connection with such servicing and administration,
the Company shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.03, to do or cause to be done any and all
things that it may deem necessary or desirable in connection with such servicing
and administration, including but not limited to, the power and authority,
subject to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any related Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance Proceeds and
other Liquidation Proceeds, and (iv) subject to Section 3.09, to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any EMC Mortgage Loan; provided that the Company shall take no action
that is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any EMC Mortgage Loan or the rights and interests of the
Depositor and the Trustee under this Agreement.

                  Without limiting the generality of the foregoing, the Company,
in its own name or in the name of the Trust, the Depositor or the Trustee, is
hereby authorized and empowered by the Trust, the Depositor and the Trustee,
when the Company 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 EMC Mortgage Loans, and with respect to the related Mortgaged
Properties held for the benefit of the Certificateholders. The Company 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 Company to service and administer the EMC Mortgage Loans. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Company.

                  In accordance with the standards of the first paragraph of
this Section 3.01, the Company 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 relating to the EMC Mortgage Loans, which advances
shall be reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 5.03, and further as provided in Section 5.02.
All costs incurred by the Company, if any, in effecting the timely payments of
taxes and assessments on the Mortgaged Properties relating to the EMC Mortgage
Loans and related insurance premiums shall not, for the purpose of calculating

                                      -62-
<PAGE>

monthly distributions to the Certificateholders, be added to the Stated
Principal Balance under the related EMC Mortgage Loans, notwithstanding that the
terms of such Mortgage Loans so permit.

         Section 3.02      DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.

                  (a) Except as otherwise provided in this Section 3.02, when
any property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Company 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 Company is not required to exercise such
rights with respect to an EMC 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 Company 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 Company is authorized, subject to Section 3.02(b), to take or
enter into an assumption and modification agreement from or with the person to
whom such property has been or is about to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, unless prohibited by
applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Company
enters such agreement) by the applicable Required Insurance Policies. The
Company, subject to Section 3.02(b), is also authorized with the prior approval
of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Company shall not be deemed to be in default under this Section
3.02(a) by reason of any transfer or assumption that the Company reasonably
believes it is restricted by law from preventing.

                  (b) Subject to the Company's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.02(a), in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the related EMC Mortgage Loan, the Company shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment and any other term affecting the amount

                                      -63-
<PAGE>

or timing of payment on the EMC Mortgage Loan) may be changed. In addition, the
substitute Mortgagor and the Mortgaged Property must be acceptable to the
Company in accordance with its servicing standards as then in effect. The
Company 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 Company for
entering into an assumption or substitution of liability agreement will be
retained by the Company as additional servicing compensation.

         Section 3.03      SUBSERVICERS.

                  The Company shall perform all of its servicing
responsibilities hereunder or may cause a subservicer to perform any such
servicing responsibilities on its behalf, but the use by the Company of a
subservicer shall not release the Company from any of its obligations hereunder
and the Company shall remain responsible hereunder for all acts and omissions of
each subservicer as fully as if such acts and omissions were those of the
Company. The Company shall pay all fees of each subservicer from its own funds,
and a subservicer's fee shall not exceed the Servicing Fee payable to the
Company hereunder.

                  At the cost and expense of the Company, without any right of
reimbursement from its Protected Account, the Company shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange for any
servicing responsibilities to be performed by a successor subservicer; provided,
however, that nothing contained herein shall be deemed to prevent or prohibit
the Company, at the Company's option, from electing to service the related EMC
Mortgage Loans itself. In the event that the Company's responsibilities and
duties under this Agreement are terminated pursuant to Section 9.03, the Company
shall at its own cost and expense terminate the rights and responsibilities of
each subservicer effective as of the date of termination of the Company. The
Company shall pay all fees, expenses or penalties necessary in order to
terminate the rights and responsibilities of each subservicer from the Company's
own funds without reimbursement from the Trust Fund.

                  Notwithstanding the foregoing, the Company shall not be
relieved of its obligations hereunder and shall be obligated to the same extent
and under the same terms and conditions as if it alone were servicing and
administering the EMC Mortgage Loans. The Company shall be entitled to enter
into an agreement with a subservicer for indemnification of the Company by the
subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.

                  Any subservicing agreement and any other transactions or
services relating to the EMC Mortgage Loans involving a subservicer shall be
deemed to be between such subservicer and the Company alone, and neither the
Master Servicer nor the Trustee shall have any obligations, duties or
liabilities with respect to such subservicer including any obligation, duty or
liability of either the Master Servicer or the Trustee to pay such subservicer's
fees and expenses. For purposes of remittances to

                                      -64-
<PAGE>

the Master Servicer pursuant to this Agreement, the Company shall be deemed to
have received a payment on an EMC Mortgage Loan when a subservicer has received
such payment.

         Section 3.04  DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF COMPANY TO
                       BE HELD FOR TRUSTEE.

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

         Section 3.05  MAINTENANCE OF HAZARD INSURANCE.

                  The Company shall cause to be maintained, for each EMC
Mortgage Loan, hazard insurance on buildings upon, or comprising part of, the
Mortgaged Property against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where the related Mortgaged Property
is located with an insurer which is licensed to do business in the state where
the related Mortgaged Property is located. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Company shall also cause flood insurance to be
maintained on property acquired upon foreclosure or deed in lieu of foreclosure
of any EMC Mortgage Loan, to the extent described below. Pursuant to Section
5.01, any amounts collected by the Company 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 Company's normal servicing procedures) shall be deposited in
the Protected Account maintained by the Company. Any cost incurred by the
Company 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 EMC Mortgage Loan so permit. Such
costs shall be recoverable by the Company out of late payments by the related
Mortgagor or out of

                                      -65-
<PAGE>

Liquidation Proceeds to the extent permitted by Section 5.02. It is understood
and agreed that no earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired in respect of a Mortgage other
than pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
is located at the time of origination of the related EMC Mortgage Loan in a
federally designated special flood hazard area and such area is participating in
the national flood insurance program, the Company shall cause flood insurance to
be maintained with respect to such EMC Mortgage Loan. Such flood insurance shall
be in an amount equal to the least of (i) the Stated Principal Balance of the
related EMC Mortgage Loan, (ii) minimum amount required to compensate for damage
or loss on a replacement cost basis or (iii) the maximum amount of such
insurance available for the related Mortgaged Property under the Flood Disaster
Protection Act of 1973, as amended.

                  In the event that the Company shall obtain and maintain a
blanket policy insuring against hazard losses on all of the EMC Mortgage Loans,
it shall conclusively be deemed to have satisfied its obligations as set forth
in the first sentence of this Section 3.05, it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Company shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.05, and there shall have
been a loss that would have been covered by such policy, deposit in the
Protected Account maintained by the Company the amount not otherwise payable
under the blanket policy because of such deductible clause. Such deposit shall
be from the Company's own funds without reimbursement therefor. In connection
with its activities as administrator and servicer of the EMC Mortgage Loans, the
Company agrees to present, on behalf of itself, the Depositor and the Trustee
for the benefit of the Certificateholders, claims under any such blanket policy.

         Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.

                  The Company shall prepare and present on behalf of the Trustee
and the Certificateholders all claims under the Insurance Policies relating to
the EMC Mortgage Loans and take such actions (including the negotiation,
settlement, compromise or enforcement of the insured's claim) as shall be
necessary to realize recovery under such Insurance Policies. Any proceeds
disbursed to the Company in respect of such Insurance Policies shall be promptly
deposited in the Protected Account maintained by the Company upon receipt,
except that any amounts realized that are to be applied to the repair or
restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related EMC Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).

         Section 3.07 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

                  (a) The Company shall not take any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of the Company would have been covered thereunder.
The Company shall use its best efforts to keep in force

                                      -66-
<PAGE>

and effect (to the extent that the EMC Mortgage Loan requires the Mortgagor to
maintain such insurance), Primary Mortgage Insurance applicable to each EMC
Mortgage Loan. The Company shall not cancel or refuse to renew any such Primary
Mortgage Insurance Policy that is in effect at the date of the initial issuance
of the related Mortgage Note and is required to be kept in force hereunder.

                  (b) The Company agrees to present on behalf of the Trustee and
the Certificateholders, claims to the insurer under any Primary Mortgage
Insurance Policies relating to the EMC Mortgage Loans and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted EMC Mortgage Loans.
Pursuant to Section 5.01, any amounts collected by the Company under any Primary
Mortgage Insurance Policies shall be deposited in the Protected Account
maintained by the Company, subject to withdrawal pursuant to Section 5.02
hereof.

         Section 3.08 FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.

                  The Company shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy, with broad coverage
with responsible companies on all officers, employees or other persons acting in
any capacity with regard to the EMC Mortgage Loans and who handle funds, money,
documents and papers relating to the EMC Mortgage Loans. The fidelity bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Company against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such persons. Such fidelity bond shall also protect and insure the Company
against losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of an EMC
Mortgage Loan which is not in accordance with Accepted Servicing Practices. No
provision of this Section 3.08 requiring the fidelity bond and errors and
omissions insurance shall diminish or relieve the Company from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such
bond and insurance policy shall be at least equal to the corresponding amounts
required by Accepted Servicing Practices. The Company shall deliver to the
Master Servicer a certificate from the surety and the insurer as to the
existence of the fidelity bond and errors and omissions insurance policy and
shall obtain a statement from the surety and the insurer that such fidelity bond
or insurance policy shall in no event be terminated or materially modified
without thirty days prior written notice to the Master Servicer and the Trustee.
The Company shall notify the Master Servicer and the Trustee within five
business days of receipt of notice that such fidelity bond or insurance policy
will be, or has been, materially modified or terminated. The Trustee for the
benefit of the Certificateholders must be named as loss payees on the fidelity
bond and as additional insured on the errors and omissions policy.

         Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION
                      OF EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES;
                      REPURCHASES OF CERTAIN MORTGAGE LOANS.

                  (a) The Company shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
EMC Mortgage Loans as come

                                      -67-
<PAGE>

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 Company shall follow such practices and procedures as
it shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities and the requirements of the insurer under
any Required Insurance Policy; provided that the Company 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 EMC Mortgage
Loan after reimbursement to itself of such expenses and (ii) that such expenses
will be recoverable to it through Insurance Proceeds or Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Protected Account maintained by the Company pursuant to Section 5.02). If the
Company reasonably believes that Liquidation Proceeds with respect to any such
EMC Mortgage Loan would not be increased as a result of such foreclosure or
other action, such EMC Mortgage Loan will be charged-off and will become a
Liquidated Loan. The Company will give notice of any such charge-off to the
Trustee and the Securities Administrator. The Company shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided
that such costs and expenses shall be Servicing Advances and that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 5.02. If the Company has
knowledge that a Mortgaged Property that the Company 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
Company, the Company will, prior to acquiring the related Mortgaged Property,
consider such risks and only take action in accordance with its established
environmental review procedures.

                  With respect to any REO Property relating to an EMC Mortgage
Loan, 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 Company shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity hereunder. Pursuant to its efforts to sell
such REO Property, the Company shall either itself or through an agent selected
by the Company 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 Company deems to
be in the best interest of the Company and the Certificateholders for the period
prior to the sale of such REO Property. The Company shall prepare for and
deliver to the Trustee and the Securities Administrator a statement with respect
to each such REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Protected Account maintained by the Company no later than the close of
business on each Determination Date. The Company 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.

                                      -68-
<PAGE>

                  In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on an EMC Mortgage Loan, the Company shall dispose of such Mortgaged
Property prior to three years after its acquisition by the Trust Fund or, at the
expense of the Trust Fund, request more than 60 days prior to the day on which
such three-year period would otherwise expire, an extension of the three-year
grace period unless the Trustee shall have been supplied with an Opinion of
Counsel addressed to the Trustee (such opinion not to be an expense of the
Trustee) to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of REMIC I, REMIC II or REMIC III as
defined in section 860F of the Code or cause either REMIC I, REMIC II or REMIC
III to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used for the production 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 any of REMIC I, REMIC II or REMIC
III 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 Company has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such taxes.

                  The decision of the Company to foreclose on a defaulted EMC
Mortgage Loan shall be subject to a determination by the Company 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 Company 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
EMC Mortgage Loans (with interest accruing as though such Mortgage Loans were
still current) and all such income shall be deemed, for all purposes in the
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Protected Account maintained by
the Company. 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 EMC Mortgage Loan, such excess shall
be considered to be a partial Principal Prepayment for all purposes hereof.

                  The Liquidation Proceeds from any liquidation of an EMC
Mortgage Loan, net of any payment to the Company as provided above, shall be
deposited in the Protected Account maintained by the Company on the next
succeeding Determination Date following receipt thereof for distribution on the
related Distribution Date, except that any Excess Liquidation Proceeds shall be
retained by the Company as additional servicing compensation.

                                      -69-
<PAGE>

                  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 Company for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 5.02 or this Section 3.09; second, to
reimburse the Company for any unreimbursed Advances, pursuant to Section 5.02 or
this Section 3.09; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the EMC Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the EMC Mortgage Loan.

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

                  (c) The Company has no intent to foreclose on any EMC Mortgage
Loan based on the delinquency characteristics as of the Closing Date; provided,
that the foregoing does not prevent the Company from initiating foreclosure
proceedings on any date hereafter if the facts and circumstances of such EMC
Mortgage Loans including delinquency characteristics in the Company's discretion
so warrant such action.

         Section 3.10      SERVICING COMPENSATION.

                  As compensation for its activities hereunder, the Company
shall be entitled to retain or withdraw from its Protected Account out of each
payment of interest on an EMC Mortgage Loan included in the Trust Fund an amount
equal to the Servicing Fee.

                  Additional servicing compensation in the form of any Excess
Liquidation Proceeds, assumption fees, late payment charges, all Prepayment
Interest Excess on any EMC Mortgage Loan, all income and gain net of any losses
realized from Permitted Investments with respect to funds in or credited to the
Protected Account maintained by the Company shall be retained by the Company to
the extent not required to be deposited in the Protected Account maintained by
the Company pursuant to Section 5.02. The Company shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including payment of any premiums for hazard insurance, as required by Section
3.05 and maintenance of the other forms of insurance coverage required by
Section 3.07) and shall not be entitled to reimbursement therefor except as
specifically provided in Section 5.02.

         EMC will be entitled to retain any Prepayment Interest Excess pursuant
to Section 5.06(e).

         Section 3.11      REO PROPERTY.

                  (a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related EMC Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Company shall sell any such REO Property

                                      -70-
<PAGE>

as expeditiously as possible and in accordance with the provisions of this
Agreement. Pursuant to its efforts to sell such REO Property, the Company shall
protect and conserve such REO Property in the manner and to the extent required
herein, in accordance with the REMIC Provisions.

                  (b) The Company shall deposit all funds collected and received
in connection with the operation of any REO Property in respect of any EMC
Mortgage Loan into the Protected Account maintained by the Company.

                  (c) The Company, upon the final disposition of any REO
Property in respect of any EMC Mortgage Loan, shall be entitled to reimbursement
for any related unreimbursed Advances, unreimbursed Servicing Advances or
Servicing Fees from Liquidation Proceeds received in connection with the final
disposition of such REO Property; provided, that any such unreimbursed Advances
or Servicing Fees as well as any unpaid Servicing Fees may be reimbursed or
paid, as the case may be, prior to final disposition, out of any net rental
income or other net amounts derived from such REO Property.

         Section 3.12      LIQUIDATION REPORTS.

                  Upon the foreclosure of any Mortgaged Property relating to an
EMC Mortgage Loan or the acquisition thereof by the Trust Fund pursuant to a
deed-in-lieu of foreclosure, the Company shall submit a liquidation report to
the Master Servicer containing such information as shall be mutually acceptable
to the Company and the Master Servicer with respect to such Mortgaged Property.

         Section 3.13      ANNUAL CERTIFICATE AS TO COMPLIANCE.

                  (a) The Company will deliver to the Master Servicer not later
than March 1, 2005 and not later than March 1 of each year thereafter, a
certificate of a Servicing Officer stating, as to each signatory thereof, that
(i) a review of the activities of the Company during the preceding calendar year
and of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Company has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof except for such defaults as such officer in its good
faith judgment believe to be immaterial.

                  (b) (i) The Company will deliver to the Master Servicer, on or
before March 1 of each year beginning March 1, 2005 (or, if any such day is not
a Business Day, the immediately preceding Business Day), or on any alternative
date specified by the Master Servicer upon thirty (30) days written request, a
certification containing the information set forth in Exhibit L. Such
certification shall be signed by the senior officer in charge of servicing of
the Company. In addition, the Company shall provide such other information with
respect to the EMC Mortgage Loans and the servicing and administration thereof
within the control of the Company which shall be required to enable the Master
Servicer to comply with the reporting requirements of the Securities and
Exchange Act of 1934, as amended.

                                      -71-
<PAGE>

                           (ii) The Company shall indemnify and hold harmless
the Master Servicer and its officers, directors, agents and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach by the Company or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.13(b) or the Company's
negligence, bad faith or willful misconduct in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Master Servicer, then the Company agrees that it shall contribute
to the amount paid or payable by the Master Servicer as a result of the losses,
claims, damages or liabilities of the Master Servicer in such proportion as is
appropriate to reflect the relative fault of the Master Servicer on the one hand
and the Company on the other in connection with a breach of the Company's
obligations under this Section 3.13(b).

         Section 3.14 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' SERVICING
                      REPORT.

                  Not later than March 1, 2005 and not later than March 1 of
each year thereafter, the Company at its expense shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to furnish a statement, in a form acceptable for
filing with the Commission on an Exhibit to Form 10-K, to the Master Servicer to
the effect that, with respect to the preceding calendar year such firm has
examined certain documents and records relating to the Company's servicing of
mortgage loans of the same type as the EMC Mortgage Loans pursuant to servicing
agreements substantially similar to this Agreement, which agreements may include
this Agreement, and that, on the basis of such an examination, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Company's servicing has
been conducted in compliance with the agreements examined pursuant to this
Section 3.14, except for (i) such exceptions as such firm shall believe to be
immaterial,(ii) such other exceptions as shall be set forth in such statement
and (iii) such exceptions that the Uniform Single Attestation Program for
Mortgage Bankers requires it to report.

         Section 3.15      BOOKS AND RECORDS.

                  The Company shall be responsible for maintaining, and shall
maintain, a complete set of books and records for the EMC Mortgage Loans which
shall be appropriately identified in the Company's computer system to clearly
reflect the ownership of the EMC Mortgage Loans by the Trust. In particular, the
Company shall maintain in its possession, available for inspection by the Master
Servicer and the Trustee and shall deliver to Master Servicer and the Trustee
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations. To the extent that original documents are not required
for purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Company may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including, but not limited to, optical imagery techniques so long as the Company
complies with the requirements of Accepted Servicing Practices.

                                      -72-
<PAGE>

                  The Company shall maintain with respect to each EMC Mortgage
Loan and shall make available for inspection by the Master Servicer and the
Trustee the related servicing file during the time such EMC Mortgage Loan is
subject to this Agreement and thereafter in accordance with applicable law.

                                      -73-
<PAGE>

                                   ARTICLE IV

         ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
                                    SERVICER

         Section 4.01 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligation of the Company and the related Servicer to
service and administer their respective Mortgage Loans in accordance with the
terms of this Agreement and the related Servicing Agreement and shall have full
power and authority to do any and all things which it may deem necessary or
desirable in connection with such master servicing and administration. In
performing its obligations hereunder, the Master Servicer shall act in a manner
consistent with Accepted Master Servicing Practices. Furthermore, the Master
Servicer shall oversee and consult with the Company and the related Servicer as
necessary from time-to-time to carry out the Master Servicer's obligations
hereunder, shall receive, review and evaluate all reports, information and other
data provided to the Master Servicer by the Company and the related Servicer and
shall cause the Company and related Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by such Person
under this Agreement and the related Servicing Agreement. The Master Servicer
shall independently and separately monitor the Company and the related
Servicer's servicing activities with respect to each related Mortgage Loan,
reconcile the results of such monitoring with such information provided in the
previous sentence on a monthly basis and coordinate corrective adjustments to
the Company's, the related Servicer's and Master Servicer's records, and based
on such reconciled and corrected information, prepare the statements specified
in Section 6.05 and any other information and statements required hereunder. The
Master Servicer shall reconcile the results of its Mortgage Loan monitoring with
the actual remittances of the Company and each Servicer pursuant to this
Agreement and the related Servicing Agreement.

         The Trustee shall furnish the Company, the Servicers and the Master
Servicer with any powers of attorney and other documents in form as provided to
it necessary or appropriate to enable the Company, the Servicer and the Master
Servicer to service and administer the related Mortgage Loans and REO Property.

         The Trustee and the Securities Administrator shall provide access to
the records and documentation in possession of the Trustee or the Securities
Administrator regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Certificateholders, the FDIC, and the supervisory
agents and examiners of the FDIC, such access being afforded only upon
reasonable prior written request and during normal business hours at the office
of the Trustee or the Securities Administrator; provided, however, that, unless
otherwise required by law, neither the Trustee nor the Securities Administrator
shall be required to provide access to such records and documentation if the
provision thereof would violate the legal right to privacy of any Mortgagor. The
Trustee and the Securities Administrator shall allow representatives of the
above entities to photocopy any of the

                                      -74-
<PAGE>

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

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

         Section 4.02 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Seller, the Company, the Servicers or the Master Servicer to assure such
continuing treatment. In particular, the Trustee shall not (a) sell or permit
the sale of all or any portion of the Mortgage Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion addressed to the Trustee prepared at the expense of the Trust Fund; and
(b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a REMIC
Opinion.

         Section 4.03 MONITORING OF COMPANY AND SERVICER. (a) The Master
Servicer shall be responsible for reporting to the Trustee and the Seller the
compliance by the Company and the related Servicer with its duties under this
Agreement and the related Servicing Agreement. In the review of the Company's
and the related Servicer's activities, the Master Servicer may rely upon an
Officer's Certificate of the Company and the related Servicer with regard to
such Person's compliance with the terms of this Agreement or the related
Servicing Agreement. In the event that the Master Servicer, in its judgment,
determines that the Company or the related Servicer should be terminated in
accordance with this Agreement or the related Servicing Agreement, or that a
notice should be sent pursuant to this Agreement or the related Servicing
Agreement with respect to the occurrence of an event that, unless cured, would
constitute grounds for such termination, the Master Servicer shall notify the
Seller and the Trustee thereof and the Master Servicer shall issue such notice
or take such other action as it deems appropriate.

                  (b) The Master Servicer, for the benefit of the Trustee and
the Certificateholders, shall enforce the obligations of the Company under this
Agreement and the related Servicer under the related Servicing Agreement, and
shall, in the event that the Company or the related Servicer fails to perform
its obligations in accordance with this Agreement or the related Servicing
Agreement, subject to the preceding paragraph, terminate the rights and
obligations of such Person thereunder and act as servicer of the related
Mortgage Loans or to cause the Trustee to enter in to a new Servicing Agreement
with a successor Servicer selected by the Master Servicer; provided, however, it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days)

                                      -75-
<PAGE>

before the actual servicing functions can be fully transferred to such successor
Servicer. Such enforcement, including, without limitation, the legal prosecution
of claims, termination of the related Servicing Agreement and the pursuit of
other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense,
subject to its right of reimbursement pursuant to the provisions of this
Agreement or the related Servicing Agreement, provided that the Master Servicer
shall not be required to prosecute or defend any legal action except to the
extent that the Master Servicer shall have received reasonable indemnity for its
costs and expenses in pursuing such action.

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

         (d) The Master Servicer shall require the Company and the related
Servicer to comply with the remittance requirements and other obligations set
forth in this Agreement or the related Servicing Agreement, as applicable.

         (e) If the Master Servicer acts as a servicer, it will not assume
liability for the representations and warranties of the Company or the related
Servicer, if any, that it replaces.

         Section 4.04 FIDELITY BOND. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.

         Section 4.05 POWER TO ACT; PROCEDURES. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article XI hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the

                                      -76-
<PAGE>

Trustee, customary consents or waivers and other instruments and documents, (ii)
to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds
and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 4.03, shall
not permit the Company or the related Servicer to) knowingly or intentionally
take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC or result in the imposition of a tax upon the Trust Fund (including but
not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) unless the Master Servicer has received an Opinion
of Counsel (but not at the expense of the Master Servicer) to the effect that
the contemplated action will not would cause REMIC I, REMIC II or REMIC III to
fail to qualify as a REMIC or result in the imposition of a tax upon REMIC I,
REMIC II or REMIC III, as the case may be. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer, the Company or the related Servicer to
execute and deliver instruments of satisfaction or cancellation, or of partial
or full release or discharge, and to foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court action
relating to the Mortgage Loans or the Mortgaged Property, in accordance with the
related Servicing Agreement and this Agreement, and the Trustee shall execute
and deliver such other documents, as the Master Servicer may request, to enable
the Master Servicer to master service and administer the Mortgage Loans and
carry out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer, the Company or the related
Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 10.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.

         Section 4.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in this Agreement or the related Servicing Agreement, to the extent
Mortgage Loans contain enforceable due-on-sale clauses, the Master Servicer
shall cause the Company and the related Servicer to enforce such clauses in
accordance with this Agreement or the related Servicing Agreement. If applicable
law prohibits the enforcement of a due-on-sale clause or such clause is
otherwise not enforced in accordance with this Agreement or the related
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with this
Agreement or the related Servicing Agreement.

                                      -77-
<PAGE>

         Section 4.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by the Company or the
related Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes for payment to Certificateholders on the next
Distribution Date, the Company or the related Servicer will, if required under
the related Servicing Agreement (or if the Company or the related Servicer does
not, the Master Servicer may), promptly furnish to the Custodian, on behalf of
the Trustee, two copies of a certification substantially in the form of Exhibit
H hereto signed by a Servicing Officer or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the Company or the Servicer
pursuant to Article V or by the related Servicer pursuant to the related
Servicing Agreement have been or will be so deposited) and shall request that
the Custodian, on behalf of the Trustee, deliver to the Company or the related
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall promptly release the
related Mortgage File to the Company or the related Servicer and the Trustee and
Custodian shall have no further responsibility with regard to such Mortgage
File. Upon any such payment in full, the Company or the related Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse, representation or warranty) regarding
the Mortgaged Property subject to the Mortgage, which instrument of satisfaction
or assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
Protected Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with this Agreement or the
related Servicing Agreement, the Trustee shall execute such documents as shall
be prepared and furnished to the Trustee by the Company, the related Servicer or
the Master Servicer (in form reasonably acceptable to the Trustee) and as are
necessary to the prosecution of any such proceedings. The Custodian, on behalf
of the Trustee, shall, upon the request of the Company, the related Servicer or
the Master Servicer, and delivery to the Custodian, on behalf of the Trustee, of
two copies of a request for release signed by a Servicing Officer substantially
in the form of Exhibit H (or in a mutually agreeable electronic format which
will, in lieu of a signature on its face, originate from a Servicing Officer),
release the related Mortgage File held in its possession or control to the
Company, the related Servicer or the Master Servicer, as applicable. Such trust
receipt shall obligate the Company, the related Servicer or the Master Servicer
to return the Mortgage File to the Custodian on behalf of the Trustee, when the
need therefor by such Person no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the Mortgage File shall be released by
the Custodian, on behalf of the Trustee, to the Company, the related Servicer or
the Master Servicer.

         Section 4.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
                      SERVICER, COMPANY AND SERVICER TO BE HELD FOR TRUSTEE.

                                      -78-
<PAGE>

         (a) The Master Servicer shall transmit and the Company or the related
Servicer (to the extent required by this Agreement or the related Servicing
Agreement) shall transmit to the Trustee or Custodian such documents and
instruments coming into the possession of such Person from time to time as are
required by the terms hereof, or in the case of the related Servicer, the
related Servicing Agreement, to be delivered to the Trustee or Custodian. Any
funds received by the Master Servicer, the Company or by the related Servicer in
respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer, the Company or by the related Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account, the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of the Company and the related Servicer to retain its Servicing Fee and
other amounts as provided in this Agreement or the related Servicing Agreement.
The Master Servicer shall, and (to the extent provided in this Agreement or the
related Servicing Agreement) shall cause the Company and the related Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.

         (b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer,
the Company and the related Servicer shall be entitled to setoff against, and
deduct from, any such funds any amounts that are properly due and payable to the
Master Servicer or such Servicer under this Agreement or the related Servicing
Agreement.

         Section 4.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

         (a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Company and the related Servicer under this Agreement or the
related Servicing Agreement to maintain or cause to be maintained standard fire
and casualty insurance and, where applicable, flood insurance, all in accordance
with the provisions of this Agreement or the related Servicing Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in this Agreement and the related Servicing
Agreement and that no earthquake or other additional insurance is to be required
of any Mortgagor or to be maintained on property acquired in respect of a

                                      -79-
<PAGE>

defaulted loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.

         (b) Pursuant to Sections 5.01, 5.03 and 5.04 any amounts collected by
the Company, the Servicers or the Master Servicer, or by the Company or the
Servicers, under any insurance policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with this Agreement or the Servicing
Agreements) shall be deposited by the Company in its Protected Account or by the
related Servicer or the Master Servicer into the Master Servicer Collection
Account, subject to withdrawal pursuant to Sections 5.02, 5.03, 5.04 and 5.06,
as applicable. Any cost incurred by the Master Servicer, the Company or the
related Servicer in maintaining any such insurance if the Mortgagor defaults in
its obligation to do so shall be added to the amount owing under the Mortgage
Loan where the terms of the Mortgage Loan so permit; provided, however, that the
addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders and shall be
recoverable by the Master Servicer, the Company or the related Servicer pursuant
to Sections 5.02, 5.03, 5.04 and 5.06, as applicable.

         Section 4.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in this Agreement and the related
Servicing Agreement) cause the Company or the Servicer to, prepare and present
on behalf of the Trustee and the Certificateholders all claims under the
Insurance Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to the Company or the related Servicer and remitted to
the Master Servicer) in respect of such policies, bonds or contracts shall be
promptly deposited in the Master Servicer Collection Account upon receipt,
except that any amounts realized that are to be applied to the repair or
restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).

         Section 4.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

         (a) The Master Servicer shall not take, or permit the Company or the
related Servicer (to the extent such action is prohibited under this Agreement
or the related Servicing Agreement) to take, any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of the Master Servicer, the Company or the related
Servicer, would have been covered thereunder. The Master Servicer shall use its
best reasonable efforts to cause the Company and the related Servicer (to the
extent required under this Agreement and the related Servicing Agreement) to
keep in force and effect (to the extent that the Mortgage Loan requires the
Mortgagor to maintain such insurance), primary mortgage insurance applicable to
each Mortgage Loan (including any LPMI Policy) in accordance with the provisions
of this Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit the Company or the related Servicer (to
the extent required under this Agreement or the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of

                                      -80-
<PAGE>

the initial issuance of the Mortgage Note and is required to be kept in force
hereunder except in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable.

         (b) The Master Servicer agrees to cause the Company and the related
Servicer (to the extent required under this Agreement and the related Servicing
Agreement) to present, on behalf of the Trustee and the Certificateholders,
claims to the insurer under any Primary Mortgage Insurance Policies and, in this
regard, to take such reasonable action as shall be necessary to permit recovery
under any Primary Mortgage Insurance Policies respecting defaulted Mortgage
Loans. Pursuant to Sections 5.01, 5.03 and 5.04, any amounts collected by the
Company or the related Servicer under any Primary Mortgage Insurance Policies
shall be deposited by the Company in its Protected Account or by the related
Servicer in the Master Servicer Collection Account, subject to withdrawal
pursuant to Section 5.03 or 5.04, as applicable.

         Section 4.12 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES
                      AND DOCUMENTS.

         The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of any
Primary Mortgage Insurance Policies, or certificate of insurance if applicable,
and any certificates of renewal as to the foregoing as may be issued from time
to time as contemplated by this Agreement. Until all amounts distributable in
respect of the Certificates have been distributed in full and the Master
Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee (or its Custodian, if any, as directed by the Trustee) shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee (or the Custodian, as directed
by the Trustee), upon the execution or receipt thereof the originals of any
Primary Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.

         Section 4.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS. The Master
Servicer shall cause the Company and the related Servicer (to the extent
required under this Agreement and the related Servicing Agreement) to foreclose
upon, repossess or otherwise comparably convert the ownership of Mortgaged
Properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments, all in accordance with this Agreement or the related
Servicing Agreement.

         Section 4.14 COMPENSATION FOR THE MASTER SERVICER.

         The Master Servicer shall be entitled to the Master Servicing Fee on
each Distribution Date as compensation for the performance of its obligations
hereunder. In addition, the Master Servicer shall be entitled to (i) all income
and gain realized from any investment of funds on Permitted Investments in the
Master Servicer Collection Account and Distribution Account as compensation for
the performance of its obligations hereunder and (ii) any interest remitted by
the related Servicer in connection with a Principal Prepayment in full or
otherwise in excess of amounts required to be remitted to the Master

                                      -81-
<PAGE>

Servicer Collection Account ("Additional Master Servicers Compensation"). The
Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.

         Section 4.15      REO PROPERTY.

         (a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in this
Agreement or the related Servicing Agreement, cause the Company or the related
Servicer to sell, any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall cause the Company or the related Servicer to protect and
conserve, such REO Property in the manner and to the extent required by this
Agreement or the related Servicing Agreement, in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

         (b) The Master Servicer shall, to the extent required by this Agreement
or the related Servicing Agreement, cause the Company or the related Servicer to
deposit all funds collected and received in connection with the operation of any
REO Property in the Protected Account.

         (c) The Master Servicer and the Company or the related Servicer, upon
the final disposition of any REO Property, shall be entitled to reimbursement
for any related unreimbursed Advances and other unreimbursed advances as well as
any unpaid Master Servicing Fees and Servicing Fees from Liquidation Proceeds
received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Monthly Advances as well as any unpaid
Master Servicing Fees and Servicing Fees may be reimbursed or paid, as the case
may be, prior to final disposition, out of any net rental income or other net
amounts derived from such REO Property.

         (d) To the extent provided in this Agreement or the related Servicing
Agreement, the Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the Company or the
related Servicer as provided above shall be deposited in the Protected Account
on or prior to the Determination Date in the month following receipt thereof and
be remitted by wire transfer in immediately available funds to the Master
Servicer for deposit into the related Master Servicer Collection Account on the
next succeeding Remittance Date.

         Section 4.16      ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

         (a) The Master Servicer shall deliver to the Securities Administrator,
the Trustee and the Rating Agencies on or before March 1 of each year,
commencing on March 1, 2005, an Officer's Certificate, certifying that with
respect to the period ending December 31 of the prior year: (i) such Servicing
Officer has reviewed the activities of such Master Servicer during the preceding
calendar year

                                      -82-
<PAGE>

or portion thereof and its performance under this Agreement, (ii) to the best of
such Servicing Officer's knowledge, based on such review, such Master Servicer
has performed and fulfilled its duties, responsibilities and obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that the Company or
any Servicer has failed to perform any of its duties, responsibilities and
obligations under this Agreement or the related Servicing Agreement in all
material respects throughout such year, or, if there has been a material default
in the performance or fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof.

         (b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).

         Section 4.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Securities Administrator, the Trustee, the Rating
Agencies and the Seller on or before March 1 of each year, commencing on March
1, 2005 to the effect that, with respect to the most recently ended fiscal year,
such firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to this
Agreement and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
Freddie Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by Freddie Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies (unless (i) the Master Servicer shall have failed to provide the Trustee
with such statement or (ii) the Trustee shall be unaware of the Master
Servicer's failure to provide such statement). If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.

         Section 4.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
Within 15 days after each Distribution Date, the Securities Administrator shall,
in accordance with industry standards, file

                                      -83-
<PAGE>

with the Commission via the Electronic Data Gathering and Retrieval System
("EDGAR"), a Form 8-K (or other comparable Form containing the same or
comparable information or other information mutually agreed upon) with a copy of
the statement to the Trustee who shall make available a copy of the monthly
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30 in each year, the Securities Administrator shall,
in accordance with industry standards and only if instructed by the Depositor,
file a Form 15 Suspension Notice with respect to the Trust Fund, if applicable.
Prior to (i) March 15, 2005 and (ii) unless and until a Form 15 Suspension
Notice shall have been filed, prior to March 15 of each year thereafter, the
Master Servicer shall provide the Securities Administrator with a Master
Servicer Certification, together with a copy of the annual independent
accountant's servicing report and annual statement of compliance of the Company
to be delivered pursuant to this Agreement and each Servicer, in each case,
required to be delivered pursuant to the related Servicing Agreement, and, if
applicable, the annual independent accountant's servicing report and annual
statement of compliance to be delivered by the Master Servicer pursuant to
Sections 4.16 and 4.17. Prior to (i) March 31, 2005 and (ii) unless and until a
Form 15 Suspension Notice shall have been filed, March 31 of each year
thereafter, the Securities Administrator shall file a Form 10-K, in substance
conforming to industry standards, with respect to the Trust. Such Form 10-K
shall include the Master Servicer Certification and other documentation provided
by the Master Servicer pursuant to the second preceding sentence. The Depositor
hereby grants to the Securities Administrator a limited power of attorney to
execute and file each such document on behalf of the Depositor. Such power of
attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement, the Mortgage Loans as the Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items other than those specified in this Section
4.18; provided, however, the Securities Administrator will cooperate with the
Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Copies of all reports filed by the Securities
Administrator under the Exchange Act shall be sent to: the Depositor c/o Bear,
Stearns & Co. Inc., Attn: Managing Director-Analysis and Control, One Metrotech
Center North, Brooklyn, New York 11202-3859. Fees and expenses incurred by the
Securities Administrator in connection with this Section 4.18 shall not be
reimbursable from the Trust Fund.

         Section 4.19 EMC. On the Closing Date, EMC will receive from the Seller
a payment of $5,000.

         Section 4.20 UCC. The Trustee agrees to file continuation statements
for any Uniform Commercial Code financing statements which the Seller has
informed the Trustee were filed on the Closing Date in connection with the
Trust. The Seller shall file any financing statements or amendments thereto
required by any change in the Uniform Commercial Code.

         Section 4.21 OPTIONAL PURCHASE OF CERTAIN MORTGAGE LOANS.

                                      -84-
<PAGE>

         With respect to any Mortgage Loans which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right to purchase any Mortgage Loan from the Trust
which becomes 90 days or more delinquent or becomes an REO Property at a price
equal to the Repurchase Price; provided however (i) that such Mortgage Loan is
still 90 days or more delinquent or is an REO Property as of the date of such
purchase and (ii) this purchase option, if not theretofore exercised, shall
terminate on the date prior to the last day of the related Calendar Quarter.
This purchase option, if not exercised, shall not be thereafter reinstated
unless the delinquency is cured and the Mortgage Loan thereafter again becomes
90 days or more delinquent or becomes an REO Property, in which case the option
shall again become exercisable as of the first day of the related Calendar
Quarter.

         In addition, EMC shall, at its option, purchase any Mortgage Loan from
the Trust if the first Due Date for such Mortgage Loan is subsequent to the
Cut-off Date and the initial Monthly Payment is not made within thirty (30) days
of such Due Date. Such purchase shall be made at a price equal to the Repurchase
Price.

         If at any time EMC remits to the Master Servicer a payment for deposit
in the Master Servicer Collection Account covering the amount of the Repurchase
Price for such a Mortgage Loan, and EMC provides to the Trustee a certification
signed by a Servicing Officer stating that the amount of such payment has been
deposited in the Master Servicer Collection Account, then the Trustee shall
execute the assignment of such Mortgage Loan prepared and delivered to the
Trustee, at the request of EMC, without recourse, representation or warranty, to
EMC which shall succeed to all the Trustee's right, title and interest in and to
such Mortgage Loan, and all security and documents relative thereto. Such
assignment shall be an assignment outright and not for security. EMC will
thereupon own such Mortgage, and all such security and documents, free of any
further obligation to the Trustee or the Certificateholders with respect
thereto.

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<PAGE>

                                    ARTICLE V

                                    ACCOUNTS

         Section 5.01 COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED ACCOUNT.

                  (a) The Company 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 related to the EMC
Mortgage Loans are located to collect all payments called for under the terms
and provisions of the EMC 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 Company may in its
discretion (i) waive any late payment charge and (ii) extend the due dates for
payments due on a Mortgage Note related to an EMC Mortgage Loan for a period not
greater than 125 days. In the event of any such arrangement, the Company shall
make Advances on the related EMC Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such EMC Mortgage Loan without
modification thereof by reason of such arrangements, and shall be entitled to
reimbursement therefor in accordance with Section 6.01. The Company shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law. In addition, if (x) an EMC Mortgage Loan is in default or
default is imminent or (y) the Company delivers to the Trustee a certification
addressed to the Trustee, based on the advice of counsel or certified public
accountants, in either case, that have a national reputation with respect to
taxation of REMICs, that a modification of such EMC Mortgage Loan will not
result in the imposition of taxes on or disqualify any of REMIC I, REMIC II or
REMIC III, the Company may, (A) amend the related Mortgage Note to reduce the
Mortgage Rate applicable thereto, provided that such reduced Mortgage Rate shall
in no event be lower than 5.00% with respect to any EMC Mortgage Loan and (B)
amend any Mortgage Note related to an EMC Mortgage Loan to extend to the
maturity thereof.

                  In accordance with the standards of the first paragraph of
Section 3.01, the Company shall not waive (or permit a sub-servicer to waive)
any Prepayment Charge related to an EMC Mortgage Loan unless: (i) the
enforceability thereof shall have been limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors" rights
generally, (ii) the enforcement thereof is illegal, or any local, state or
federal agency has threatened legal action if the prepayment penalty is
enforced, (iii) the collectability thereof shall have been limited due to
acceleration in connection with a foreclosure or other involuntary payment or
(iv) such waiver is standard and customary in servicing similar Mortgage Loans
and relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Company, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related EMC Mortgage
Loan. In no event will the Company waive a Prepayment Charge in connection with
a refinancing of an EMC Mortgage Loan that is not related to a default or a
reasonably foreseeable default. If a Prepayment Charge is waived, but does not
meet the standards described above, then the Company is required to

                                      -86-
<PAGE>

pay the amount of such waived Prepayment Charge, for the benefit of the Class P
Certificates, by remitting such amount to the Master Servicer by the Remittance
Date.

                  (b) The Company shall establish and maintain a Protected
Account (which shall at all times be an Eligible Account) with a depository
institution in the name of the Company for the benefit of the Trustee on behalf
of the Certificateholders and designated "U.S. Bank National Association, in
trust for registered holders of Bear Stearns Asset Backed Securities I LLC,
Asset-Backed Certificates Series 2004-AC4". The Company shall deposit or cause
to be deposited into the Protected Account on a daily basis within one Business
Day of receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by subservicers or received by it in respect
of the EMC Mortgage Loans subsequent to the Cut-off Date (other than in respect
of principal and interest due on the EMC Mortgage Loans on or before the Cut-off
Date) and the following amounts required to be deposited hereunder:

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

                  (ii) all payments on account of interest on the EMC Mortgage
         Loans net of the related Servicing Fee permitted under Section 3.10 and
         LPMI Fees, if any;

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

                  (iv) any amount required to be deposited by the Company
         pursuant to Section 5.01(c) in connection with any losses on Permitted
         Investments;

                  (v) any amounts required to be deposited by the Company
         pursuant to Section 3.05;

                  (v) any Prepayment Charges collected on the EMC Mortgage
         Loans; and

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

                  The foregoing requirements for remittance by the Company into
the Protected Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be remitted by the
Company. In the event that the Company shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 5.02, it
may at any time withdraw or direct the institution maintaining the Protected
Account, to withdraw such amount from the Protected Account, any provision
herein to the contrary notwithstanding. Such withdrawal or direction may be
accomplished by delivering written notice thereof to the institution maintaining
the Protected Account,

                                      -87-
<PAGE>

that describes the amounts deposited in error in the Protected Account. The
Company shall maintain adequate records with respect to all withdrawals made
pursuant to this Section. All funds deposited in the Protected Account shall be
held in trust for the Certificateholders until withdrawn in accordance with
Section 5.02.

                  (c) The institution that maintains the Protected Account shall
invest the funds in the Protected Account, in the manner directed by the
Company, in Permitted Investments which shall mature not later than the
Remittance Date and shall not be sold or disposed of prior to its maturity. All
such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders. All income and gain net of any losses
realized from any such investment shall be for the benefit of the Company as
servicing compensation and shall be remitted to it monthly as provided herein.
The amount of any losses incurred in the Protected Account in respect of any
such investments shall be deposited by the Company into the Protected Account,
out of the Company's own funds.

                  (d) The Company shall give at least 30 days advance notice to
the Trustee, the Seller, the Master Servicer, each Rating Agency and the
Depositor of any proposed change of location of the Protected Account prior to
any change thereof.

         Section 5.02 PERMITTED WITHDRAWALS FROM THE PROTECTED ACCOUNT.

                  (a) The Company may from time to time make withdrawals from
the Protected Account for the following purposes:

                  (i) to pay itself (to the extent not previously paid to or
         withheld by the Company), as servicing compensation in accordance with
         Section 3.10, that portion of any payment of interest that equals the
         Servicing Fee for the period with respect to which such interest
         payment was made, and, as additional servicing compensation, those
         other amounts set forth in Section 3.10;

                  (ii) to reimburse the Company for Advances made by it with
         respect to the Mortgage Loans, provided, however, that the Company's
         right of reimbursement pursuant to this subclause (ii) shall be limited
         to amounts received on particular EMC Mortgage Loan(s) (including, for
         this purpose, Liquidation Proceeds and Insurance Proceeds) that
         represent late recoveries of payments of principal and/or interest on
         such particular EMC Mortgage Loan(s) in respect of which any such
         Advance was made;

                  (iii) to reimburse the Company for any previously made portion
         of a Servicing Advance or an Advance made by the Company that, in the
         good faith judgment of the Company, will not be ultimately recoverable
         by it from the related Mortgagor, any related Liquidation Proceeds,
         Insurance Proceeds or otherwise (a "Nonrecoverable Advance"), to the
         extent not reimbursed pursuant to clause (ii) or clause (v);

                                      -88-
<PAGE>

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

                  (v) to pay the Company any unpaid Servicing Fees and to
         reimburse it for any unreimbursed Servicing Advances, provided,
         however, that the Company's right to reimbursement for Servicing
         Advances pursuant to this subclause (v) with respect to any EMC
         Mortgage Loan shall be limited to amounts received on particular EMC
         Mortgage Loan(s) (including, for this purpose, Liquidation Proceeds,
         Insurance Proceeds and purchase and repurchase proceeds) that represent
         late recoveries of the payments for which such Servicing Advances were
         made;

                  (vi) to pay to the Seller, the Depositor or itself, as
         applicable, with respect to each EMC Mortgage Loan or property acquired
         in respect thereof that has been purchased pursuant to Section 2.02,
         2.03 or 4.21 of this Agreement, all amounts received thereon and not
         taken into account in determining the related Stated Principal Balance
         of such repurchased EMC Mortgage Loan;

                  (vii) to pay any expenses recoverable by the Company pursuant
         to Section 8.04 of this Agreement;

                  (viii) to withdraw pursuant to Section 5.01 any amount
         deposited in the Protected Account and not required to be deposited
         therein; and

                  (ix) to clear and terminate the Protected Account upon
         termination of this Agreement pursuant to Section 11.01 hereof.

                  In addition, no later than 1:00 p.m. Eastern time on the
Remittance Date, the Company shall withdraw from the Protected Account and remit
to the Master Servicer the amount required to be withdrawn therefrom pursuant to
Section 5.04 hereof. With respect to any remittance received by the Master
Servicer from EMC after the date on which such remittance was due, EMC shall pay
to the Master Servicer interest on any such late remittance at an annual rate
equal to the prime rate announced to be in effect from time to time as published
as the average rate in The Wall Street Journal (Northeast Edition), plus two
percentage points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in EMC's Protected Account by
EMC on the date such late payment is made and shall cover the period commencing
with the day following the date on which such remittance was due and ending with
the Business Day on which such remittance is made, both inclusive. Such interest
shall be remitted along with the distribution payable on the next succeeding
Remittance Date. The payment by EMC of any such interest shall not be deemed an
extension of time for payment or a waiver of any Event of Default with respect
to EMC.

                  The Company shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Protected Account pursuant to subclauses (i), (ii), (iv),
(v) and (vi) above. Prior to making any withdrawal from the

                                      -89-
<PAGE>

Protected Account pursuant to subclause (iii), the Company shall deliver to the
Trustee an Officer's Certificate of a Servicing Officer indicating the amount of
any previous Advance or Servicing Advance determined by the Company to be a
Nonrecoverable Advance and identifying the related EMC Mortgage Loan(s), and
their respective portions of such Nonrecoverable Advance.

         Section 5.02A     REPORTS TO MASTER SERVICER.

         On or before the tenth calendar day of each month, the Company shall
furnish to the Master Servicer electronically in a format acceptable to the
Master Servicer loan accounting reports in the investor's assigned loan number
order to document the payment activity on each EMC Mortgage Loan on an
individual mortgage loan basis. With respect to each month, such loan accounting
reports shall contain the following:

                  (i) With respect to each Scheduled Payment (on both an actual
         and scheduled basis with respect to mortgage loan balances and on an
         actual basis with respect to paid-through dates), the amount of such
         remittance allocable to principal (including a separate breakdown of
         any Principal Prepayment, including the amount of any Prepayment
         Interest Shortfall);

                  (ii) with respect to each Monthly Payment, the amount of such
         remittance allocable to scheduled interest;

                  (iii) the amount of servicing compensation received by the
         Company during the prior calendar month;

                  (iv) the aggregate scheduled principal balance of the EMC
         Mortgage Loans;

                  (v) the aggregate amount of Advances made by the Company
         pursuant to Section 6.01;

                  (vi) the aggregate of any expenses reimbursed to the Company
         during the prior calender month pursuant to Section 5.02;

                  (vii) the number and aggregate outstanding principal balances
         of EMC Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89
         days, (3) 90 days or more; (b) as to which foreclosure has commenced;
         and (c) as to which REO Property has been acquired; and

                  (viii) the amount of any Prepayment Charges collected by the
         Company and the amount of Prepayment Charges paid by the Company in
         connection with a waiver that is not permitted under this Agreement.

         Section 5.03 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW
                      ACCOUNTS.

                                      -90-
<PAGE>

         With respect to each EMC Mortgage Loan, to the extent required by the
related Mortgage Note, the Company 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 Company) for the payment of
taxes, assessments, hazard insurance premiums or comparable items for the
account of the Mortgagors. Nothing herein shall require the Company 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 Company out of related collections for any payments made with respect to
each EMC Mortgage Loan pursuant to Section 3.01 (with respect to taxes and
assessments and insurance premiums) and Section 3.05 (with respect to hazard
insurance), to refund to any Mortgagors for any EMC Mortgage Loans any sums as
may be determined to be overages, to pay interest, if required by law or the
terms of the related Mortgage or Mortgage Note, to such Mortgagors on balances
in the Escrow Account or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 11.01 thereof. The
Escrow Account shall not be a part of the Trust Fund.

         Section 5.04 SERVICER PROTECTED ACCOUNTS. (a) The Master Servicer shall
enforce the obligation of the Company and the Servicers to establish and
maintain a Protected Account in accordance with this Agreement and the Servicing
Agreements, with records to be kept with respect thereto on a Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited within one Business
Day (or as of such other time specified in the Servicing Agreements) of receipt
all collections of principal and interest on any Mortgage Loan and with respect
to any REO Property received by the Company or the related Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances
made from the Company's or such Servicer's own funds (less servicing
compensation as permitted by this Agreement or the related Servicing Agreement)
and all other amounts to be deposited in the Protected Accounts. Each of the
Company and the Servicers are hereby authorized to make withdrawals from and
deposits to the related Protected Account for purposes required or permitted by
this Agreement. To the extent provided in this Agreement or any Servicing
Agreement, the Protected Account shall be held in a Designated Depository
Institution and segregated on the books of such institution in the name of the
Trustee for the benefit of Certificateholders.

         (b) To the extent provided in this Agreement or any Servicing
Agreement, amounts on deposit in a Protected Account may be invested in
Permitted Investments in the name of the Trustee for the benefit of
Certificateholders and, except as provided in the preceding paragraph, not
commingled with any other funds, such Permitted Investments to mature, or to be
subject to redemption or withdrawal, no later than the date on which such funds
are required to be withdrawn for deposit in the Master Servicer Collection
Account, and shall be held until required for such deposit. The income earned
from Permitted Investments made pursuant to this Section 5.04 shall be paid to
the Company or the related Servicer under this Agreement or the related
Servicing Agreement, and the risk of loss of moneys required to be distributed
to the Certificateholders resulting from such investments shall be

                                      -91-
<PAGE>

borne by and be the risk of the Company or the related Servicer, as the case may
be. The Company or the related Servicer (to the extent provided in this
Agreement or the related Servicing Agreement) shall deposit the amount of any
such loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.

         (c) To the extent provided in this Agreement or the related Servicing
Agreement and subject to this Article V, on or before each Remittance Date, the
Company or the related Servicer shall withdraw or shall cause to be withdrawn
from its Protected Account and shall immediately deposit or cause to be
deposited in the Master Servicer Collection Account amounts representing the
following collections and payments (other than with respect to principal of or
interest on the Mortgage Loans due on or before the Cut-off Date):

                  (i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Company or the related Servicer pursuant
to the related Servicing Agreement which were due on or before the related Due
Date, net of the amount thereof comprising the Servicing Fees;

                  (ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Company or the related Servicer with respect to such Mortgage
Loans in the related Prepayment Period, with interest to the date of prepayment
or liquidation, net of the amount thereof comprising the Servicing Fees and LPMI
Fees, if any;

                  (iii) Partial Principal Prepayments received by the Company or
the related Servicer for such Mortgage Loans in the related Prepayment Period;

                  (iv) Any amount to be used as an Advance; and

                  (v) The amount of any Prepayment Charges collected with
respect to the Mortgage Loans and the amount of any Prepayment Charges paid by
the Company or the related Servicer in connection with the waiver of a
Prepayment Charge in a manner that is not permitted under this Agreement or the
related Servicing Agreement.

         (d) Withdrawals may be made from a Protected Account by the Company as
described in Section 5.02 hereof and by the Master Servicer or the related
Servicer only to make remittances as provided in Section 5.04(c), 5.05 and 5.06;
to reimburse the Master Servicer or the Servicer for Advances which have been
recovered by subsequent collection from the related Mortgagor; to remove amounts
deposited in error; to remove fees, charges or other such amounts deposited on a
temporary basis; or to clear and terminate the account at the termination of
this Agreement in accordance with Section 11.01. As provided in Sections 5.04(c)
and 5.05(b) certain amounts otherwise due to the related Servicer may be
retained by the related Servicer and need not be deposited in the Master
Servicer Collection Account.

                                      -92-
<PAGE>

         Section 5.05 MASTER SERVICER COLLECTION ACCOUNT. (a) The Master
Servicer shall establish and maintain in the name of the Trustee, for the
benefit of the Certificateholders, the Master Servicer Collection Account which
shall be an Eligible Account. The Master Servicer will deposit in the Master
Servicer Collection Account as identified by the Master Servicer and as received
by the Master Servicer, the following amounts:

                  (i) Any amounts withdrawn from a Protected Account;

                  (ii) Any Advance and any Compensating Interest Payments;

                  (iii) Any Insurance Proceeds, Liquidation Proceeds or
Subsequent Recoveries received by or on behalf of the Master Servicer or which
were not deposited in a Protected Account;

                  (iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Seller or Section 2.02 or 2.03, any amounts which are to be
treated pursuant to Section 2.04 of this Agreement as the payment of such a
Repurchase Price, the Repurchase Price with respect to any Mortgage Loans
purchased by EMC pursuant to Section 4.21, and all proceeds of any Mortgage
Loans or property acquired with respect thereto repurchased by the Seller or its
designee pursuant to Section 11.01;

                  (v) Any amounts required to be deposited with respect to
losses on investments of deposits in an Account; and

                  (vi) Any other amounts received by or on behalf of the Master
Servicer or the Trustee and required to be deposited in the Master Servicer
Collection Account pursuant to this Agreement.

         (b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges or assumption, tax service, statement account or
payoff, substitution, satisfaction, release and other like fees and charges,
need not be credited by the Master Servicer or the related Servicer to the
Distribution Account or the Master Servicer Collection Account, as applicable.
In the event that the Master Servicer shall deposit or cause to be deposited to
the Distribution Account any amount not required to be credited thereto, the
Trustee, upon receipt of a written request therefor signed by a Servicing
Officer of the Master Servicer, shall promptly transfer such amount to the
Master Servicer, any provision herein to the contrary notwithstanding.

         (c) The amount at any time credited to the Master Servicer Collection
Account may be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments or be held in cash
as directed by Master Servicer. All Permitted Investments

                                      -93-
<PAGE>

shall mature or be subject to redemption or withdrawal on or before, and shall
be held until, the next succeeding Distribution Account Deposit Date. Any and
all investment earnings from the Master Servicer Collection Account shall be
paid to the Master Servicer. The risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the Master Servicer. The Master Servicer shall
deposit the amount of any such loss in the Master Servicer Collection Account
within two Business Days of receipt of notification of such loss but not later
than the second Business Day prior to the Distribution Date on which the moneys
so invested are required to be distributed to the Certificateholders.

         Section 5.06 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER
SERVICER COLLECTION ACCOUNT. (a) The Master Servicer will, from time to time on
demand of the Master Servicer or the Securities Administrator, make or cause to
be made such withdrawals or transfers from the Master Servicer Collection
Account as the Master Servicer has designated for such transfer or withdrawal
pursuant to this Agreement and the related Servicing Agreement. The Master
Servicer may clear and terminate the Master Servicer Collection Account pursuant
to Section 11.01 and remove amounts from time to time deposited in error.

         (b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account to pay itself as provided in Section 4.14 and
to pay any expenses, costs and liabilities recoverable by the Trustee, the
Master Servicer, the Custodian or the Securities Administrator pursuant to
Sections 4.03, 8.03, 8.04 and 10.05; provided however, that the Master Servicer
shall be obligated to pay from its own funds any amounts which it is required to
pay under Section 8.03(a).

         (c) In addition, on or before each Distribution Account Deposit Date,
the Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Advances required to be made by the Master
Servicer with respect to the Mortgage Loans.

         (d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all available funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.

         Section 5.07      DISTRIBUTION ACCOUNT.

                  (a) The Trustee shall establish and maintain in the name of
the Trustee, for the benefit of the Certificateholders, the Distribution Account
as a segregated trust account or accounts.

                  (b) All amounts deposited to the Distribution Account shall be
held by the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.

                  (c) The Distribution Account shall constitute an Eligible
Account of the Trust Fund segregated on the books of the Trustee and held by the
Trustee and the Distribution Account and the

                                      -94-
<PAGE>

funds deposited therein shall not be subject to, and shall be protected from,
all claims, liens, and encumbrances of any creditors or depositors of the
Trustee (whether made directly, or indirectly through a liquidator or receiver
of the Trustee). The amount at any time credited to the Distribution Account may
be, as directed by the Master Servicer, held either uninvested in a trust or
deposit account of the Trustee with no liability for interest or other
compensation thereof, except as otherwise agreed in writing with the Master
Servicer, or invested in the name of the Trustee, in such Permitted Investments
as may be selected by the Master Servicer on such direction which mature not
later than the Business Day next preceding the succeeding Distribution Date,
except if such Permitted Investment is an obligation of or is managed by the
institution that maintains such fund or account, then such Permitted Investment
shall mature not later than such Distribution Date. Permitted Investments in
respect of the Distribution Account shall not be sold or disposed of prior to
their maturity. All investment earnings on amounts on deposit in the
Distribution Account or benefit from funds uninvested therein from time to time
shall be for the account of the Master Servicer. The Master Servicer shall be
permitted to receive distribution of any and all investment earnings from the
Distribution Account on each Distribution Date. If there is any loss on a
Permitted Investment or demand deposit, the Master Servicer shall deposit the
amount of the loss in the Distribution Account. With respect to the Distribution
Account and the funds deposited therein, the Trustee shall take such action as
may be necessary to ensure that the Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to a claim against the
estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e), and applicable
regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.

         Section 5.08 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
                      ACCOUNT.

         (a) The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to this Agreement or any
Servicing Agreement or as the Securities Administrator has instructed hereunder
for the following purposes (limited in the case of amounts due the Master
Servicer to those not withdrawn from the Master Servicer Collection Account in
accordance with the terms of this Agreement; provided that the Trustee shall not
be responsible for such determination and may rely on the Master Servicer's or
the Securities Administrator's instructions under this Section 5.08):

                  (i) to reimburse the Master Servicer, the Company or the
related Servicer for any Advance or Servicing Advance of its own funds, the
right of the Master Servicer, the Company or the related Servicer to
reimbursement pursuant to this subclause (i) being limited to amounts received
on a particular Mortgage Loan (including, for this purpose, the Repurchase Price
therefor, Insurance Proceeds and Liquidation Proceeds) which represent late
payments or recoveries of the principal of or interest on such Mortgage Loan
respecting which such Advance or Servicing Advance was made;

                  (ii) to reimburse the Master Servicer, the Company or the
related Servicer from Insurance Proceeds or Liquidation Proceeds relating to a
particular Mortgage Loan for amounts expended by the Master Servicer, the
Company or the related Servicer in good faith in connection with

                                      -95-
<PAGE>

the restoration of the related Mortgaged Property which was damaged by an
uninsured cause or in connection with the liquidation of such Mortgage Loan;

                  (iii) to reimburse the Master Servicer, the Company or the
related Servicer from Insurance Proceeds relating to a particular Mortgage Loan
for insured expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer, the Company or the related Servicer from
Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses
incurred with respect to such Mortgage Loan; provided that the Master Servicer
shall not be entitled to reimbursement for Liquidation Expenses with respect to
a Mortgage Loan to the extent that (i) any amounts with respect to such Mortgage
Loan were paid as Excess Liquidation Proceeds pursuant to clause (x) of this
Subsection (a) to the Master Servicer; and (ii) such Liquidation Expenses were
not included in the computation of such Excess Liquidation Proceeds;

                  (iv) [reserved];

                  (v) [reserved];

                  (vi) to reimburse the Master Servicer, the Company or a
Servicer for advances of funds pursuant to this Agreement or the related
Servicing Agreement, and the right to reimbursement pursuant to this subclause
being limited to amounts received on the related Mortgage Loan (including, for
this purpose, the Repurchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of the payments for which such
advances were made;

                  (vii) to reimburse the Master Servicer, the Company or a
Servicer for any Advance or advance, after a Realized Loss has been allocated
with respect to the related Mortgage Loan if the Advance or advance has not been
reimbursed pursuant to clauses (i) and (vi);

                  (viii) to pay the Master Servicer as set forth in Section
4.14;

                  (ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 4.03,
8.04(c) and (d) and 12.02 or otherwise reimbursable to it pursuant to this
Agreement;

                  (x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
Company or the related Servicer;

                  (xi) to reimburse or pay the Company or the related Servicer
any such amounts as are due thereto under this Agreement or the related
Servicing Agreement and have not been retained by or paid to the Company or the
related Servicer, to the extent provided herein and in the related Servicing
Agreement;

                                      -96-
<PAGE>

                  (xii) to reimburse the Trustee, the Custodian or the
Securities Administrator for expenses, costs and liabilities incurred by or
reimbursable to it pursuant to this Agreement (to the extent not reimbursed from
the Master Servicer Collection Account in accordance with Section 5.06);

                  (xiii) to remove amounts deposited in error; and

                  (xiv) to clear and terminate the Distribution Account pursuant
to Section 11.01.

                  (b) The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
accounting for any reimbursement from the Distribution Account pursuant to
subclauses (i) through (vi), inclusive, and (viii) or with respect to any such
amounts which would have been covered by such subclauses had the amounts not
been retained by the Master Servicer without being deposited in the Distribution
Account under Section 5.06.

                  (c) On each Distribution Date, the Trustee shall distribute
the Available Funds to the extent of funds on deposit in the Distribution
Account to the holders of the Certificates in accordance with the Remittance
Report upon which the Trustee may conclusively rely.

                                      -97-
<PAGE>

                                   ARTICLE VI

                           DISTRIBUTIONS AND ADVANCES

         Section 6.01 ADVANCES.

         (a) The Company shall make an Advance with respect to any EMC Mortgage
Loan and deposit such Advance in the Master Servicer Collection Account no later
than 1:00 p.m. Eastern time on the Remittance Date in immediately available
funds. The Master Servicer shall cause the related Servicer to remit any such
Advance required pursuant to the terms of the related Servicing Agreement. The
Company or the related Servicer, as applicable, shall be obligated to make any
such Advance only to the extent that such advance would not be a Nonrecoverable
Advance. If the Company or the related Servicer shall have determined that it
has made a Nonrecoverable Advance or that a proposed Advance or a lesser portion
of such Advance would constitute a Nonrecoverable Advance, the Company or the
related Servicer, as the case may be, shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, the Master Servicer,
each Rating Agency and the Trustee an Officer's Certificate setting forth the
basis for such determination.

                  In lieu of making all or a portion of such Advance from its
own funds, the Company may (i) cause to be made an appropriate entry in its
records relating to the Protected Account that any Amounts Held for Future
Distribution has been used by the Company in discharge of its obligation to make
any such Advance and (ii) transfer such funds from the Protected Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Company by deposit in the Distribution Account, no later than the close of
business on the Remittance Date immediately preceding the Distribution Date on
which such funds are required to be distributed pursuant to this Agreement.

                  The Company shall be entitled to be reimbursed from the
Protected Account for all Advances of its own funds made pursuant to this
Section as provided in Section 5.02. The obligation to make Advances with
respect to any EMC Mortgage Loan shall continue until such EMC Mortgage Loan is
paid in full or the related Mortgaged Property or related REO Property has been
liquidated or until the purchase or repurchase thereof (or substitution
therefor) from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section 6.01.

         (b) If the Scheduled Payment on a Mortgage Loan that was due on a
related Due Date and is delinquent other than as a result of application of the
Relief Act and for which the Company or the related Servicer was required to
make an Advance pursuant to this Agreement or the related Servicing Agreement
exceeds the amount deposited in the Master Servicer Collection Account which
will be used for an Advance with respect to such Mortgage Loan, the Master
Servicer will deposit in the Master Servicer Collection Account not later than
the Distribution Account Deposit Date immediately preceding the related
Distribution Date an amount equal to such deficiency, net of the Master
Servicing Fee and the Servicing Fee for such Mortgage Loan except to the extent
the Master Servicer determines any such Advance to be nonrecoverable from
Liquidation Proceeds, Insurance

                                      -98-
<PAGE>

Proceeds or future payments on the Mortgage Loan for which such Advance was
made. Subject to the foregoing, the Master Servicer shall continue to make such
Advances through the date that the Company or the related Servicer is required
to do so under this Agreement or the related Servicing Agreement, as applicable.
If applicable, on the Distribution Account Deposit Date, the Master Servicer
shall present an Officer's Certificate to the Trustee (i) stating that the
Master Servicer elects not to make an Advance in a stated amount and (ii)
detailing the reason it deems the advance to be nonrecoverable.

         Subject to and in accordance with the provisions of Article IX hereof,
in the event the Master Servicer fails to make such Advance, then the Trustee,
as Successor Master Servicer, shall be obligated to make such Advance, subject
to the provisions of this Section 6.01.

         Section 6.02      COMPENSATING INTEREST PAYMENTS.

         (a) In the event that there is a Prepayment Interest Shortfall arising
from a voluntary Principal Prepayment in part or in full by the Mortgagor with
respect to any EMC Mortgage Loan, the Company shall, to the extent of the
Servicing Fee for such Distribution Date, deposit into the Master Servicer
Collection Account, as a reduction of the Servicing Fee for such Distribution
Date, no later than the close of business on the Remittance Date immediately
preceding such Distribution Date, an amount equal to the Prepayment Interest
Shortfall; and in case of such deposit, the Company shall not be entitled to any
recovery or reimbursement from the Depositor, the Trustee, the Seller, the
Securities Administrator, the Trust Fund or the Certificateholders.

         (b) The Master Servicer shall cause each Servicer under the related
Servicing Agreement to remit any required Compensating Interest Payments to the
Master Servicer Collection Account on the Remittance Date.

         (c) The Master Servicer shall be required to remit the amount of any
such Prepayment Interest Shortfalls, to the extent of the Master Servicing
Compensation for such Distribution Date, in the event the Company or the related
Servicer is required to make such payment but fails to do so.

         Section 6.03      REMIC DISTRIBUTIONS.

                  On each Distribution Date the Securities Administrator, as
agent for the Trustee, shall be deemed to make distributions (i) to the REMIC I
Regular Interests in accordance with Section 6.06 hereof and (ii) to the REMIC
II Regular Interests in accordance with Section 6.07 hereof.

         Section 6.04      DISTRIBUTIONS.

                  (a) On each Distribution Date, the Available Funds for such
Distribution Date shall be withdrawn by the Trustee to the extent of funds on
deposit in the Distribution Account and distributed as directed in accordance
with the Remittance Report for such Distribution Date, in the following order of
priority:

                                      -99-
<PAGE>

                  FIRST, from Interest Funds, to pay accrued and unpaid interest
on the Offered Certificates as follows:

                  1. To the holders of the Senior Certificates, the Monthly
         Interest Distributable Amount for each such Class for such Distribution
         Date, on a pro rata basis, based on the entitlement of each such Class;

                  2. To the holders of the Class M-1 Certificates, the Monthly
         Interest Distributable Amount for such Class for such Distribution
         Date;

                  3. To the holders of the Class M-2 Certificates, the Monthly
         Interest Distributable Amount for such Class for such Distribution
         Date; and

                  4. To the holders of the Class B Certificates, the Monthly
         Interest Distributable Amount for such Class for such Distribution
         Date.

         Any Excess Spread to the extent necessary to meet a level of
overcollateralization equal to the Overcollateralization Target Amount will be
the Extra Principal Distribution Amount and will be included as part of the
Principal Distribution Amount. Any Remaining Excess Spread together with any
Overcollateralization Release Amount will be applied as Net Monthly Excess
Cashflow and distributed pursuant to clause THIRD below.

         On any Distribution Date, any Unpaid Interest Shortfalls will be
allocated to the Certificates as set forth in the definition of "Monthly
Interest Distributable Amount" in Section 1.01.

                  SECOND, the Principal Distribution Amount for any Distribution
Date shall be distributed to the Offered Certificates (other than the Class A-6
Certificates), on a pro rata basis, based on the Certificate Principal Balance
of each such Class, until the Certificate Principal Balances thereof have been
reduced to zero.

                  THIRD, on each Distribution Date after the payment of interest
and principal to the Certificates as described in clauses FIRST and SECOND
above, any Net Monthly Excess Cashflow for such Distribution Date will be
distributed as follows:

                  1. To the holders of the Senior Certificates, on a pro rata
         basis, based on the entitlement of each such Class, then to the holders
         of the Class M-1 Certificates, then to the holders of the Class M-2
         Certificates and then to the holders of the Class B Certificates, any
         Unpaid Interest Shortfall for such Classes of Certificates on such
         Distribution Date, to the extent not previously reimbursed;

                  2. To the holders of the Class M-1 Certificates, in an amount
         equal to the Applied Realized Loss Amount for such Class;

                                     -100-
<PAGE>

                  3. To the holders of the Class M-2 Certificates, in an amount
         equal to the Applied Realized Loss Amount for such Class;

                  4. To the holders of the Class B Certificates, in an amount
         equal to the Applied Realized Loss Amount for such Class;

                  5. From amounts otherwise distributable to the Class C
         Certificates, to the Net WAC Reserve Fund, in respect of the Senior
         Certificates, on a pro rata basis, the Net WAC Rate Carryover Amount
         for each such Class for such Distribution Date or any prior
         Distribution Dates to the extent unpaid;

                  6. From amounts otherwise distributable to the Class C
         Certificates, to the Net WAC Reserve Fund, in respect of the Class M-1
         Certificates, the Net WAC Rate Carryover Amount for such Class for such
         Distribution Date or any prior Distribution Dates to the extent unpaid;

                  7. From amounts otherwise distributable to the Class C
         Certificates, to the Net WAC Reserve Fund, in respect of the Class M-2
         Certificates, the Net WAC Rate Carryover Amount for such Class for such
         Distribution Date or any prior Distribution Dates to the extent unpaid;

                  8. From amounts otherwise distributable to the Class C
         Certificates, to the Net WAC Reserve Fund, in respect of the Class B
         Certificates, the Net WAC Rate Carryover Amount for such Class for such
         Distribution Date or any prior Distribution Dates to the extent unpaid;

                  9. To the holders of the Class C Certificates, the Class C
         Distribution Amount less amounts distributed pursuant to items 5, 6, 7
         and 8 above; and

                  10. To the holders of the Class R-3 Certificates, any amount
         of Net Monthly Excess Cashflow remaining after distributions pursuant
         to items 1 through 9 of this clause THIRD.

         In addition, notwithstanding the foregoing, on any Distribution Date
after the Distribution Date on which the Certificate Principal Balance of a
Class of Offered Certificates has been reduced to zero, that Class of Offered
Certificates will be retired and will no longer be entitled to distributions,
including distributions in respect of Unpaid Interest Shortfalls or Net WAC Rate
Carryover Amounts.

                  (b) On each Distribution Date, all amounts representing
Prepayment Charges in respect of the Mortgage Loans received during the related
Prepayment Period and deposited in the Distribution Account will be withdrawn
from the Distribution Account and distributed by the Trustee in accordance with
the Remittance Report to the Class P Certificates and shall not be available for

                                     -101-
<PAGE>

distribution to the holders of any other Class of Certificates. The payment of
such Prepayment Charges shall not reduce the Certificate Principal Balance of
the Class P Certificates.

                  (c) Subject to Section 11.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least 5 Business Days prior to the related Record
Date and (ii) such Holder shall hold Regular Certificates with aggregate
principal denominations of not less than $1,000,000 or evidencing a Percentage
Interest aggregating 10% or more with respect to such Class or, if not, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 11.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.

                  (d) On or before 5:00 p.m. Eastern time on the fifth Business
Day immediately preceding each Distribution Date, the Master Servicer shall
deliver a report to the Securities Administrator in the form of a computer
readable magnetic tape (or by such other means as the Master Servicer and the
Securities Administrator may agree from time to time) containing such data and
information, as agreed to by the Master Servicer and the Securities
Administrator such as to permit the Securities Administrator to prepare the
Monthly Statement to Certificateholders and to direct the Trustee in writing to
make the required distributions for the related Distribution Date (the
"Remittance Report"). The Securities Administrator shall deliver a Remittance
Report to the Trustee on or before 5:00 p.m. Eastern time on the Business Day
immediately preceding each Distribution Date.

         Section 6.04A     ALLOCATION OF REALIZED LOSSES.

         (a) On or prior to each Determination Date, the Master Servicer shall
determine the amount of any Realized Loss in respect of each Mortgage Loan that
occurred during the immediately preceding calendar month.

         (b) The interest portion of Realized Losses shall be allocated to the
Certificates as described in Section 1.02 hereof.

         (c) The principal portion of all Realized Losses on the Mortgage Loans
pursuant to Section 6.04(A)(d) shall be allocated on each Distribution Date as
follows: first, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class B Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; and
fifth, to the Class M-1 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero. All such Realized Losses to be allocated to
the Certificate Principal Balances of all Classes on any Distribution Date shall
be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate

                                     -102-
<PAGE>

Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.

                  Any allocation of the principal portion of Realized Losses to
a Subordinate Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated; any allocation
of Realized Losses to a Class C Certificates shall be made by reducing the
amount otherwise payable in respect thereof pursuant to Section 6.04(a) clause
THIRD. No allocations of any Realized Losses shall be made to the Certificate
Principal Balances of the Senior Certificates or the Class P Certificates.

                  All such Realized Losses and all other losses allocated to a
Class of Certificates hereunder will be allocated among the Certificates of such
Class in proportion to the Percentage Interests evidenced thereby.

                  In addition, in the event that the Master Servicer receives
any Subsequent Recoveries from the Company or the related Servicer, the Master
Servicer shall deposit such funds into the Master Servicer Collection Account
pursuant to Section 5.05. If, after taking into account such Subsequent
Recoveries, the amount of a Realized Loss is reduced, the amount of such
Subsequent Recoveries will be applied to increase the Certificate Principal
Balance of the Class of Subordinate Certificates with the highest payment
priority to which Realized Losses have been allocated, but not by more than the
amount of Realized Losses previously allocated to that Class of Subordinate
Certificates pursuant to this Section 6.04A and not previously reimbursed to
such Class of Subordinate Certificates with Net Monthly Excess Cashflow pursuant
to clause THIRD of Section 6.04(a). The amount of any remaining Subsequent
Recoveries will be applied to sequentially increase the Certificate Principal
Balance of the Subordinate Certificates, beginning with the Class of Subordinate
Certificates with the next highest payment priority, up to the amount of such
Realized Losses previously allocated to such Class of Subordinate Certificates
pursuant to this Section 6.04A and not previously reimbursed to such Class of
Subordinate Certificates with Net Monthly Excess Cashflow pursuant to clause
THIRD of Section 6.04(a). Holders of such Certificates will not be entitled to
any payment in respect of current interest on the amount of such increases for
any Accrual Period preceding the Distribution Date on which such increase
occurs. Any such increases shall be applied to the Certificate Principal Balance
of each Subordinate Certificate of such Class in accordance with its respective
Percentage Interest.

         (d) All Realized Losses on the Mortgage Loans shall be allocated on
each Distribution Date to the following REMIC I Regular Interests in the
specified percentages, as follows: first, to Uncertificated Accrued Interest
payable to the REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to
an aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98%
and 2%, respectively; second, to the Uncertificated Principal Balances of the
REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an aggregate
amount equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%,
respectively; third, to the Uncertificated Principal Balances of REMIC I Regular
Interest AA, REMIC I Regular Interest B and REMIC I Regular Interest ZZ, 98%, 1%
and 1%, respectively, until the Uncertificated Principal Balance of REMIC I
Regular Interest B has

                                     -103-
<PAGE>

been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC
I Regular Interest AA, REMIC I Regular Interest M-2 and REMIC I Regular Interest
ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC I Regular Interest M-2 has been reduced to zero; and fifth, to the
Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-1 and REMIC I Regular Interest ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest M-1 has been reduced to zero.

         (e) All Realized Losses on the Mortgage Loans shall be allocated on
each Distribution Date to the REMIC II Regular Interests in the same manner as
Realized Losses are allocated to the Corresponding Certificates, pursuant to
Section 6.04A(c).

         Section 6.05      MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.

                  (a) Not later than each Distribution Date, the Securities
Administrator shall prepare and make available to each Holder of Certificates,
the Trustee, the Master Servicer and the Depositor a statement setting forth for
the Certificates:

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

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

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

                  (iv) the aggregate of the Stated Principal Balances of all of
         the Mortgage Loans for the following Distribution Date;

                  (v) the amount of the Master Servicing Fee paid to or retained
         by the Master Servicer for the related Due Period and the amount of the
         Servicing Fees paid to or retained by the Company or the related
         Servicer for the related Due Period;

                  (vi) the Pass-Through Rate for each Class of Certificates with
         respect to the current Accrual Period, and, if applicable, whether such
         Pass-Through Rate was limited by the Net WAC Rate Cap;

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

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

                                     -104-
<PAGE>

                  (ix) the number and aggregate principal amounts of Mortgage
         Loans (A) Delinquent (exclusive of Mortgage Loans in foreclosure and
         bankruptcy) (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more
         days, (B) in foreclosure and delinquent (1) 31 to 60 days, (2) 61 to 90
         days and (3) 91 or more days and (C) in bankruptcy and delinquent (1)
         31 to 60 days, (2) 61 to 90 days and (3) 91 or more days, in each case
         as of the close of business on the last day of the calendar month
         preceding such Distribution Date;

                  (x) with respect to any Mortgage Loan that was liquidated
         during the preceding calendar month, the loan number and Stated
         Principal Balance of, and Realized Loss on, such Mortgage Loan as of
         the end of the related Prepayment Period;

                  (xi) the total number and principal balance of any real estate
         owned or REO Properties as of the end of the related Prepayment Period;

                  (xii) the three month rolling average of the percent
         equivalent of a fraction, the numerator of which is the aggregate
         Stated Principal Balance of the Mortgage Loans that are 60 days or more
         delinquent or are in bankruptcy or foreclosure or are REO Properties,
         and the denominator of which is the aggregate Stated Principal Balance
         of all of the Mortgage Loans as of the last day of the calendar month
         preceding such Distribution Date;

                  (xiii) the Realized Losses during the related Prepayment
         Period and the cumulative Realized Losses through the end of the
         preceding month;

                  (xiv) the Net WAC Rate Carryover Amount for each Class of
         Certificates and the amount on deposit in the Net WAC Reserve Fund; and

                  (xv) the amount of the distribution made on such Distribution
         Date to the Holders of the Class P Certificates allocable to Prepayment
         Charges.

                  The Securities Administrator may make the foregoing Monthly
Statement (and, at its option, any additional files containing the same
information in an alternative format) available each month to Certificateholders
via the Securities Administrator's internet website. The Securities
Administrator's internet website shall initially be located at
"www.ctslink.com". Assistance in using the website can be obtained by calling
the Securities Administrator's customer service desk at (301) 815-6600. Parties
that are unable to use the above distribution options are entitled to have a
paper copy mailed to them via first class mail by calling the customer service
desk and indicating such. The Securities Administrator may change the way
Monthly Statements are distributed in order to make such distributions more
convenient or more accessible to the above parties.

         To the extent timely received from the Securities Administrator, the
Trustee will also make the related Monthly Statements available to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at
"https://trustinvestorreporting.usbank.com".

                                     -105-
<PAGE>

Assistance in using the Trustee's internet website can be obtained by calling
the Trustee's customer service desk at (800) 934-6802.

                  (b) The Securities Administrator's responsibility for making
the above information available to the Certificateholders is limited to the
availability, timeliness and accuracy of the information derived from the Master
Servicer, the Company and the Servicers. The Securities Administrator will make
available a copy of each statement provided pursuant to this Section 6.05 to
each Rating Agency.

                  (c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished upon request to each
Person who at any time during the calendar year was a Certificateholder, based
on information provided by the Securities Administrator containing the
information set forth in clauses (a)(i) and (a)(ii) of this Section 6.05
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 or the Securities Administrator
pursuant to any requirements of the Code as from time to time in effect.

                  (d) Upon filing with the Internal Revenue Service, the
Securities Administrator shall furnish to the Holders of the Residual
Certificates the applicable Form 1066 and each applicable Form 1066Q and shall
respond promptly to written requests made not more frequently than quarterly by
any Holder of a Residual Certificate with respect to the following matters:

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

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

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

                  (iv) The original issue discount (or, in the case of the
         Mortgage Loans, market discount) or premium accrued or amortized
         through the end of such calendar quarter with respect to each Class of
         regular or residual interests created hereunder and to the Mortgage
         Loans, together with each constant yield to maturity used in computing
         the same;

                  (v) The treatment of losses realized with respect to the
         Mortgage Loans or the regular interests created hereunder, including
         the timing and amount of any cancellation of indebtedness income of a
         REMIC with respect to such regular interests or bad debt deductions
         claimed with respect to the Mortgage Loans;

                                     -106-
<PAGE>

                  (vi) The amount and timing of any non-interest expenses of a
         REMIC; and

                  (vii) Any taxes (including penalties and interest) imposed on
         the REMIC, including, without limitation, taxes on "prohibited
         transactions," "contributions" or "net income from foreclosure
         property" or state or local income or franchise taxes.

                  The information pursuant to clauses (i), (ii), (iii) and (iv)
above shall be provided by the Depositor pursuant to Section 10.12.

         Section 6.06 REMIC DESIGNATIONS AND REMIC I DISTRIBUTIONS.

                  (a) The Trustee shall elect that each of REMIC I, REMIC II and
REMIC III and shall be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of such
REMIC elections. The assets of REMIC I shall include the Mortgage Loans and all
interest owing in respect of and principal due thereon, the Distribution
Account, the Master Servicer Collection Account, the Protected Accounts
maintained by the Company and the Servicers, any REO Property, any proceeds of
the foregoing and any other assets subject to this Agreement (other than the Net
WAC Reserve Fund). The REMIC I Regular Interests shall constitute the assets of
REMIC II. The REMIC II Regular Interests shall constitute the assets of REMIC
III.

                  (b) On each Distribution Date, the Available Funds, in the
following order of priority and in accordance with the Remittance Report, shall
be deemed distributed by REMIC I to REMIC II on account of the REMIC I Regular
Interests or withdrawn from the Distribution Account and distributed to the
Holders of the Class R-1 Certificates, as the case may be:

                           (i) first, to the Holders of REMIC I Regular Interest
AA, REMIC Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular
Interest A-3, REMIC I Regular Interest A-4, REMIC I Regular Interest A-5, REMIC
I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B
and REMIC I Regular Interest ZZ, pro rata, in an amount equal to (A) the
Uncertificated Accrued Interest for each such REMIC I Regular Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates. Amounts payable as Uncertificated Accrued Interest
in respect of REMIC I Regular Interest ZZ shall be reduced and deferred when the
REMIC I Overcollateralized Amount is less than the REMIC I Overcollateralization
Target Amount, by the lesser of (x) the amount of such difference and (y) the
REMIC I Regular Interest ZZ Maximum Interest Deferral Amount and such amount
will be payable to the Holders of REMIC Regular Interest A-1, REMIC I Regular
Interest A-2, REMIC I Regular Interest A-3, REMIC I Regular Interest A-4, REMIC
I Regular Interest A-5, REMIC I Regular Interest M-1, REMIC I Regular Interest
M-2 and REMIC I Regular Interest B in the same proportion as the
Overcollateralization Increase Amount is allocated to the Corresponding
Interests, respectively, and the Uncertificated Principal Balance of REMIC I
Regular Interest ZZ shall be increased by such amount;

                                     -107-
<PAGE>

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

                                    (A) 98.00% of such remainder (other than
amounts payable under the proviso below) to the Holders of REMIC I Regular
Interest AA,, until the Uncertificated Principal Balance of such REMIC I Regular
Interest is reduced to zero;

                                    (B) 2.00% of such remainder (other than
amounts payable under the proviso below), first, to the Holders of REMIC Regular
Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest A-3, REMIC
I Regular Interest A-4, REMIC I Regular Interest A-5, REMIC I Regular Interest
M-1, REMIC I Regular Interest M-2 and REMIC I Regular Interest B, in an
aggregate amount equal to 1.00% of and in the same proportion as principal
payments are allocated to the Corresponding Interests, until the Uncertificated
Principal Balances of such REMIC I Regular Interests are reduced to zero; and
second, to the Holders of REMIC I Regular Interest ZZ, such remainder (other
than amounts payable under the proviso below), until the Uncertificated
Principal Balance of such REMIC I Regular Interest is reduced to zero; then

                                    (C) any remaining amount to the Holders of
the Class R-1 Certificates;

                  (c) On each Distribution Date, all amounts representing
Prepayment Charges deemed distributed in respect of REMIC II Regular Interest P
shall be deemed distributed in respect of REMIC I Regular Interest P, provided
that such amounts shall not reduce the Uncertificated Principal Balance of REMIC
I Regular Interest P. On the Distribution Date in August 2009, $100 shall be
deemed distributed in respect of REMIC I Regular Interest P in reduction of the
Uncertificated Principal Balance thereof.

         Section 6.07 REMIC II DISTRIBUTIONS AND CERTAIN REMIC III
                      DISTRIBUTIONS.

                  (a) On each Distribution Date, the Available Funds, in the
following order of priority and in accordance with the Remittance Report, shall
be deemed 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 R-2 Certificates, as the case may be:

                  (i) to the Holders of the REMIC II Regular Interests, in the
same manner and priority as paid to the Corresponding Certificates,

                           (A) the Uncertificated Accrued Interest (or, in the
case of REMIC II Regular Interest C, the REMIC II Regular Interest C
Distribution Amount) for such Distribution Date, plus

                                     -108-
<PAGE>

                           (B) any amounts in respect thereof remaining unpaid
from previous Distribution Dates and

                  (ii) to the Holders of REMIC II Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution Date
after the distributions made pursuant to clause (i) above, allocated in the same
manner and priority as paid to the Corresponding Certificates, and any remaining
amount to the Holders of the Class R-2 Certificates.

                  (b) On each Distribution Date, all amounts representing
Prepayment Charges distributed in respect of the Class P Certificates shall be
deemed distributed in respect of REMIC II Regular Interest P, provided that such
amounts shall not reduce the Uncertificated Principal Balance of REMIC II
Regular Interest P. On the Distribution Date in August 2009, $100 shall be
deemed distributed in respect of REMIC II Regular Interest P in reduction of the
Uncertificated Principal Balance thereof.

                  (c) On each Distribution Date, (i) the related Uncertificated
Accrued Interest for such Distribution Date, plus any amounts in respect thereof
remaining unpaid from previous Distribution Dates, shall be deemed distributed
in respect of REMIC III Regular Interest A-5 and REMIC III Regular Interest A-6
and (ii) amounts distributable in reduction of the Certificate Principal Balance
of the Class A-5 Certificates shall be deemed distributed to the Holders of
REMIC III Regular Interest A-5 in reduction of the Uncertificated Principal
Balance thereof.

         Section 6.08 NET WAC RESERVE FUND AND CLASS A-5/A-6 NET WAC PASS-
                      THROUGH AMOUNTS.

         (a) The Trustee shall establish a Net WAC Reserve Fund on behalf of the
holders of the Offered Certificates. The Net WAC Reserve Fund must be an
Eligible Account. The Net WAC Reserve Fund shall be entitled "Net WAC Reserve
Fund, U.S. Bank National Association as Trustee for the benefit of holders of
Bear Stearns Asset Backed Securities I LLC, Asset- Backed Certificates, Series
2004-AC4, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class M-1, Class M-2 and Class B". On the Closing Date, the Depositor will
deposit, or cause to be deposited, into the Net WAC Reserve Fund $5,000. On each
Distribution Date as to which there is a Net WAC Rate Carryover Amount payable
to any Class of Certificates, the Trustee shall, in accordance with the
Remittance Report for such Distribution Date, deposit the amounts pursuant to
paragraphs 5, 6, 7 and 8 of clause THIRD of Section 6.04(a) into the Net WAC
Reserve Fund and the Trustee has been directed by the Class C Certificateholder
to distribute such amounts to the Holders of the Offered Certificates in the
amounts and priorities set forth in clause THIRD of Section 6.04(a).

         (b) The Net WAC Reserve Fund is an "outside reserve fund" within the
meaning of Treasury Regulation ss.1.860G-2(h) and shall be an asset of the Trust
Fund but not an asset of any REMIC. The Trustee on behalf of the Trust shall be
the nominal owner of the Net WAC Reserve Fund. The Class C Certificateholders
shall be the beneficial owners of the Net WAC Reserve Fund,

                                     -109-
<PAGE>

subject to the power of the Trustee to transfer amounts under Section 6.04(a).
Amounts in the Net WAC Reserve Fund shall be held either uninvested in a trust
or deposit account of the Trustee with no liability for interest or other
compensation thereof or, at the direction of the Majority Class C
Certificateholder, be invested in Permitted Investments that mature no later
than the Business Day prior to the next succeeding Distribution Date. All net
income and gain from such investments shall be distributed to the Majority Class
C Certificateholder, not as a distribution in respect of any interest in any
REMIC, on such Distribution Date. All amounts earned on amounts on deposit in
the Net WAC Reserve Fund shall be taxable to the Majority Class C
Certificateholder. Any losses on such investments shall be deposited in the Net
WAC Reserve Fund by the Majority Class C Certificateholder out of its
own funds immediately as realized. In the event that the Majority Class C
Certificateholder shall fail to provide investment instructions to the Trustee,
the amounts on deposit in the Net WAC Reserve Fund shall be held uninvested.

         (c) For federal tax return and information reporting, the right of the
holders of the Offered Certificates to receive payments from the Net WAC Reserve
Fund in respect of any Net WAC Rate Carryover Amount shall be assigned a value
of zero.

         (d) With respect to each Distribution Date as to which there is a
positive Class A- 5/A-6 Net WAC Pass-Through Amount, such amount shall be
payable from the Holders of the Class A-5 Certificates to the Holders of the
Class A-6 Certificates. Accordingly, on each such Distribution Date the Trustee
shall deposit into the Net WAC Reserve Fund the Class A-5/A-6 Net WAC
Pass-Through Amount, rather than distributing such amount to the Class A-5
Certificateholders. Notwithstanding the foregoing, such Class A-5/A-6 Net WAC
Pass-Through Amount shall for federal, state and local tax purposes be deemed
distributed in respect of REMIC III Regular Interest A-5 and the Class A-5
Certificates.

         On each such Distribution Date, the Trustee shall hold the Class
A-5/A-6 Net WAC Pass-Through Amount for the benefit of the Holders of the Class
A-6 Certificates, and shall distribute such amount to the Holders of the Class
A-6 Certificates. Payments to the Holders of the Class A-6 Certificates of any
Class A-5/A-6 Net WAC Pass-Through Amount will not be payments with respect to a
"regular interest" in a REMIC within the meaning of Code Section 860G(a)(1).

         By accepting a Class A-5 Certificate, each Class A-5 Certificateholder
thereby agrees to direct the Trustee, and the Trustee hereby is directed, to
deposit into the Net WAC Reserve Fund any Class A-5/A-6 Net WAC Pass-Through
Amount rather than distributing such amounts to the Class A-5 Certificateholders
and further agrees that such direction is given for good and valuable
consideration, the receipt and sufficiency of which is acknowledged by such
acceptance. By accepting a Class A-5 Certificate, each Class A-5
Certificateholder acknowledges that any such Class A-5/A-6 Net WAC Pass-Through
Amount shall for federal, state and local tax purposes be deemed distributed in
respect of REMIC III Regular Interest A-5 and the Class A-5 Certificates. By
accepting a Class A-6 Certificate, each Class A-6 Certificateholder acknowledges
that for federal, state and local tax purposes any payments of such Class
A-5/A-6 Net WAC Pass- Through Amount shall not be

                                     -110-
<PAGE>

payments with respect to a "regular interest" in a REMIC within the meaning of
Code Section 860G(a)(1).

         Section 6.09 CLASS P CERTIFICATE ACCOUNT. The Trustee shall establish
and maintain with itself a separate, segregated trust account titled "Bear
Stearns Asset-Backed Securities I Trust 2004-AC4 Class P Certificate Account".
On the Closing Date, the Depositor will deposit, or cause to be deposited in the
Class P Certificate Account $100.00. The amount on deposit in the Class P
Certificate Account shall be held uninvested. On the August 2009 Distribution
Date, the Trustee shall withdraw the amount on deposit in the Class P
Certificate Account and remit such amount to the holders of the Class P
Certificates in reduction of the Certificate Principal Balance thereof.

                                     -111-
<PAGE>

                                                    ARTICLE VII

                                                 THE CERTIFICATES

         Section 7.01      THE CERTIFICATES.

                  The Certificates shall be substantially in the forms attached
hereto as Exhibits A-1 through A-6. The Certificates shall be issuable in
registered form, in the minimum dollar denominations, integral dollar multiples
in excess thereof (except that one Certificate of each Class may be issued in a
different amount which must be in excess of the applicable minimum dollar
denomination) and aggregate dollar denominations as set forth in the following
table:

<TABLE>
<CAPTION>
               Minimum       Integral Multiple in  Original Certificate
Class        Denomination      Excess of Minimum    Principal Balance           Pass-Through Rate
-----        ------------    --------------------  ---------------------   ---------------------------
<S>            <C>                  <C>                 <C>                <C>
 A-1           $25,000              $1,000              $75,000,000        Class A-1 Pass-Through Rate
 A-2           $25,000              $1,000              $185,885,000       Class A-2 Pass-Through Rate
 A-3           $25,000              $1,000              $75,000,000        Class A-3 Pass-Through Rate
 A-4           $25,000              $1,000               $10,00,000        Class A-4 Pass-Through Rate
 A-5           $25,000              $1,000              $13,600,000        Class A-5 Pass-Through Rate
 A-6           $25,000              $1,000                  N/A            Class A-6 Pass-Through Rate
 M-1           $25,000              $1,000              $38,069,000        Class M-1 Pass-Through Rate
 M-2           $25,000              $1,000              $28,266,000        Class M-2 Pass-Through Rate
  B            $25,000              $1,000              $26,215,000         Class B Pass-Through Rate
  C            $25,000              $1,000                  N/A                        N/A
  P               $100                N/A                 $100.00                      N/A
 R-1              100%                N/A                   N/A                        N/A
 R-2              100%                N/A                   N/A                        N/A
 R-3              100%                N/A                   N/A                        N/A
</TABLE>

                  The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate the
countersignature of the Trustee by manual signature, and such countersignature
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly countersigned and delivered hereunder. All
Certificates shall be dated the date of their countersignature. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.

                  The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.

                                     -112-
<PAGE>

         Section 7.02 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 7.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of like aggregate Percentage Interest.

                  At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.

                  No service charge to the Certificateholders shall be made for
any registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.

                  All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.

                  (b) No Transfer of a Private Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall each certify
to the Trustee and the Securities Administrator in writing the facts surrounding
the Transfer in substantially the forms set forth in Exhibit D (the "Transferor
Certificate") and (x) deliver a letter in substantially the form of either
Exhibit E (the "Investment Letter") or Exhibit F (the "Rule 144A Letter") or (y)
there shall be delivered to the Trustee and the Securities Administrator an
Opinion of Counsel addressed to the Trustee and the Securities Administrator
that such Transfer may be made pursuant to an exemption from the Securities Act,
which Opinion of Counsel shall not be an expense of the Depositor, the Seller,
the Master Servicer, the Securities Administrator or the Trustee. The Depositor
shall provide to any Holder of a Private Certificate and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule

                                     -113-
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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, the Securities Administrator 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, the Securities Administrator and the Master Servicer
against any liability that may result if the Transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  No Transfer of an ERISA Restricted Certificate shall be made
unless either (i) the Trustee, the Master Servicer and the Securities
Administrator shall have received a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Trustee,
the Master Servicer and the Securities Administrator, to the effect that such
transferee is not an employee benefit plan subject to Section 406 of ERISA
and/or a plan subject to Section 4975 of the Code, or a Person acting on behalf
of any such plan or using the assets of any such plan, or (ii) in the case of
any such ERISA Restricted Certificate presented for registration in the name of
an employee benefit plan subject to ERISA, or a plan subject to Section 4975 of
the Code (or comparable provisions of any subsequent enactments), or a trustee
of any such plan or any other person acting on behalf of any such plan, the
Trustee shall have received an Opinion of Counsel for the benefit of the
Trustee, the Master Servicer and the Securities Administrator and on which they
may rely, satisfactory 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 the assets of the Trust being deemed to be
"plan assets" under ERISA or the Code, will not result in any prohibited
transactions under ERISA or Section 4975 of the Code and will not subject the
Trustee, the Master Servicer, the Depositor or the Securities Administrator to
any obligation in addition to those expressly undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the Master
Servicer, the Depositor or the Securities Administrator. Notwithstanding
anything else to the contrary herein, any purported transfer of an ERISA
Restricted Certificate to or on behalf of an employee benefit plan subject to
Section 406 of ERISA and/or a plan subject to Section 4975 of the Code without
the delivery of the Opinion of Counsel as described above shall be void and of
no effect; provided that the restriction set forth in this sentence shall not be
applicable if there has been delivered to the Trustee an Opinion of Counsel
meeting the requirements of clause (ii) of the first sentence of this paragraph.
None of the Trustee, the Securities Administrator or the Master Servicer shall
be required to monitor, determine or inquire as to compliance with the transfer
restrictions with respect to any ERISA Restricted Certificate that is a
Book-Entry Certificate, and none of the Trustee, the Securities Administrator or
the Master Servicer shall have any liability for transfers of any such
Book-Entry Certificates made through the book-entry facilities of any Depository
or between or among participants of the Depository or Certificate Owners made in
violation of the transfer restrictions set forth herein. None of the Trustee,
the Securities Administrator or the Master Servicer shall be under any liability
to any Person for any registration of transfer of any ERISA Restricted
Certificate that is in fact not permitted by this Section 7.02(b) or for making
any payments due on such Certificate to the Holder thereof or taking any other

                                     -114-
<PAGE>

action with respect to such Holder under the provisions of this Agreement. The
Trustee and the Securities Administrator shall each be entitled, but not
obligated, to recover from any Holder of any ERISA Restricted Certificate that
was in fact an employee benefit plan subject to Section 406 of ERISA or a plan
subject to Section 4975 of the Code or a Person acting on behalf of any such
plan at the time it became a Holder or, at such subsequent time as it became
such a plan or Person acting on behalf of such a plan, all payments made on such
ERISA Restricted Certificate at and after either such time. Any such payments so
recovered by the Trustee or the Securities Administrator shall be paid and
delivered by the Trustee or the Securities Administrator to the last preceding
Holder of such Certificate that is not such a plan or Person acting on behalf of
a plan.

         Each beneficial owner of a Subordinate Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of that certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets", (ii) it has acquired and is holding such
certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by S&P, Fitch Ratings or Moody's, and the certificate is so
rated or (iii) (1) it is an insurance company, (2) the source of funds used to
acquire or hold the certificate or interest therein is an "insurance company
general account," as such term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE
95-60 have been satisfied.

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

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

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

                  (iii) Each Person holding or acquiring any Ownership Interest
         in a Residual Certificate shall agree (A) to obtain a Transfer
         Affidavit from any other Person to whom such Person attempts to
         Transfer its Ownership Interest in a Residual Certificate, (B) to
         obtain a Transfer Affidavit from any Person for whom such Person is
         acting as nominee, trustee or agent in connection with any Transfer of
         a Residual Certificate and (C) not to Transfer its Ownership Interest
         in a Residual Certificate or to cause the Transfer of an Ownership
         Interest in a Residual

                                     -115-
<PAGE>

         Certificate to any other Person if it has actual knowledge that such
         Person is not a Permitted Transferee.

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Residual Certificate in violation of the provisions of
         this Section 7.02(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 Residual Certificate in violation of the
         provisions of this Section 6.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Residual
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Residual Certificate that is in fact
         not permitted by Section 7.02(b) and this Section 7.02(c) or for making
         any payments due on such Certificate to the Holder thereof or taking
         any other action with respect to such Holder under the provisions of
         this Agreement so long as the Transfer was registered after receipt of
         the related Transfer Affidavit. The Trustee shall be entitled but not
         obligated to recover from any Holder of a Residual Certificate that was
         in fact not a Permitted Transferee at the time it became a Holder or,
         at such subsequent time as it became other than a Permitted Transferee,
         all payments made on such Residual Certificate at and after either such
         time. Any such payments so recovered by the Trustee shall be paid and
         delivered by the Trustee to the last preceding Permitted Transferee of
         such Certificate.

                  (v) The Master Servicer shall make available within 60 days of
         written request from the Trustee, all information necessary to compute
         any tax imposed under Section 860E(e) of the Code as a result of a
         Transfer of an Ownership Interest in a Residual Certificate to any
         Holder who is not a Permitted Transferee.

                  The restrictions on Transfers of a Residual Certificate set
forth in this Section 7.02(c) shall cease to apply (and the applicable portions
of the legend on a Residual Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel
addressed to the Trustee, which Opinion of Counsel shall not be an expense of
the Trustee, the Securities Administrator, the Seller or the Master Servicer to
the effect that the elimination of such restrictions will not cause REMIC I,
REMIC II and/or REMIC III, as applicable, to fail to qualify as a REMIC at any
time that the Certificates are outstanding or result in the imposition of any
tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any ownership Interest in a Residual Certificate hereby
consents to any amendment of this Agreement that, based on an Opinion of Counsel
addressed to the Trustee and furnished to the Trustee, is reasonably necessary
(a) to ensure that the record ownership of, or any beneficial interest in, a
Residual Certificate is not transferred, directly or indirectly, to a Person
that is not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Residual Certificate that is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.

                  (d) The preparation and delivery of all certificates and
opinions referred to above in this Section 7.02 shall not be an expense of the
Trust Fund, the Trustee, the Depositor, the Seller, the Securities Administrator
or the Master Servicer.

                                     -116-
<PAGE>

         Section 7.03 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 Securities Administrator 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 7.03, 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 7.03
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 7.03 shall be canceled and destroyed by
the Trustee in accordance with its standard procedures without liability on its
part.

         Section 7.04 PERSONS DEEMED OWNERS.

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

         Section 7.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.

                  If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or the Master Servicer shall request such information in writing from
the Trustee, then the Trustee shall, within ten Business Days after the receipt
of such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.

         Section 7.06 BOOK-ENTRY CERTIFICATES.

                                     -117-
<PAGE>

                  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 7.08. Unless and until definitive, fully registered
Certificates ("Definitive Certificates") have been issued to the Certificate
Owners of such Certificates pursuant to Section 7.08:

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

                  (b) the Depositor, the Securities Administrator 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 7.08, the Depository will make book-
entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;

                  (e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;

                  (f) the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and

                  (g) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
shall control.

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

         Section 7.07      NOTICES TO DEPOSITORY.

                                     -118-
<PAGE>

                  Whenever any notice or other communication is required to be
given to Certificateholders of a Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Trustee shall give all
such notices and communications to the Depository.

         Section 7.08      DEFINITIVE CERTIFICATES.

                  If, after Book-Entry Certificates have been issued with
respect to any Certificates, (a) the Depositor or the Depository advises the
Trustee that the Depository is no longer willing or able to discharge properly
its responsibilities under the Depository Agreement with respect to such
Certificates and the Depositor is unable to locate a qualified successor, (b)
the Depositor, at its sole option, advises the Trustee that it elects to
terminate the book-entry system with respect to such Certificates through the
Depository or (c) after the occurrence and continuation of an Event of Default,
Certificate Owners of such Book-Entry Certificates having not less than 51% of
the Voting Rights evidenced by any Class of Book-Entry Certificates advise the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book- entry system with respect to Certificates of such
Class through the Depository (or its successor) is no longer in the best
interests of the Certificate Owners of such Class, then the Trustee shall notify
all Certificate Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to applicable Certificate Owners requesting the same. The Depositor shall
provide the Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the Trustee
of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall countersign
and deliver such Definitive Certificates. Neither the Depositor nor the Trustee
shall be liable for any delay in delivery of such instructions and each may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of such Definitive Certificates, all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.

         Section 7.09      MAINTENANCE OF OFFICE OR AGENCY.

                  The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies at U.S. Bank National
Association, 60 Livingston Avenue, Bond Drop Window, St. Paul, Minnesota 55107
where Certificates may be surrendered for registration of transfer or exchange.
The Trustee will give prompt written notice to the Certificateholders of any
change in such location of any such office or agency.

                                     -119-
<PAGE>

                                  ARTICLE VIII

                       THE COMPANY AND THE MASTER SERVICER

         Section 8.01 LIABILITIES OF THE DEPOSITOR, THE COMPANY AND THE MASTER
SERVICER. Each of the Depositor, the Company and the Master Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by it herein.

         Section 8.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR, THE COMPANY OR
THE MASTER SERVICER.

                  (a) Each of the Depositor, the Company and the Master Servicer
will keep in full force and effect its existence, rights and franchises as a
corporation under the laws of the state of its incorporation, and will obtain
and preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates or any of the
Mortgage Loans and to perform its duties under this Agreement.

                  (b) Any Person into which the Depositor, the Company or the
Master Servicer may be merged or consolidated, or any corporation resulting from
any merger or consolidation to which the Depositor, the Company or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, the Company or the Master Servicer, shall be the successor of the
Depositor, the Company or the Master Servicer hereunder, without the execution
or filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

         Section 8.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND
THE SECURITIES ADMINISTRATOR.

                  (a) The Master Servicer agrees to indemnify the Indemnified
Persons for, and to hold them harmless against, any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or relating to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, including the powers of attorney delivered
pursuant to Sections 4.01 and 4.05 hereof, the Assignment Agreements, the
Custodial Agreement or the Certificates (i) related to the Master Servicer's
failure to perform its duties in compliance with this Agreement (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or (ii) incurred by reason of the Master Servicer's willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, provided, in each case, that with respect to any such claim or legal
action (or pending or threatened claim or legal action), the Trustee shall have
given the Master Servicer and the Seller written notice thereof promptly after
the Trustee shall have with respect to such claim or legal action knowledge
thereof; provided,

                                     -120-
<PAGE>

however that the failure to give such notice shall not relieve the Master
Servicer of its indemnification obligations hereunder. This indemnity shall
survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.

                  (b) The Company agrees to indemnify the Indemnified Persons
and to hold them harmless from and against any and all claims, losses, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indemnified Persons may sustain in any
way related to the failure of the Company to perform in any way its duties and
service the EMC Mortgage Loans in strict compliance with the terms of this
Agreement and for breach of any representation or warranty of the Company
contained herein. The Company shall immediately notify the Master Servicer and
the Trustee if a claim is made by a third party with respect to this Agreement
or the EMC Mortgage Loans, assume (with the consent of the Master Servicer and
the Trustee and with counsel reasonably satisfactory to the Master Servicer and
the Trustee) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or any Indemnified Person in
respect of such claim but failure to so notify the Company shall not limit its
obligations hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the consent of the Indemnified Persons
unless such settlement includes an unconditional release of such Indemnified
Persons from all liability that is the subject matter of such claim. The
provisions of this Section 8.03(b) shall survive termination of this Agreement.

                  (c) The Seller will indemnify any Indemnified Person for any
loss, liability or expense of any Indemnified Person not otherwise paid or
covered pursuant to Subsections (a) or (b) above.

         Section 8.04 LIMITATIONS ON LIABILITY OF THE DEPOSITOR, THE COMPANY,
THE MASTER SERVICER AND OTHERS. Subject to the obligation of the Seller, the
Company and the Master Servicer to indemnify the Indemnified Persons pursuant to
Section 8.03:

                  (a) Neither the Depositor, the Company, the Master Servicer
nor any of the directors, officers, employees or agents of the Depositor, the
Company and the Master Servicer shall be under any liability to the Indemnified
Persons, the Trust Fund or the Certificateholders for taking any action or for
refraining from taking any action in good faith pursuant to this Agreement, or
for errors in judgment; provided, however, that this provision shall not protect
the Depositor, the Company, the Master Servicer or any such Person against any
breach of warranties or representations made herein or any liability which would
otherwise be imposed by reason of such Person's willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.

                  (b) The Depositor, the Company, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Company and the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.

                                     -121-
<PAGE>

                  (c) The Depositor, the Company, the Master Servicer, the
Trustee, the Custodian and any director, officer, employee or agent of the
Depositor, the Company, the Master Servicer, the Trustee or the Custodian shall
be indemnified by the Trust and held harmless thereby against any loss,
liability or expense (including reasonable legal fees and disbursements of
counsel) incurred on their part that may be sustained in connection with,
arising out of, or related to, any claim or legal action (including any pending
or threatened claim or legal action) relating to this Agreement, the Assignment
Agreements, the Custodial Agreement, the Certificates or the Servicing
Agreements (except with respect to the Master Servicer only, to the extent that
the Master Servicer is indemnified by the Company under this Agreement or by the
related Servicer under the related Servicing Agreement), other than (i) any such
loss, liability or expense related to the Company's or the Master Servicer's
failure to perform its respective duties in compliance with this Agreement
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement), or to the Custodian's failure to perform its duties
under the Custodial Agreement, or (ii) any such loss, liability or expense
incurred by reason of the Company's, the Master Servicer's or the Custodian's
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or under the Custodial Agreement, as applicable, or by reason of
reckless disregard of obligations and duties hereunder or under the Custodial
Agreement, as applicable.

                  (d) Neither the Depositor, the Company nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its duties under this Agreement and that in its
opinion may involve it in any expense or liability; provided, however, the
Master Servicer may in its discretion, with the consent of the Trustee (which
consent shall not be unreasonably withheld), undertake any such action which it
may deem necessary or desirable with respect to this Agreement and the rights
and duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Master Servicer shall be entitled to be reimbursed therefor
out of the Master Servicer Collection Account as provided by Section 5.05.
Nothing in this Subsection 8.04(d) shall affect the Master Servicer's obligation
to supervise, or to take such actions as are necessary to ensure, the servicing
and administration of the Mortgage Loans pursuant to Subsection 4.01(a).

                  (e) In taking or recommending any course of action pursuant to
this Agreement, unless specifically required to do so pursuant to this
Agreement, the Master Servicer shall not be required to investigate or make
recommendations concerning potential liabilities which the Trust might incur as
a result of such course of action by reason of the condition of the Mortgaged
Properties but shall give notice to the Trustee if it has notice of such
potential liabilities.

                  (f) The Master Servicer shall not be liable for any acts or
omissions of the Company or the Servicers, except as otherwise expressly
provided herein.

         Section 8.05 MASTER SERVICER AND COMPANY NOT TO RESIGN. (a) Except as
provided in Section 8.07, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) with the prior written
consent of the Trustee (which consent shall not be unreasonably

                                     -122-
<PAGE>

withheld) or (ii) upon a determination that any such duties hereunder are no
longer permissible under applicable law and such impermissibility cannot be
cured. Any such determination permitting the resignation of the Master Servicer
shall be evidenced by an Opinion of Counsel to such effect, addressed to and
delivered to, the Trustee. No such resignation by the Master Servicer shall
become effective until EMC or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section 9.02 hereof.
The Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer.

                  (b) The Company shall not resign from the obligations and
duties hereby imposed on it except (i) upon the assignment of its servicing
duties with respect to all or a portion of the EMC Mortgage Loans to an
institution that is a Fannie Mae and Freddie Mac approved seller/servicer in
good standing that has a net worth of not less than $10,000,000 and with the
prior written consent of the Master Servicer (which consent shall not be
unreasonably withheld) or (ii) upon the determination that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by the Company. Any determination permitting the resignation of the
Company shall be evidenced by an Opinion of Counsel to such effect addressed to
and delivered, to the Master Servicer and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Master Servicer and the
Trustee. No appointment of a successor to the Company shall be effective
hereunder unless (a) the Rating Agencies have confirmed in writing that such
appointment will not result in a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates, (b) such successor shall have
represented that it is meets the eligibility criteria set forth in clause (i)
above and (c) such successor has agreed to assume the obligations of the Company
hereunder to the extent of the EMC Mortgage Loans to be serviced by such
successor. The Company shall provide a copy of the written confirmation of the
Rating Agencies and the agreement executed by such successor to the Master
Servicer and the Trustee. No such resignation shall become effective until a
Qualified Successor or the Master Servicer shall have assumed the Company's
responsibilities and obligations hereunder. The Company shall notify the Master
Servicer, the Trustee and the Rating Agencies of the resignation of the Company
or the assignment of all or a portion of its servicing duties hereunder in
accordance with this Section 8.05.

         Section 8.06 SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor Master Servicer or the assumption of the duties of
the Master Servicer, EMC or the Trustee may make such arrangements for the
compensation of such successor master servicer out of payments on the Mortgage
Loans as EMC or the Trustee and such successor master servicer shall agree. If
the successor master servicer does not agree that such market value is a fair
price, such successor master servicer shall obtain two quotations of market
value from third parties actively engaged in the servicing of single-family
mortgage loans. In no event shall the compensation of any successor master
servicer exceed that permitted the Master Servicer without the consent of all of
the Certificateholders.

         Section 8.07 SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and EMC may terminate
the Master Servicer without cause and select a new Master

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<PAGE>

Servicer; provided, however, that: (i) the purchaser or transferee accepting
such assignment and delegation (a) shall be a Person which (or an Affiliate
thereof the primary business of which is the servicing of conventional
residential mortgage loans) shall be qualified to service mortgage loans for
Fannie Mae or Freddie Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; (iii) the Master Servicer assigning and selling the
master servicing shall deliver to the Trustee an Officer's Certificate and an
Opinion of Counsel addressed to the Trustee, each stating that all conditions
precedent to such action under this Agreement have been completed and such
action is permitted by and complies with the terms of this Agreement; and (iv)
in the event the Master Servicer is terminated without cause by EMC, EMC shall
pay, from its own funds and without any right of reimbursement, the terminated
Master Servicer a termination fee equal to 0.25% of the aggregate Stated
Principal Balance of the Mortgage Loans at the time the master servicing of the
Mortgage Loans is transferred to the successor Master Servicer. No such
assignment or delegation shall affect any liability of the Master Servicer
arising prior to the effective date thereof.

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                                   ARTICLE IX

                    DEFAULT; TERMINATION OF MASTER SERVICER;
                             TERMINATION OF COMPANY

         Section 9.01      EVENTS OF DEFAULT.

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

                  (i) any failure by the Master Servicer to remit to the Trustee
         any amounts received or collected by the Master Servicer in respect of
         the Mortgage Loans and required to be remitted by it hereunder or any
         Advance required to be made by it pursuant to this Agreement, which
         failure shall continue unremedied for one Business Day after the date
         on which written notice of such failure shall have been given to the
         Master Servicer by the Trustee or the Depositor, or to the Trustee and
         the Master Servicer by the Holders of Certificates evidencing not less
         than 25% of the Voting Rights evidenced by the Certificates; 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 breach
         of a representation or warranty by the Master Servicer, which failure
         or breach shall continue unremedied for a period of 60 days after the
         date on which written notice of such failure shall have been given to
         Master Servicer by the Trustee or the Depositor, or to the Trustee and
         the Master Servicer by the Holders of Certificates evidencing not less
         than 25% of the Voting Rights evidenced by the Certificates; 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; or

                  (v) the Master Servicer shall admit in writing its inability
         to pay its debts generally as they become due, file a petition to take
         advantage of, 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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<PAGE>

                  (vi) the Master Servicer assigns or delegates its duties or
         rights under this Agreement in contravention of the provisions
         permitting such assignment or delegation under Sections 8.05 or 8.07.

                  If an Event of Default shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been remedied,
the Trustee may, and at the direction of the Holders of Certificates evidencing
not less than 25% of the Voting Rights evidenced by the Certificates, the
Trustee shall, 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 (and the Securities Administrator if the Master Servicer and the
Securities Administrator are the same entity) 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 (and, if
applicable, the Securities Administrator) hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee, or any
successor appointed pursuant to Section 9.02 (a "Successor Master Servicer" and,
if applicable, "Successor Securities Administrator"). Such Successor Master
Servicer shall thereupon if such Successor Master Servicer is a successor to the
Master Servicer, make any Advance required by Article VI, subject, in the case
of the Trustee, to Section 9.02. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the terminated Master Servicer and, if
applicable, the terminated Securities Administrator, as attorney- in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of any Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Master Servicer to pay amounts owed pursuant to Article VIII
or Article X. The Master Servicer and, if applicable, the Securities
Administrator agrees to cooperate with the Trustee in effecting the termination
of the Master Servicer's and, if applicable, the Securities Administrator's
responsibilities and rights hereunder, including, without limitation, the
transfer to the applicable Successor Master Servicer of all cash amounts which
shall at the time be credited to the Master Servicer Collection Account
maintained pursuant to Section 5.05, or thereafter be received with respect to
the applicable Mortgage Loans. The Trustee shall promptly notify the Rating
Agencies of the occurrence of an Event of Default known to the Trustee.

                  Notwithstanding any termination of the activities of the
Master Servicer hereunder, the Master Servicer shall be entitled to receive, out
of any late collection of a Scheduled Payment on a Mortgage Loan that was due
prior to the notice terminating the Master Servicer's rights and obligations as
Master Servicer hereunder and received after such notice, that portion thereof
to which the Master Servicer would have been entitled pursuant to Sections 5.05
and to receive any other amounts payable to the Master Servicer hereunder the
entitlement to which arose prior to the termination of its activities hereunder.

         Section 9.02      TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

                                     -126-
<PAGE>

                  On and after the time the Master Servicer receives a notice of
termination pursuant to Section 9.01 hereof the Trustee shall automatically
become the successor to the Master Servicer with respect to the transactions set
forth or provided for herein and after a transition period (not to exceed 90
days), shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof; provided, however that, pursuant to Article VI hereof, the Trustee in
its capacity as successor Master Servicer shall be responsible for making any
Advances required to be made by the Master Servicer immediately upon the
termination of the Master Servicer and any such Advance shall be made on the
Distribution Date on which such Advance was required to be made by the
predecessor Master Servicer. Effective on the date of such notice of
termination, as compensation therefor, the Trustee shall be entitled to all
compensation, reimbursement of expenses and indemnifications that the Master
Servicer would have been entitled to if it had continued to act hereunder,
provided, however, that the Trustee shall not be (i) liable for any acts or
omissions of the Master Servicer, (ii) obligated to make Advances if it is
prohibited from doing so under applicable law, (iii) responsible for expenses of
the Master Servicer pursuant to Section 2.03 or (iv) obligated to deposit losses
on any Permitted Investment directed by the Master Servicer. Notwithstanding the
foregoing, the Trustee may, if it shall be unwilling to so act, or shall, if it
is prohibited by applicable law from making Advances pursuant to Article VI or
if it is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any Successor Master Servicer
shall (i) be an institution that is a Fannie Mae and Freddie Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000
and (ii) be willing to act as successor servicer of any Mortgage Loans under
this Agreement or the related Servicing Agreement with respect to which the
Company or the original Servicer has been terminated as servicer, and shall have
executed and delivered 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 any liabilities of the Master Servicer hereof
incurred prior to termination of the Master Servicer under Section 9.01 or as
otherwise set forth herein), with like effect as if originally named as a party
to this Agreement, provided that each Rating Agency shall have acknowledged in
writing that its rating of the Certificates in effect immediately prior to such
assignment and delegation will not be qualified or reduced as a result of such
assignment and delegation. If the Trustee assumes the duties and
responsibilities of the Master Servicer in accordance with this Section 9.02,
the Trustee shall not resign as Master Servicer until a Successor Master
Servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section 4.04
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 or otherwise as
it and such successor shall agree; provided that no such compensation unless
agreed to by the Certificateholders shall be in excess of that permitted the
Master Servicer hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other Successor Master

                                     -127-
<PAGE>

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 and the Securities Administrator to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.

                  The costs and expenses of the Trustee in connection with the
termination of the Master Servicer, appointment of a Successor Master Servicer
and, if applicable, any transfer of servicing, including, without limitation,
all costs and expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee or the Successor Master
Servicer to service the related Mortgage Loans properly and effectively, to the
extent not paid by the terminated Master Servicer, shall be payable to the
Trustee pursuant to Section 10.05. Any successor to the Master Servicer as
successor servicer under any Subservicing Agreement shall give notice to the
applicable Mortgagors of such change of servicer and shall, during the term of
its service as successor servicer maintain in force the policy or policies that
the Master Servicer is required to maintain pursuant to Section 4.04.

         Section 9.03      NOTIFICATION TO CERTIFICATEHOLDERS.

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

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

         Section 9.04      WAIVER OF DEFAULTS.

                  The Trustee shall transmit by mail to all Certificateholders,
within 60 days after the occurrence of any Event of Default actually known to a
Responsible Officer of the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing not less than 51% of the Voting Rights may,
on behalf of all Certificateholders, waive any default by the Master Servicer in
the performance of its obligations hereunder and the consequences thereof,
except a default in the making of or the causing to be made of any required
distribution on the Certificates. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.

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<PAGE>

         Section 9.05      COMPANY DEFAULT.

                  In case one or more of the following events of default by the
Company (each, a "Company Default") shall occur and be continuing, that is to
say:

                  (i) any failure by the Company to remit to the Master Servicer
any payment required to be made under the terms of this Agreement on any
Remittance Date; or

                  (ii) failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or agreements (other
than Sections 3.13 or 3.14) on the part of the Company set forth in this
Agreement, the breach of which has a material adverse effect and which continue
unremedied for a period of sixty days (except that such number of days shall be
fifteen in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement and such failure shall be deemed
to have a material adverse effect) after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Company by the Master Servicer; or

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

                  (iv) the Company shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Company or of or relating to all or
substantially all of its property; or

                  (v) the Company shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or

                  (vi) the Company attempts to assign its right to servicing
compensation hereunder or the Company attempts to sell or otherwise dispose of
all or substantially all of its property or assets or to assign this Agreement
or the servicing responsibilities hereunder or to delegate its duties hereunder
or any portion thereof except as otherwise permitted herein; or

                  (vii) the Company ceases to be qualified to transact business
in any jurisdiction where it is currently so qualified, but only to the extent
such non-qualification materially and adversely affects the Company's ability to
perform its obligations hereunder;

                  (viii) failure by the Company to duly perform, within the
required time period,

                                     -129-
<PAGE>

its obligations under Section 3.13 or Section 3.14 which failure continues
unremedied for a period of fifteen (15) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Company by the Master Servicer.

         then, and in each and every such case, so long as a Company Default
shall not have been remedied, the Master Servicer, by notice in writing to the
Company may, in addition to whatever rights the Master Servicer and the Trustee
on behalf of the Certificateholders may have under Section 8.03 and at law or
equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Company under this Agreement and
in and to the EMC Mortgage Loans and the proceeds thereof without compensating
the Company for the same. On or after the receipt by the Company of such written
notice, all authority and power of Company under this Agreement, whether with
respect to the EMC Mortgage Loans or otherwise, shall pass to and be vested in
the Master Servicer. Upon written request from the Master Servicer, the Company
shall prepare, execute and deliver, any and all documents and other instruments,
place in the Master Servicer's possession all Mortgage Files relating to the EMC
Mortgage Loans, and 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 EMC Mortgage Loans
and related documents, or otherwise, at the Company's sole expense. The Company
agrees to cooperate with the Master Servicer in effecting the termination of the
Company's responsibilities and rights hereunder, including, without limitation,
the transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Company to its Protected Account or
Escrow Account or thereafter received with respect to the EMC Mortgage Loans or
any related REO Property.

         Section 9.06      WAIVER OF COMPANY DEFAULTS.

         The Master Servicer, with the consent of the Trustee, may waive only by
written notice any default by the Company in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Company Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived in writing.

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<PAGE>

                                    ARTICLE X

             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

         Section 10.01     DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.

                  (a) The Trustee, prior to the occurrence of an Event of
Default and after the curing or waiver of all Events of Default which may have
occurred, and the Securities Administrator each undertake to perform such duties
and only such duties as are specifically set forth in this Agreement as duties
of the Trustee and the Securities Administrator, respectively. If an Event of
Default has occurred and has not been cured or waived, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and the
same degree of care and skill in their exercise, as a prudent person would
exercise under the circumstances in the conduct of such Person's own affairs.

                  (b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee or the Securities Administrator pursuant
to any provision of this Agreement, the Trustee or the Securities Administrator,
respectively, shall examine them to determine whether they are, on their face,
in the form required by this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Master Servicer; provided, further,
that neither the Trustee nor the Securities Administrator shall be responsible
for the accuracy or verification of any calculation provided to it pursuant to
this Agreement.

                  (c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.04 and 11.01 herein based
solely on the applicable Remittance Report.

                  (d) No provision of this Agreement shall be construed to
relieve the Trustee or the Securities Administrator from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that:

                  (i) Prior to the occurrence of an Event of Default, and after
         the curing or waiver of all such Events of Default which may have
         occurred with respect to the Trustee and at all times with respect to
         the Securities Administrator, the duties and obligations of the Trustee
         and the Securities Administrator shall be determined solely by the
         express provisions of this Agreement, neither the Trustee nor the
         Securities Administrator shall be liable except for the performance of
         their respective duties and obligations as are specifically set forth
         in this Agreement, no implied covenants or obligations shall be read
         into this Agreement against the Trustee or the Securities Administrator
         and, in the absence of bad faith on the part of the Trustee or the
         Securities Administrator, respectively, the Trustee or the Securities
         Administrator, respectively, may conclusively rely, as to the truth of
         the statements and the correctness of the opinions expressed

                                     -131-
<PAGE>

         therein, upon any certificates or opinions furnished to the Trustee or
         the Securities Administrator, respectively, and conforming to the
         requirements of this Agreement;

                  (ii) Neither the Trustee nor the Securities Administrator
         shall be liable in its individual capacity for an error of judgment
         made in good faith by a Responsible Officer or Responsible Officers of
         the Trustee or an officer or officers of the Securities Administrator,
         respectively, unless it shall be proved that the Trustee or the
         Securities Administrator, respectively, was negligent in ascertaining
         the pertinent facts;

                  (iii) Neither the Trustee nor the Securities Administrator
         shall be liable with respect to any action taken, suffered or omitted
         to be taken by it in good faith in accordance with the directions of
         the Holders of Certificates evidencing not less than 25% of the
         aggregate Voting Rights of the Certificates, if such action or
         non-action relates to the time, method and place of conducting any
         proceeding for any remedy available to the Trustee or the Securities
         Administrator, respectively, or exercising any trust or other power
         conferred upon the Trustee or the Securities Administrator,
         respectively, under this Agreement;

                  (iv) The Trustee shall not be required to take notice or be
         deemed to have notice or knowledge of any default or Event of Default
         unless a Responsible Officer of the Trustee shall have actual knowledge
         thereof. In the absence of such notice, the Trustee may conclusively
         assume there is no such default or Event of Default;

                  (v) The Trustee shall not in any way be liable by reason of
         any insufficiency in any Account held by or in the name of Trustee
         unless it is determined by a court of competent jurisdiction in a
         non-appealable judgment that the Trustee's gross negligence or willful
         misconduct was the primary cause of such insufficiency (except to the
         extent that the Trustee is obligor and has defaulted thereon);

                  (vi) Anything in this Agreement to the contrary
         notwithstanding, in no event shall the Trustee or the Securities
         Administrator be liable for special, indirect or consequential loss or
         damage of any kind whatsoever (including but not limited to lost
         profits), even if the Trustee or the Securities Administrator,
         respectively, has been advised of the likelihood of such loss or damage
         and regardless of the form of action; and

                  (vii) None of the Securities Administrator, the Master
         Servicer, the Seller, the Depositor or the Trustee shall be responsible
         for the acts or omissions of the other, it being understood that this
         Agreement shall not be construed to render them partners, joint
         venturers or agents of one another.

Neither the Trustee nor the Securities Administrator shall be required to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the

                                     -132-
<PAGE>

provisions contained in this Agreement shall in any event require the Trustee or
the Securities Administrator to perform, or be responsible for the manner of
performance of, any of the obligations of the Master Servicer or the Company
hereunder or any Servicer under the related Servicing Agreement.

                  (e) All funds received by the Trustee and required to be
deposited in the Distribution Account pursuant to this Agreement will be
promptly so deposited by the Trustee.

         Section 10.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE SECURITIES
                      ADMINISTRATOR.

                  (a) Except as otherwise provided in Section 10.01:

                  (i) The Trustee and the Securities Administrator may rely and
         shall be protected in acting or refraining from acting in reliance on
         any resolution or certificate of the Seller, the Company, the Master
         Servicer or the related Servicer, any certificates 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 and the Securities Administrator may consult
         with counsel and any advice of such counsel or any Opinion of Counsel
         shall be full and complete authorization and protection with respect to
         any action taken or suffered or omitted by it hereunder in good faith
         and in accordance with such advice or Opinion of Counsel;

                  (iii) Neither the Trustee nor the Securities Administrator
         shall be under any obligation to exercise any of the trusts or powers
         vested in it by this Agreement, other than its obligation to give
         notices pursuant to this Agreement, or to institute, conduct or defend
         any litigation hereunder or in relation hereto at the request, order or
         direction of any of the Certificateholders pursuant to the provisions
         of this Agreement, unless such Certificateholders shall have offered to
         the Trustee or the Securities Administrator, as applicable, reasonable
         security or indemnity against the costs, expenses and liabilities which
         may be incurred therein or thereby. Nothing contained herein shall,
         however, relieve the Trustee of the obligation, upon the occurrence of
         an Event of Default of which a Responsible Officer of the Trustee has
         actual knowledge (which has not been cured or waived), to exercise such
         of the rights and powers vested in it by this Agreement, and to use the
         same degree of care and skill in their exercise, as a prudent person
         would exercise under the circumstances in the conduct of his own
         affairs;

                  (iv) Prior to the occurrence of an Event of Default hereunder
         and after the curing or waiver of all Events of Default which may have
         occurred with respect to the Trustee and at all times with respect to
         the Securities Administrator, neither the Trustee nor the Securities
         Administrator shall be liable in its individual capacity for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                                     -133-
<PAGE>

                  (v) Neither the Trustee nor the Securities Administrator shall
         be bound to make any investigation into the facts or matters stated in
         any resolution, certificate, statement, instrument, opinion, report,
         notice, request, consent, order, approval, bond or other paper or
         document, unless requested in writing to do so by Holders of
         Certificates evidencing not less than 25% of the aggregate Voting
         Rights of the Certificates and provided that the payment within a
         reasonable time to the Trustee or the Securities Administrator, as
         applicable, of the costs, expenses or liabilities likely to be incurred
         by it in the making of such investigation is, in the opinion of the
         Trustee or the Securities Administrator, as applicable, reasonably
         assured to the Trustee or the Securities Administrator, as applicable,
         by the security afforded to it by the terms of this Agreement. The
         Trustee or the Securities Administrator may require reasonable
         indemnity against such expense or liability as a condition to taking
         any such action. The reasonable expense of every such examination shall
         be paid by the Certificateholders requesting the investigation;

                  (vi) The Trustee and the Securities Administrator may execute
         any of the trusts or powers hereunder or perform any duties hereunder
         either directly or through Affiliates, agents or attorneys; provided,
         however, that the Trustee may not appoint any paying agent other than
         the Securities Administrator to perform any paying agent functions
         under this Agreement without the express written consent of the Master
         Servicer, which consent will not be unreasonably withheld. Neither the
         Trustee nor the Securities Administrator shall be liable or responsible
         for the misconduct or negligence of any of the Trustee's or the
         Securities Administrator's agents or attorneys or paying agent
         appointed hereunder by the Trustee or the Securities Administrator with
         due care and, when required, with the consent of the Master Servicer;

                  (vii) Should the Trustee or the Securities Administrator deem
         the nature of any action required on its part to be unclear, the
         Trustee or the Securities Administrator, respectively, may require
         prior to such action that it be provided by the Depositor with
         reasonable further instructions; the right of the Trustee or the
         Securities Administrator to perform any discretionary act enumerated in
         this Agreement shall not be construed as a duty, and neither the
         Trustee nor the Securities Administrator shall be accountable for other
         than its negligence or willful misconduct in the performance of any
         such act;

                  (viii) Neither the Trustee nor the Securities Administrator
         shall be required to give any bond or surety with respect to the
         execution of the trust created hereby or the powers granted hereunder,
         except as provided in Subsection 10.07; and

                  (ix) Neither the Trustee nor the Securities Administrator
         shall have any duty to conduct any affirmative investigation as to the
         occurrence of any condition requiring the repurchase of any Mortgage
         Loan by any Person pursuant to this Agreement, or the eligibility of
         any Mortgage Loan for purposes of this Agreement.

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         Section 10.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
                       CERTIFICATES OR MORTGAGE LOANS.

                  The recitals contained herein and in the Certificates (other
than the signature and countersignature of the Trustee on the Certificates)
shall be taken as the statements of the Depositor, and neither the Trustee nor
the Securities Administrator shall have any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representation as to the validity or sufficiency of the Certificates (other than
the signature and countersignature of the Trustee on the Certificates) or of any
Mortgage Loan except as expressly provided in Sections 2.02 and 2.06 hereof;
provided, however, that the foregoing shall not relieve the Trustee, or the
Custodian on its behalf, of the obligation to review the Mortgage Files pursuant
to Section 2.02 of this Agreement. The Trustee's signature and countersignature
(or countersignature of its agent) on the Certificates shall be solely in its
capacity as Trustee and shall not constitute the Certificates an obligation of
the Trustee in any other capacity. Neither the Trustee or the Securities
Administrator shall be accountable for the use or application by the Depositor
of any of the Certificates or of the proceeds of such Certificates, or for the
use or application of any funds paid to the Depositor with respect to the
Mortgage Loans. Subject to Section 2.06, neither the Trustee nor the Securities
Administrator shall be responsible for the legality or validity of this
Agreement or any document or instrument relating to this Agreement, the validity
of the execution of this Agreement or of any supplement hereto or instrument of
further assurance, or the validity, priority, perfection or sufficiency of the
security for the Certificates issued hereunder or intended to be issued
hereunder. Neither the Trustee nor the Securities Administrator shall at any
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage or any Mortgage Loan, or the
perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Fund or its ability to generate the payments to be distributed to
Certificateholders, under this Agreement. Neither the Trustee nor the Securities
Administrator shall have any responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement.

         Section 10.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN
                       CERTIFICATES.

                  Each of the Trustee and the Securities Administrator in its
individual capacity or in any capacity other than as Trustee or Securities
Administrator hereunder may become the owner or pledgee of any Certificates with
the same rights it would have if it were not the Trustee or the Securities
Administrator, as applicable, and may otherwise deal with the parties hereto.

         Section 10.05 TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND
                       EXPENSES.

                  The fees and expenses of the Trustee and the Securities
Administrator shall be paid in accordance with a side letter agreement with the
Master Servicer and at the expense of the Master Servicer. In addition, the
Trustee and the Securities Administrator will be entitled to recover from the
Master Servicer Collection Account pursuant to Section 5.06 all reasonable
out-of-pocket expenses, disbursements and advances and the expenses of the
Trustee and the Securities Administrator,

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respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence or intentional misconduct or which is the responsibility of the
Certificateholders or the Trust Fund hereunder. If funds in the Master Servicer
Collection Account are insufficient therefor, the Trustee and the Securities
Administrator shall recover such expenses, disbursements or advances from the
Depositor and the Depositor hereby agrees to pay such expenses, disbursements or
advances upon demand. Such compensation and reimbursement obligation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust.

         Section 10.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
                       ADMINISTRATOR.

                  The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of a state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by Fitch Ratings with respect to their
long-term rating and rated "BBB" or higher by Standard & Poor's and "Baa2" or
higher by Moody's with respect to any outstanding long-term unsecured
unsubordinated debt, and, in the case of a successor Trustee or successor
Securities Administrator other than pursuant to Section 10.10, rated in one of
the two highest long-term debt categories of, or otherwise acceptable to, each
of the Rating Agencies. The Trustee shall not be an Affiliate of the Master
Servicer. If the Trustee publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 10.06 the combined capital and
surplus of such corporation shall be deemed to be its total equity capital
(combined capital and surplus) as set forth in its most recent report of
condition so published. In case at any time the Trustee or the Securities
Administrator, as applicable, shall cease to be eligible in accordance with the
provisions of this Section 10.06, the Trustee or the Securities Administrator
shall resign immediately in the manner and with the effect specified in Section
10.08.

         Section 10.07 INSURANCE.

                  The Trustee and the Securities Administrator, at their own
expense, shall at all times maintain and keep in full force and effect: (i)
fidelity insurance, (ii) theft of documents insurance and (iii) forgery
insurance (which may be collectively satisfied by a "Financial Institution Bond"
and/or a "Bankers' Blanket Bond"). All such insurance shall be in amounts, with
standard coverage and subject to deductibles, as are customary for insurance
typically maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Trustee or the

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<PAGE>

Securities Administrator as to the Trustee's or the Securities Administrator's,
respectively, compliance with this Section 10.07 shall be furnished to any
Certificateholder upon reasonable written request.

         Section 10.08 RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES
                       ADMINISTRATOR.

                  The Trustee and the Securities Administrator may at any time
resign (including, in the case of the Securities Administrator, in connection
with the resignation or termination of the Master Servicer) and be discharged
from the Trust hereby created by giving written notice thereof to the Depositor,
the Seller, the Securities Administrator (or the Trustee, if the Securities
Administrator resigns) and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee or successor securities administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning trustee or securities administrator,
as applicable, and the successor trustee or securities administrator, as
applicable. If no successor trustee or successor securities administrator shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee or Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor trustee or securities administrator.

                  If at any time (i) the Trustee or the Securities Administrator
shall cease to be eligible in accordance with the provisions of Section 10.06
hereof and shall fail to resign after written request thereto by the Depositor,
(ii) the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or the Securities Administrator or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the Trustee or the Securities
Administrator or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee or securities administrator
and (C) the Trustee or the Securities Administrator, as applicable fails to
indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee or the Securities Administrator, as applicable,
and appoint a successor trustee or successor securities administrator, as
applicable, by written instrument, in multiple copies, a copy of which
instrument shall be delivered to the Trustee, the Securities Administrator, each
Master Servicer and the successor trustee or successor securities administrator,
as applicable.

                  The Holders evidencing at least 51% of the Voting Rights of
each Class of Certificates may at any time remove the Trustee or Securities
Administrator and appoint a successor trustee or securities administrator by
written instrument or instruments, in multiple copies, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered by the successor trustee or successor securities
administrator to each of the Master Servicer, the Trustee or Securities
Administrator so removed and the successor trustee or securities administrator
so appointed. Notice of any removal of the Trustee or Securities Administrator
shall be given to each Rating Agency by the Trustee or successor trustee.

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<PAGE>

                  Any resignation or removal of the Trustee or Securities
Administrator and appointment of a successor trustee or securities administrator
pursuant to any of the provisions of this Section 10.08 shall become effective
upon acceptance of appointment by the successor trustee or securities
administrator as provided in Section 10.09 hereof.

         Section 10.09 SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.

                  Any successor trustee or securities administrator appointed as
provided in Section 10.08 hereof shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or predecessor securities
administrator, as applicable, and the Master Servicer an instrument accepting
such appointment hereunder and thereupon the resignation or removal of the
predecessor trustee or securities administrator shall become effective and such
successor trustee or securities administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee or securities administrator herein.

                  No successor trustee or securities administrator shall accept
appointment as provided in this Section 10.09 unless at the time of such
acceptance such successor trustee or securities administrator shall be eligible
under the provisions of Section 10.07 hereof and its appointment shall not
adversely affect the then current rating of the Certificates.

                  Upon acceptance of appointment by a successor trustee or
securities administrator as provided in this Section 10.09, the successor
trustee or securities administrator shall mail notice of the succession of such
trustee or securities administrator hereunder to all Holders of Certificates. If
the successor trustee or securities administrator fails to mail such notice
within ten days after acceptance of appointment, the Depositor shall cause such
notice to be mailed at the expense of the Trust Fund.

         Section 10.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
                       ADMINISTRATOR.

                  Any corporation, state bank or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any corporation, state bank or
national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator shall be a
party, or any corporation, state bank or national banking association succeeding
to substantially all of the corporate trust business of the Trustee or of the
business of the Securities Administrator, shall be the successor of the Trustee
or the Securities Administrator hereunder, provided that such corporation shall
be eligible under the provisions of Section 10.06 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 10.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

                  Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property

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<PAGE>

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 10.11, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 10.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 10.09.

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

                  (i) All rights, powers, duties and obligations conferred or
         imposed upon the Trustee, except for the obligation of the Trustee
         under this Agreement to advance funds on behalf of the Master Servicer,
         shall be conferred or imposed upon and exercised or performed by the
         Trustee and such separate trustee or co-trustee jointly (it being
         understood that such separate trustee or co-trustee is not authorized
         to act separately without the Trustee joining in such act), except to
         the extent that under any law of any jurisdiction in which any
         particular act or acts are to be performed (whether a Trustee hereunder
         or as a Successor Master Servicer hereunder), the Trustee shall be
         incompetent or unqualified to perform such act or acts, in which event
         such rights, powers, duties and obligations (including the holding of
         title to the Trust Fund or any portion thereof in any such
         jurisdiction) shall be exercised and performed singly by such separate
         trustee or co- trustee, but solely at the direction of the Trustee;

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

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

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article X. 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

                                     -139-
<PAGE>

the liability of, or affording protection to, the Trustee. Every such instrument
shall be filed with the Trustee and a copy thereof given to the Master Servicer
and the Depositor.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co- trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

         Section 10.12 TAX MATTERS.

                  It is intended that the Trust Fund shall constitute, and that
the affairs of the Trust Fund shall be conducted so that each REMIC formed
hereunder qualifies as, a "real estate mortgage investment conduit" as defined
in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Securities Administrator covenants and agrees that it shall act
as agent for so long as it is also Master Servicer (and the Securities
Administrator is hereby appointed to act as agent) on behalf of the Trust Fund.
The Trustee and/or the Securities Administrator, as agent on behalf of the Trust
Fund, shall do or refrain from doing, as applicable, the following: (a) the
Securities Administrator shall prepare and file, or cause to be prepared and
filed, in a timely manner, U.S. Real Estate Mortgage Investment Conduit Income
Tax Returns (Form 1066 or any successor form adopted by the Internal Revenue
Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to each such REMIC
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
the Securities Administrator shall apply for an employer identification number
with the Internal Revenue Service via a Form SS-4 or other comparable method for
each REMIC that is or becomes a taxable entity, and within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue Service,
on Forms 8811 or as otherwise may be required by the Code, the name, title,
address, and telephone number of the person that the holders of the Certificates
may contact for tax information relating thereto, together with such additional
information as may be required by such Form, and update such information at the
time or times in the manner required by the Code for the Trust Fund; (c) the
Trustee shall make or cause to be made elections, on behalf of each REMIC formed
hereunder to be treated as a REMIC on the federal tax return of such REMIC for
its first taxable year (and, if necessary, under applicable state law); (d) the
Securities Administrator shall prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and to the Internal Revenue Service and, if
necessary, state tax authorities, all information returns and reports as and
when required to be provided to them in accordance with the REMIC Provisions,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption; (e) the Securities Administrator shall provide
information necessary for the computation of tax imposed on the transfer of a
Residual Certificate to a Person that is not a Permitted Transferee, or an agent
(including a broker, nominee or other middleman) of a Person that is not a

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<PAGE>

Permitted Transferee, or a pass-through entity in which a Person that is not a
Permitted Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) each of the Securities Administrator and the Trustee shall,
to the extent under its control, conduct the affairs of the Trust Fund at all
times that any Certificates are outstanding so as to maintain the status of each
REMIC formed hereunder as a REMIC under the REMIC Provisions; (g) neither the
Trustee nor the Securities Administrator shall knowingly or intentionally take
any action or omit to take any action that would cause the termination of the
REMIC status of any REMIC formed hereunder; (h) the Trustee shall pay, from the
sources specified in the penultimate paragraph of this Section 10.12, as
directed by the Securities Administrator in its Remittance Report, the amount of
any federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on any REMIC formed hereunder prior to the termination
of the Trust Fund when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee, the Securities Administrator at the
written request of the Trustee, or any other appropriate Person from contesting
any such tax in appropriate proceedings and shall not prevent the Securities
Administrator from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) the Trustee shall sign or cause to be
signed federal, state or local income tax or information returns or any other
document prepared by the Securities Administrator pursuant to this Section 10.12
requiring a signature thereon by the Trustee; (j) the Securities Administrator
shall maintain records relating to each REMIC formed hereunder including but not
limited to the income, expenses, assets and liabilities of each such REMIC and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; (k) the Securities Administrator shall,
for federal income tax purposes, maintain books and records with respect to the
REMICs on a calendar year and on an accrual basis; (l) neither the Trustee nor
the Master Servicer shall enter into any arrangement not otherwise provided for
in this Agreement by which the REMICs will receive a fee or other compensation
for services nor permit the REMICs to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code; and (m) as and when
necessary and appropriate, the Trustee, or at the written request of the
Trustee, the Securities Administrator, shall represent the Trust Fund in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving any such REMIC.

                  In order to enable each of the Trustee and the Securities
Administrator to perform its duties as set forth herein, the Depositor shall
provide, or cause to be provided, to the Trustee or the Securities Administrator
within 10 days after the Closing Date all information or data that the Trustee
or the Securities Administrator 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 or the Securities
Administrator promptly upon written request therefor, any such additional
information or data that the Trustee or the Securities

                                     -141-
<PAGE>

Administrator may, from time to time, request in order to enable the Trustee or
the Securities Administrator to perform its duties as set forth herein. The
Depositor hereby indemnifies each of Trustee and the Securities Administrator
for any losses, liabilities, damages, claims or expenses of the Trustee or the
Securities Administrator arising from any errors or miscalculations of the
Trustee or the Securities Administrator, as applicable, that result from any
failure of the Depositor to provide, or to cause to be provided, accurate
information or data to the Trustee or the Securities Administrator, as
applicable, on a timely basis.

                  In the event that any tax is imposed on "prohibited
transactions" of any of REMIC I, REMIC II or REMIC III as defined in Section
860F(a)(2) of the Code, on the "net income from foreclosure property" of the
Trust Fund as defined in Section 860G(c) of the Code, on any contribution to any
of REMIC I, REMIC II or REMIC III after the startup day pursuant to Section
860G(d) of the Code, or any other tax is imposed, including, without limitation,
any federal, state or local tax or minimum tax imposed upon any of REMIC I,
REMIC II or REMIC III, and is not paid as otherwise provided for herein, such
tax shall be paid by (i) the Trustee or the Securities Administrator, if any
such other tax arises out of or results from a breach by the Trustee or the
Securities Administrator, respectively, of any of its obligations under this
Agreement, (ii) any party hereto (other than the Trustee or the Securities
Administrator) to the extent any such other tax arises out of or results from a
breach by such other party of any of its obligations under this Agreement or
(iii) in all other cases, or in the event that any liable party hereto fails to
honor its obligations under the preceding clauses (i) or (ii), any such tax will
be paid first with amounts otherwise to be distributed to the Class R
Certificateholders, and second with amounts otherwise to be distributed to all
other Certificateholders in the following order of priority: first, to the Class
B Certificates, second, to the Class M-2 Certificates, third, to the Class M-1
Certificates, and fourth, to the Senior Certificates, on a pro rata basis, based
on the amounts to be distributed. Notwithstanding anything to the contrary
contained herein, to the extent that such tax is payable by the Holder of any
Certificates, the Trustee is hereby authorized to retain on any Distribution
Date, from the Holders of the Class R Certificates (and, if necessary, second,
from the Holders of the other Certificates in the priority specified in the
preceding sentence), funds otherwise distributable to such Holders in an amount
sufficient to pay such tax. Following written notification to the Securities
Administrator by the Trustee of any amount payable out of distributions to the
Certificateholders pursuant to the preceding two sentences, the Securities
Administrator shall include in its Remittance Report instructions as to
distributions to such parties taking into account the priorities described in
the second preceding sentence. The Securities Administrator, on written request
by 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 and the Securities Administrator each agree that,
in the event it should obtain any information necessary for the other party to
perform its obligations pursuant to this Section 10.12, it will promptly notify
and provide such information to such other party. Notwithstanding anything in
this Agreement to the contrary, the Trustee agrees that, in the event that the
Trustee obtains actual knowledge that the Securities Administrator has breached
any of its obligations pursuant to this Section 10.12, the Trustee shall perform
such obligations on its behalf to the extent that the Trustee

                                     -142-
<PAGE>

possesses all documents necessary to so perform and receives reasonable
compensation therefor, provided, however, that the Trustee shall not be liable
for any losses resulting from any such breach.

                                     -143-
<PAGE>

                                   ARTICLE XI

                                   TERMINATION

         Section 11.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL
                       MORTGAGE LOANS.

                  Subject to Section 11.03, the obligations and responsibilities
of the Depositor, the Master Servicer, the Securities Administrator, the Seller
and the Trustee created hereby with respect to the Trust Fund shall terminate
upon the earlier of (a) the purchase by the Majority Class C Certificateholder
of all of the Mortgage Loans (and REO Properties) remaining in the Trust Fund at
a price (the "Mortgage Loan Purchase Price") equal to the sum of (i) 100% of the
Stated Principal Balance of each Mortgage Loan (other than in respect of REO
Property), (ii) accrued interest thereon at the applicable Mortgage Rate to, but
not including, the first day of the month of such purchase, (iii) the appraised
value of any REO Property in the Trust Fund (up to the Stated Principal Balance
of the related Mortgage Loan), such appraisal to be conducted by an appraiser
mutually agreed upon by the Master Servicer and the Trustee and (iv)
unreimbursed out-of pocket costs of the Company, the Servicers or the Master
Servicer, including unreimbursed servicing advances and the principal portion of
any unreimbursed Advances, made on the Mortgage Loans prior to the exercise of
such repurchase right and (v) any unreimbursed costs and expenses of the Trustee
and the Securities Administrator payable pursuant to Section 10.05 and (b) the
later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor of
the descendants of Joseph P. Kennedy, the late Ambassador of the United States
to the Court of St. James, living on the date hereof and (ii) the Latest
Possible Maturity Date.

                  The right to repurchase all Mortgage Loans and REO Properties
pursuant to clause (a) in the preceding paragraph shall be exercisable on or
after the earlier of (i) the 20% Clean-Up Call Date and (ii) the Distribution
Date in July 2014.

         Section 11.02 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 Master Servicer Collection
Account, the Master Servicer shall direct the Securities Administrator to send a
final distribution notice promptly to each Certificateholder or (ii) the
Securities Administrator determines that a Class of Certificates shall be
retired after a final distribution on such Class, the Securities Administrator
shall notify the Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the related Certificates at
the office of the Trustee specified in the final distribution notice to
Certificateholders. If

                                     -144-
<PAGE>

the Class C Certificateholder elects to terminate the Trust Fund pursuant to
Section 11.01, at least 20 days prior to the date notice is to be mailed to the
Certificateholders, the Majority Class C Certificateholder shall notify the
Depositor, the Securities Administrator, the Trustee of the date the Majority
Class C Certificateholder intends to terminate the Trust Fund. The Master
Servicer shall remit the Mortgage Loan Purchase Price to the Trustee on the
Business Day prior to the Distribution Date for such Optional Termination by the
Majority Class C Certificateholder.

                  Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Securities Administrator by letter to Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the amount of such final distribution, (c) the
location of the office or agency at which such presentation and surrender must
be made and (d) that the Record Date otherwise applicable to such Distribution
Date is not applicable, distributions being made only upon presentation and
surrender of the Certificates at the office therein specified. The Securities
Administrator will give such notice to each Rating Agency at the time such
notice is given to Certificateholders.

                  In the event such notice is given, the Master Servicer shall
cause all funds in the Master Servicer Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee or the Custodian shall promptly release to the Master Servicer, as
applicable the Mortgage Files for the Mortgage Loans and the Trustee shall
execute and deliver any documents prepared and delivered to it which are
necessary to transfer any REO Property.

                  Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders of each Class in
accordance with the Remittance Report the amounts allocable to such Certificates
held in the Distribution Account in the order and priority set forth in Section
6.04 hereof on the final Distribution Date and in proportion to their respective
Percentage Interests.

                  In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered

                                     -145-
<PAGE>

for cancellation, the Class R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Trust Fund that remain subject hereto.

         Section 11.03 ADDITIONAL TERMINATION REQUIREMENTS.

                  (a) Upon exercise by the Majority Class C Certificateholder of
its purchase option as provided in Section 11.01, the Trust Fund shall be
terminated in accordance with the following additional requirements, unless each
of the Trustee and the Securities Administrator have been supplied with an
Opinion of Counsel addressed to the Trustee, at the expense of the Majority
Class C Certificateholder, to the effect that the failure of the Trust Fund to
comply with the requirements of this Section 11.03 will not (i) result in the
imposition of taxes on "prohibited transactions" of a REMIC, or (ii) cause a
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding:

                  (1) The Majority Class C Certificateholder shall establish a
90-day liquidation period and notify the Trustee and Securities Administrator
thereof, and the Securities Administrator shall in turn specify the first day of
such period in a statement attached to the tax return for each of REMIC I, REMIC
II and REMIC III pursuant to Treasury Regulation Section 1.860F-1. The Majority
Class C Certificateholder shall satisfy all the requirements of a qualified
liquidation under Section 860F of the Code and any regulations thereunder, as
evidenced by an Opinion of Counsel addressed to the Trustee obtained at the
expense of the Majority Class C Certificateholder;

                  (2) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Securities
Administrator as agent of the Trustee shall sell all of the assets of REMIC I,
REMIC II and REMIC III for cash; and

                  (3) At the time of the making of the final payment on the
Certificates, the Securities Administrator as agent for the Trustee shall
distribute or credit, or cause to be distributed or credited, to the Holders of
the Residual Certificates all cash on hand (other than cash retained to meet
claims), and REMIC I shall terminate at that time.

                  (b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the adoption of a 90-day liquidation period for REMIC
I, REMIC II and REMIC III, which authorization shall be binding upon all
successor Certificateholders.

                  (c) The Securities Administrator as agent for each REMIC
hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of the Majority Class C Certificateholder, and the receipt of
the Opinion of Counsel referred to in Section 11.03(a)(1) and to take such other
action in connection therewith as may be reasonably requested by the Majority
Class C Certificateholder.

                                     -146-
<PAGE>

                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

         Section 12.01     AMENDMENT.

                  This Agreement may be amended from time to time by parties
hereto, without the consent of any of the Certificateholders to cure any
ambiguity, to correct or supplement any provisions herein (including to give
effect to the expectations of investors), to change the manner in which the
Master Servicer Collection Account maintained by the Master Servicer or the
Protected Account maintained by the Company is maintained or to make such other
provisions with respect to matters or questions arising under this Agreement as
shall not be inconsistent with any other provisions herein if such action shall
not, as evidenced by an Opinion of Counsel addressed to the Trustee, adversely
affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates.

                  Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of each of REMIC I, REMIC II and REMIC III as a REMIC under the Code or to avoid
or minimize the risk of the imposition of any tax on any of REMIC I, REMIC II or
REMIC III pursuant to the Code that would be a claim against any of REMIC I,
REMIC II or REMIC III at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel
addressed to the Trustee, which opinion shall be an expense of the party
requesting such opinion but in any case shall not be an expense of the Trustee,
the Securities Administrator or the Trust Fund, to the effect that such action
is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.

                  This Agreement may also be amended from time to time by the
parties hereto and the Holders of each Class of Certificates affected thereby
evidencing over 50% of the Voting Rights of such Class or Classes for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) cause any of REMIC I, REMIC II or REMIC III to cease to
qualify as a REMIC or (iii) reduce the aforesaid percentages of Certificates of
each Class the Holders of which are required to consent to any such amendment
without the consent of the Holders of all Certificates of such Class then
outstanding.

                                     -147-
<PAGE>

                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel addressed to the Trustee , which
opinion shall be an expense of the party requesting such amendment but in any
case shall not be an expense of the Trustee or the Securities Administrator, to
the effect that such amendment will not (other than an amendment pursuant to
clause (ii) of, and in accordance with, the preceding paragraph) cause the
imposition of any tax on REMIC I, REMIC II, REMIC III or the Certificateholders
or cause REMIC I, REMIC II or REMIC III to cease to qualify as a REMIC at any
time that any Certificates are outstanding. Further, nothing in this Agreement
shall require the Trustee to enter into an amendment without receiving an
Opinion of Counsel, satisfactory to the Trustee that (i) such amendment is
permitted and is not prohibited by this Agreement and that all requirements for
amending this Agreement (including any consent of the applicable
Certificateholders) have been complied with.

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

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

         Section 12.02     RECORDATION OF AGREEMENT; COUNTERPARTS.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all of the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere. The Master Servicer shall effect such
recordation at the Trust's expense upon the request in writing of a
Certificateholder, but only if such direction is accompanied by an Opinion of
Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.

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

         Section 12.03     GOVERNING LAW.

                  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK

                                     -148-
<PAGE>

APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAWS).

         Section 12.04     INTENTION OF PARTIES.

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

                  The Depositor for the benefit of the Certificateholders shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the assets of the Trust Fund, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Agreement.

         Section 12.05     NOTICES.

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

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

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

                                     -149-
<PAGE>

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

                  (iv) The repurchase or substitution of Mortgage Loans pursuant
         to Sections 2.02, 2.03, 4.21 and 11.01; and

                  (v) The final payment to Certificateholders.

                  (b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered at or mailed
by registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, or by facsimile transmission to a number provided by the
appropriate party if receipt of such transmission is confirmed to (i) in the
case of the Depositor, Bear Stearns Asset Backed Securities I LLC, 383 Madison
Avenue, New York, New York 10179, Attention: Chief Counsel; (ii) in the case of
the Seller or the Company, EMC Mortgage Corporation, 909 Hidden Ridge Drive,
Irving, Texas 75038, Attention: Ralene Ruyle or such other address as may be
hereafter furnished to the other parties hereto by the Master Servicer in
writing; (iv) in the case of the Trustee, at each Corporate Trust Office or such
other address as the Trustee may hereafter furnish to the other parties hereto;
(v) in the case of the Master Servicer or the Securities Administrator, P. O.
Box 98, Columbia, Maryland 21046 (or, for overnight deliveries, 9062 Old
Annapolis Road, Columbia, Maryland 21045), Attention: BSABS I 2004-AC4 or such
other address as may be hereafter furnished to the other parties hereto by the
Securities Administrator in writing and (vi) in the case of the Rating Agencies,
(x) Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007,
Attention: Home Equity Monitoring and (y) Standard & Poor's, 55 Water Street,
41st Floor, New York, New York 10041, Attention: Mortgage Surveillance Group.
Any notice delivered to the Seller, the Master Servicer, the Securities
Administrator or the Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Certificateholder,
unless otherwise provided herein, shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register; any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.

         Section 12.06     SEVERABILITY OF PROVISIONS.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

         Section 12.07     ASSIGNMENT.

                                     -150-
<PAGE>

                  Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 8.02, this Agreement may not be assigned
by the Master Servicer, the Seller or the Depositor.

         Section 12.08     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 or the
Securities Administrator, as appropriate, 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 or the
Securities Administrator, as appropriate to institute such action, suit or
proceeding in its own name as Trustee or the Securities Administrator, as
appropriate, hereunder and shall have offered to the Trustee or the Securities
Administrator, as appropriate, such reasonable indemnity as it may require
against the costs, expenses, and liabilities to be incurred therein or thereby,
and the Trustee or the Securities Administrator, as appropriate, 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 12.08, each
and every Certificateholder, the Trustee or the Securities Administrator shall
be entitled to such relief as can be given either at law or in equity.

         Section 12.09 INSPECTION AND AUDIT RIGHTS. The Master Servicer agrees
that, on reasonable prior notice, it will permit any representative of the
Depositor or the Trustee during the Master

                                     -151-
<PAGE>

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 or the
Trustee and to discuss its affairs, finances and accounts relating to such
Mortgage Loans with its officers, employees and independent public accountants
(and by this provision the Master Servicer hereby authorizes such accountants to
discuss with such representative such affairs, finances and accounts), all at
such reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor or the Trustee
of any right under this Section 12.09 shall be borne by the party requesting
such inspection, subject to such party's right to reimbursement hereunder (in
the case of the Trustee, pursuant to Section 10.05 hereof).

         Section 12.10     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.

                                   *   *   *

                                     -152-
<PAGE>

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

                                      BEAR STEARNS ASSET BACKED SECURITIES
                                      I LLC
                                               as Depositor

                                      By:    /s/ Baron Silverstein
                                         ---------------------------------------
                                      Name:  Baron Silverstein
                                      Title: Vice President

                                      EMC MORTGAGE CORPORATION,
                                               as Seller and Company

                                      By:    /s/ Dana Dillard
                                         ---------------------------------------
                                      Name:  Dana Dillard
                                      Title: Senior Vice President

                                      WELLS FARGO BANK, NATIONAL
                                      ASSOCIATION,
                                               as Securities Administrator and
                                               Master Servicer

                                      By:    /s/ Stacey Taylor
                                         ---------------------------------------
                                      Name:  Stacey Taylor
                                      Title: Assistant Vice President

                                      U.S.     BANK NATIONAL
                                               ASSOCIATION, as
                                               Trustee

                                      By:    /s/ Vaneta I. Bernard
                                         ---------------------------------------
                                      Name:  Vaneta I. Bernard
                                      Title: Vice President

<PAGE>

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

                  On this 30th day of July, 2004, before me, a notary public in
and for said State, appeared Baron Silverstein, personally known to me on the
basis of satisfactory evidence to be an authorized representative of Bear
Stearns Asset Backed Securities I LLC, one of the companies that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such limited liability company and acknowledged to me that such
limited liability company executed the within instrument.

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

                                                ______________________________
                                                Notary Public

[Notarial Seal]

<PAGE>

STATE OF MARYLAND       )
                        ) ss.:
COUNTY OF HOWARD        )

                  On this 30th day of July, 2004, before me, a notary public in
and for said State, appeared Stacey Taylor, personally known to me on the basis
of satisfactory evidence to be an authorized representative of Wells Fargo Bank,
National Association that executed the within instrument, and also known to me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such corporation executed the within instrument.

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

                                                ______________________________
                                                Notary Public

[Notarial Seal]

<PAGE>

STATE OF TEXAS         )
                       ) ss.:
COUNTY OF DALLAS       )

                  On this 30th day of July, 2004, before me, a notary public in
and for said State, appeared Dana Dillard, personally known to me on the basis
of satisfactory evidence to be an authorized representative of EMC Mortgage
Corporation, one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation
and acknowledged to me that such corporation executed the within instrument.

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

                                                ______________________________
                                                Notary Public

[Notarial Seal]

<PAGE>

STATE OF MASSACHUSETTS    )
                          ) ss.:
COUNTY OF SUFFOLK         )

                  On this 30th day of July, 2004, before me, a notary public in
and for said State, appeared Vaneta I. Bernard personally known to me on the
basis of satisfactory evidence to be an authorized representative of U.S. Bank
National Association that executed the within instrument, and also known to me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such corporation executed the within instrument.

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

                                                ______________________________
                                                Notary Public

[Notarial Seal]

<PAGE>

                                   EXHIBIT A-1

                 Form Of Class A-[1][2][3][4][5][6] Certificate

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  [FOR CLASS A-[1][2][3][4][5]]: THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE PRINCIPAL PAYMENTS HEREON.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

                                      A-1-1

<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No.1                                           Pass-Through Rate: ______%

Class A-[1][2][3][4][5][6] Senior

Date of Pooling and Servicing Agreement                    Aggregate Initial Certificate [Notional] [Principal]
and Cut-off Date:                                          Balance of this  Certificate as of the Cut-off Date:
July 1, 2004                                               $[_____________]

First Distribution Date:                                   Initial Certificate [Notional][Principal] Balance of
August 25, 2004                                            this
                                                           Certificate as of the Cut-off Date:
                                                           $[_____________]

Master Servicer:                                           CUSIP: ___________
Wells Fargo Bank, National Association

Assumed Final Distribution Date:
August 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-AC4

         evidencing a fractional undivided interest in the distributions
         allocable to the Class A-[1][2][3][4][5][6] Certificates with respect
         to a Trust Fund consisting primarily of a pool of conventional one- to
         four-family fixed interest rate mortgage loans sold by BEAR STEARNS
         ASSET BACKED SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Stearns Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Stearns Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.

                  This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Stearns Asset Backed Securities I LLC ("BSABS I"). The Mortgage
Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS I. Wells Fargo
Bank, National
                                      A-1-2
<PAGE>

Association will act as master servicer of the Mortgage Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among BSABS I, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and company, Wells Fargo Bank, National Association, as
Master Servicer and securities administrator (the "Securities Administrator")
and U.S. Bank National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  [For Class A-[1][2][3][4]]: Interest on this Certificate will
accrue during the month prior to the month in which a Distribution Date (as
hereinafter defined) occurs on the Certificate Principal Balance hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
day (or if such last day is not a Business Day, the Business Day immediately
preceding such last day) of the calendar month immediately preceding the month
in which the Distribution Date occurs, an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to the Holders of Certificates
of the same Class as this Certificate. The Assumed Final Distribution Date is
the Distribution Date in the month following the latest scheduled maturity date
of any Mortgage Loan and is not likely to be the date on which the Certificate
Principal Balance of this Class of Certificates will be reduced to zero. [For
Class A-5 Certificate]: Interest on this Certificate will accrue from and
including the 25th day of the calendar month preceding the month in which a
Distribution Date (as hereinafter defined) occurs to and including the 24th day
of the calendar month in which that Distribution Date occurs on the Certificate
Principal Balance hereof at a per annum rate equal to the Pass-Through Rate set
forth above. The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the Business Day immediately preceding such
Distribution Date, an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. The Assumed Final Distribution Date is the Distribution Date
in the month following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Certificate Principal Balance of
this Class of Certificates will be reduced to zero. [For Class A-6]: Interest on
this Certificate will accrue from and including the 25th day of the calendar
month preceding the month in which a Distribution Date (as hereinafter defined)
occurs to and including the 24th day of the calendar month in which that
Distribution Date occurs on the Certificate Notional Balance hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the

                                      A-1-3

<PAGE>

last day (or if such last day is not a Business Day, the Business Day
immediately preceding such last day) of the calendar month immediately preceding
the month in which the Distribution Date occurs, an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount (of
interest, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. [For
Class A-[1][2][3][4][5]]: The Initial Certificate Principal Balance of this
Certificate is set forth above. The Certificate Principal Balance hereof will be
reduced to the extent of distributions allocable to principal hereon. [For Class
A-6]: The initial Certificate Notional Balance of this Certificate is set forth
above.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing,

                                      A-1-4

<PAGE>

and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the earlier of (i) the first
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans is less than or equal to 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in July 2014. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-1-5

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: __________, 20__                      U.S. BANK NATIONAL ASSOCIATION,
                                             not in its individual capacity
                                             but solely as Trustee

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

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class A-[1][2][3][4][5][6] Certificates
referred to in the within-mentioned Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION
                                             Authorized signatory of U.S.
                                             Bank National Association, not
                                             in its individual capacity but
                                             solely as Trustee

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

                                      A-1-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

Dated:                 ________________________________________________________
                                      Signature by or on behalf of assignor

                             ________________________________________
                                      Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________________________________________ for
the account of ______________________________ account number _____________, or,
if mailed by check, to _______________________________________. Applicable
statements should be mailed to _____________________________________________.

                  This information is provided by ____________________________,
the assignee named above, or _____________________________, as its agent.

                                      A-1-7

<PAGE>

                                   EXHIBIT A-2

                       Form of Class M-[1][2] Certificates

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES [AND THE CLASS M-1 CERTIFICATES] AS DESCRIBED IN THE
AGREEMENT (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES APPLICABLE
HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  EACH BENEFICIAL OWNER OF A CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF
THAT CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A PLAN OR
INVESTING WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS HOLDING SUCH
CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 2002-41 AS AMENDED
("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE
AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT
THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY S&P, FITCH
RATINGS OR MOODY'S, AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE
CERTIFICATE OR INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS
SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60,
AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY

                                      A-2-1
<PAGE>

PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                                      A-2-2
<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No.1                                           Variable Pass-Through Rate

Class M-[1][2] Subordinate

Date of Pooling and Servicing Agreement                    Aggregate Initial Certificate Principal Balance of this
and Cut-off Date:                                          Certificate as of the Cut-off Date:
July 1, 2004                                               $________________

First Distribution Date:                                   Initial Certificate Principal Balance of this
August 25, 2004                                            Certificate as of the Cut-off Date:
                                                           $________________

Master Servicer:                                           CUSIP: _______________
Wells Fargo Bank, National Association

Assumed Final Distribution Date:
August 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-AC4

         evidencing a fractional undivided interest in the distributions
         allocable to the Class M-[1][2] Certificates with respect to a Trust
         Fund consisting primarily of a pool of conventional one- to four-family
         fixed interest rate mortgage loans sold by by BEAR STEARNS ASSET BACKED
         SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Stearns Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Stearns Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.

                  This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Stearns Asset Backed Securities I LLC ("BSABS I"). The Mortgage
Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS I. Wells Fargo
Bank, National Association will act as master servicer of the Mortgage Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-off Date

                                      A-2-3
<PAGE>

specified above (the "Agreement"), among BSABS I, as depositor (the
"Depositor"), EMC Mortgage Corporation as seller and company, Wells Fargo Bank,
National Association, as Master Servicer and securities administrator (the
"Securities Administrator") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  Interest on this Certificate will accrue from and including
the 25th day of the calendar month preceding the month in which a Distribution
Date (as hereinafter defined) occurs to and including the 24th day of the
calendar month in which that Distribution Date occurs on the Certificate
Principal Balance hereof at a per annum rate equal to the Pass-Through Rate set
forth above. The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the Business Day immediately preceding such
Distribution Date, an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. The Assumed Final Distribution Date is the Distribution Date
in the month following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Certificate Principal Balance of
this Class of Certificates will be reduced to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                                      A-2-4
<PAGE>

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  Each beneficial owner of a Certificate or any interest therein
shall be deemed to have represented, by virtue of its acquisition or holding of
that certificate or interest therein, that either (i) it is not a Plan or
investing with "Plan Assets", (ii) it has acquired and is holding such
certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by S&P, Fitch Ratings or Moody's, and the certificate is so
rated or (iii) (1) it is an insurance company, (2) the source of funds used to
acquire or hold the certificate or interest therein is an "insurance company
general account," as such term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE
95-60 have been satisfied.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of

                                      A-2-5
<PAGE>

any Mortgage Loan and (B) the remittance of all funds due under the Agreement,
or (ii) the optional repurchase by the party named in the Agreement of all the
Mortgage Loans and other assets of the Trust Fund in accordance with the terms
of the Agreement. Such optional repurchase may be made only on or after the
earlier of (i) the first Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 20% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date and
(ii) the Distribution Date in July 2014. The exercise of such right will effect
the early retirement of the Certificates. In no event, however, will the Trust
Fund created by the Agreement continue beyond the expiration of 21 years after
the death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-2-6
<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: __________, 20__                   U.S. BANK NATIONAL ASSOCIATION,
                                          not in its individual capacity but
                                          solely as Trustee

                                          By:__________________________________
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class M-[1][2] Certificates referred to in
the within-mentioned Agreement.

                                          U.S. BANK NATIONAL ASSOCIATION
                                          Authorized signatory of U.S.
                                          Bank National Association, not
                                          in its individual capacity but
                                          solely as Trustee

                                          By: _________________________________
                                                   Authorized Signatory

                                      A-2-7
<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

Dated:                 ________________________________________________________
                                      Signature by or on behalf of assignor

                             ________________________________________
                                      Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________________________________________ for
the account of ______________________________ account number _____________, or,
if mailed by check, to _______________________________________. Applicable
statements should be mailed to _____________________________________________.

                  This information is provided by ____________________________,
the assignee named above, or _____________________________, as its agent.

<PAGE>

                                   EXHIBIT A-3

                           Form of Class B Certificate

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES
AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE
PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  EACH BENEFICIAL OWNER OF A CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF
THAT CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A PLAN OR
INVESTING WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS HOLDING SUCH
CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 2002-41 AS AMENDED
("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE
AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT
THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY S&P, FITCH
RATINGS OR MOODY'S, AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE
CERTIFICATE OR INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS
SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60,
AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY

                                      A-3-1

<PAGE>

PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                                      A-3-2

<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No.1                                           Variable Pass-Through Rate

Class B Subordinate

Date of Pooling and Servicing Agreement                    Aggregate Initial Certificate Principal Balance of this
and Cut-off Date:                                          Certificate as of the Cut-off Date:
July 1, 2004                                               $________________

First Distribution Date:                                   Initial Certificate Principal Balance of this
August 25, 2004                                            Certificate as of the Cut-off Date:
                                                           $________________

Master Servicer:                                           CUSIP: _________________
Wells Fargo Bank, National Association

Assumed Final Distribution Date:
August 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-AC4

         evidencing a fractional undivided interest in the distributions
         allocable to the Class B Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         fixed interest rate mortgage loans sold by BEAR STEARNS ASSET BACKED
         SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Stearns Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Stearns Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.

                  This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences (collectively, the "Mortgage Loans")
sold by Bear Stearns Asset Backed Securities I LLC ("BSABS I"). The Mortgage
Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS I. Wells Fargo
Bank, National Association will act as master servicer of the Mortgage Loans
(the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement dated as of the Cut-off Date

                                      A-3-3

<PAGE>
specified above (the "Agreement"), among BSABS I, as depositor (the
"Depositor"), EMC Mortgage Corporation as seller and company, Wells Fargo Bank,
National Association, as Master Servicer and securities administrator (the
"Securities Administrator") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  Interest on this Certificate will accrue from and including
the 25th day of the calendar month preceding the month in which a Distribution
Date (as hereinafter defined) occurs to and including the 24th day of the
calendar month in which that Distribution Date occurs on the Certificate
Principal Balance hereof at a per annum rate equal to the Pass-Through Rate set
forth above. The Trustee will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the Business Day immediately preceding such
Distribution Date, an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. The Assumed Final Distribution Date is the Distribution Date
in the month following the latest scheduled maturity date of any Mortgage Loan
and is not likely to be the date on which the Certificate Principal Balance of
this Class of Certificates will be reduced to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                                      A-3-4

<PAGE>

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  Each beneficial owner of a Certificate or any interest therein
shall be deemed to have represented, by virtue of its acquisition or holding of
that certificate or interest therein, that either (i) it is not a Plan or
investing with "Plan Assets", (ii) it has acquired and is holding such
certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by S&P, Fitch Ratings or Moody's, and the certificate is so
rated or (iii) (1) it is an insurance company, (2) the source of funds used to
acquire or hold the certificate or interest therein is an "insurance company
general account," as such term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE
95-60 have been satisfied.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of

                                      A-3-5

<PAGE>
any Mortgage Loan and (B) the remittance of all funds due under the Agreement,
or (ii) the optional repurchase by the party named in the Agreement of all the
Mortgage Loans and other assets of the Trust Fund in accordance with the terms
of the Agreement. Such optional repurchase may be made only on or after the
earlier of (i) the first Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 20% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date and
(ii) the Distribution Date in July 2014. The exercise of such right will effect
the early retirement of the Certificates. In no event, however, will the Trust
Fund created by the Agreement continue beyond the expiration of 21 years after
the death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-3-6

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: __________, 20__                   U.S. BANK NATIONAL ASSOCIATION,
                                          not in its individual capacity but
                                          solely as Trustee

                                          By:__________________________________
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class B Certificates referred to in the
within-mentioned Agreement.

                                          U.S. BANK NATIONAL ASSOCIATION
                                          Authorized signatory of U.S.
                                          Bank National Association, not
                                          in its individual capacity but
                                          solely as Trustee

                                          By: _________________________________
                                                   Authorized Signatory

                                      A-3-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

Dated:                 ________________________________________________________
                                      Signature by or on behalf of assignor

                             ________________________________________
                                      Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________________________________________ for
the account of ______________________________ account number _____________, or,
if mailed by check, to _______________________________________. Applicable
statements should be mailed to _____________________________________________.

                  This information is provided by ____________________________,
the assignee named above, or _____________________________, as its agent.

                                      A-3-8

<PAGE>

                                   EXHIBIT A-4

                          Form of Class C Certificates

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
7.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER
SERVICER, THE TRUSTEE AND THE SECURITIES ADMINISTRATOR THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "PLAN ASSETS" UNDER ERISA OR THE CODE, WILL NOT RESULT
IN ANY NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF
THE CODE AND

                                      A-4-1
<PAGE>

WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES
ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN
THE AGREEMENT.

                                      A-4-2
<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No.1                                           Percentage Interest: 100%

Class C                                                    Variable Pass-Through Rate

Date of Pooling and Servicing Agreement                    Initial Certificate Principal Balance of this
and Cut-off Date:                                          Certificate as of the Cut-off Date:
July 1, 2004                                               $______________

First Distribution Date:                                   Initial Certificate Notional Balance of this
August 25, 2004                                            Certificate as of the Cut-off Date:
                                                           $______________

Master Servicer:                                           CUSIP:______________
Wells Fargo Bank, National Association

Assumed Final Distribution Date:
August 25, 2034

</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-AC4

         evidencing a fractional undivided interest in the distributions
         allocable to the Class C Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         fixed interest rate mortgage loans sold by BEAR STEARNS ASSET BACKED
         SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Stearns Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Stearns Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.

                  This certifies that Bear, Stearns Securities Corp. is the
registered owner of the Percentage Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of conventional first lien, fixed
rate mortgage loans secured by one- to four- family residences (collectively,
the "Mortgage Loans") sold by Bear Stearns Asset Backed Securities I LLC ("BSABS
I"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS
I. Wells Fargo Bank, National Association will act as master servicer of the
Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below).

                                      A-4-3
<PAGE>

The Trust Fund was created pursuant to the Pooling and Servicing Agreement dated
as of the Cut-off Date specified above (the "Agreement"), among BSABS I, as
depositor (the "Depositor"), EMC Mortgage Corporation as seller and company,
Wells Fargo Bank, National Association, as Master Servicer and securities
administrator (the "Securities Administrator") and U.S. Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit D and either E
or F, as applicable, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Securities Administrator or the
Master Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. Neither the Depositor nor the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the

                                      A-4-4
<PAGE>

transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Securities Administrator, the Depositor, the Seller and the
Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

                  No transfer of this Class C Certificate will be made unless
the Trustee shall have received the opinion of counsel set forth in section 7.02
of the Agreement or (ii) a representation letter, in the form as described by
the Agreement, stating that the transferee is not an employee benefit or other
plan subject to the prohibited transaction provisions of ERISA or Section 4975
of the Code (a "Plan"), or any other person (including an investment manager, a
named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any Plan.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and

                                      A-4-5
<PAGE>

subject to certain limitations therein set forth, this Certificate is
exchangeable for one or more new Certificates evidencing the same Class and in
the same aggregate Percentage Interest, as requested by the Holder surrendering
the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the earlier of (i) the first
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans is less than or equal to 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in July 2014. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-4-6
<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: __________, 20__                   U.S. BANK NATIONAL ASSOCIATION,
                                          not in its individual capacity but
                                          solely as Trustee

                                          By:__________________________________
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class C Certificates referred to in the
within-mentioned Agreement.

                                          U.S. BANK NATIONAL ASSOCIATION
                                          Authorized signatory of U.S.
                                          Bank National Association, not
                                          in its individual capacity but
                                          solely as Trustee

                                          By: _________________________________
                                                   Authorized Signatory

                                      A-4-7
<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

Dated:                 ________________________________________________________
                                      Signature by or on behalf of assignor

                             ________________________________________
                                      Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________________________________________ for
the account of ______________________________ account number _____________, or,
if mailed by check, to _______________________________________. Applicable
statements should be mailed to _____________________________________________.

                  This information is provided by ____________________________,
the assignee named above, or _____________________________, as its agent.

                                      A-4-8
<PAGE>

                                   EXHIBIT A-5

                           Form of Class P Certificate

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL
ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION

                                      A-5-1

<PAGE>

PURSUANT TO SECTION 7.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE
WILL NOT CONSTITUTE OR RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE
"PLAN ASSETS" UNDER ERISA OR THE CODE, WILL NOT RESULT IN ANY NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE AND WILL
NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

                                      A-5-2

<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No.1                                           Percentage Interest: 100%

Class P

Date of Pooling and Servicing Agreement                    Aggregate Initial Certificate Principal Balance of this
and Cut-off Date:                                          Certificate as of the Cut-off Date:
July 1, 2004                                               $100.00

First Distribution Date:                                   Initial Certificate Principal Balance of this
August 25, 2004                                            Certificate as of the Cut-off Date:
                                                           $100.00

Master Servicer:                                           CUSIP: _________________
Wells Fargo Bank, National Association

Assumed Final Distribution Date:
August 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-AC4

         evidencing a fractional undivided interest in the distributions
         allocable to the Class P Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         fixed interest rate mortgage loans sold by BEAR STEARNS ASSET BACKED
         SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Stearns Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Stearns Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.

                  This certifies that Bear, Stearns Securities Corp. is the
registered owner of the Percentage Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of conventional first lien, fixed
rate mortgage loans secured by one- to four- family residences (collectively,
the "Mortgage Loans") sold by Bear Stearns Asset Backed Securities I LLC ("BSABS
I"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS
I. Wells Fargo Bank, National Association will act as master servicer of the
Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the

                                      A-5-3

<PAGE>
Cut-off Date specified above (the "Agreement"), among BSABS I, as depositor (the
"Depositor"), EMC Mortgage Corporation as seller and company, Wells Fargo Bank,
National Association, as Master Servicer and securities administrator (the
"Securities Administrator") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that

                                      A-5-4

<PAGE>
such a transfer of this Certificate is to be made without registration or
qualification, the Trustee shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder's prospective transferee, substantially in the
forms attached to the Agreement as Exhibit D and either E or F, as applicable,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Securities Administrator or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. Neither the
Depositor nor the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Securities Administrator, the
Depositor, the Seller and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Class P Certificate will be made unless
the Trustee shall have received either (i) the opinion of counsel set forth in
Section 7.02(b) of the Pooling Agreement or (ii) a representation letter, in the
form as described by the Agreement, stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such

                                      A-5-5

<PAGE>
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the earlier of (i) the first
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans is less than or equal to 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in July 2014. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-5-6

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: __________, 20__                   U.S. BANK NATIONAL ASSOCIATION,
                                          not in its individual capacity but
                                          solely as Trustee

                                          By:__________________________________
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                          U.S. BANK NATIONAL ASSOCIATION
                                          Authorized signatory of U.S.
                                          Bank National Association, not
                                          in its individual capacity but
                                          solely as Trustee

                                          By: _________________________________
                                                   Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

Dated:                 ________________________________________________________
                                      Signature by or on behalf of assignor

                             ________________________________________
                                      Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________________________________________ for
the account of ______________________________ account number _____________, or,
if mailed by check, to _______________________________________. Applicable
statements should be mailed to _____________________________________________.

                  This information is provided by ____________________________,
the assignee named above, or _____________________________, as its agent.

                                      A-5-8

<PAGE>

                                   EXHIBIT A-6

                     Form of Class R-[1][2][3] Certificates

                  THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION
7.02(B) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT
IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" UNDER ERISA OR THE
CODE, WILL NOT RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE
OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO
THOSE UNDERTAKEN IN THE AGREEMENT.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED
STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR FREDDIE MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(A)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(A) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE

                                     A-6-1

<PAGE>

FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION,
(2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.

                                     A-6-2

<PAGE>

<TABLE>
<CAPTION>
<S>                                                       <C>
Certificate No.1

Class R-[1][2][3]
                                                           Percentage Interest: 100%
Date of Pooling and Servicing Agreement
and Cut-off Date:
July 1, 2004

First Distribution Date:
August 25, 2004

Master Servicer:
Wells Fargo Bank, National Association
                                                           CUSIP: [____________]
Assumed Final Distribution Date:
August 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-AC4

         evidencing a fractional undivided interest in the distributions
         allocable to the Class R-[1][2][3] Certificates with respect to a Trust
         Fund consisting primarily of a pool of conventional one- to four-family
         fixed interest rate mortgage loans sold by BEAR STEARNS ASSET BACKED
         SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer, the Trustee or the
Securities Administrator referred to below or any of their affiliates or any
other person. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental entity or by Bear Stearns Asset Backed
Securities I LLC, the Master Servicer, the Trustee or the Securities
Administrator or any of their affiliates or any other person. None of Bear
Stearns Asset Backed Securities I LLC, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.

                  This certifies that Bear, Stearns Securities Corp. is the
registered owner of the Percentage Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of conventional first lien, fixed
rate mortgage loans secured by one- to four- family residences (collectively,
the "Mortgage Loans") sold by Bear Stearns Asset Backed Securities I LLC ("BSABS
I"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to BSABS
I. Wells Fargo Bank, National Association will act as master servicer of the
Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement"), among BSABS I, as depositor (the

                                     A-6-3

<PAGE>
"Depositor"), EMC Mortgage Corporation as seller and company, Wells Fargo Bank,
National Association, as Master Servicer and securities administrator (the
"Securities Administrator") and U.S. Bank National Association as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month following the latest scheduled maturity date of
any Mortgage Loan.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Class R-[1][2][3] Certificate will be made
unless the Trustee shall have received either (i) the opinion of counsel set
forth in section 7.02 of the Pooling Agreement or (ii) a representation letter,
in the form as described by the Agreement, stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an

                                     A-6-4

<PAGE>

investment manager, a named fiduciary or a trustee of any Plan) acting, directly
or indirectly, on behalf of or purchasing any Certificate with "plan assets" of
any Plan.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.

                                     A-6-5

<PAGE>
                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the earlier of (i) the first
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans is less than or equal to 20% of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date and (ii) the Distribution Date
in July 2014. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-6-6

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: __________, 20__                   U.S. BANK NATIONAL ASSOCIATION,
                                          not in its individual capacity but
                                          solely as Trustee

                                          By:__________________________________
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class R-[1][2][3] Certificates referred to
in the within-mentioned Agreement.

                                          U.S. BANK NATIONAL ASSOCIATION
                                          Authorized signatory of U.S.
                                          Bank National Association, not
                                          in its individual capacity but
                                          solely as Trustee

                                          By: _________________________________
                                                   Authorized Signatory

                                     A-6-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

Dated:                 ________________________________________________________
                                      Signature by or on behalf of assignor

                             ________________________________________
                                      Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________________________________________ for
the account of ______________________________ account number _____________, or,
if mailed by check, to _______________________________________. Applicable
statements should be mailed to _____________________________________________.

                  This information is provided by ____________________________,
the assignee named above, or _____________________________, as its agent.

                                     A-6-8

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE
                             ----------------------

                             [provided upon request]

                                       B-1

<PAGE>

                                    EXHIBIT C

                           FORM OF TRANSFER AFFIDAVIT

                             Affidavit  pursuant to Section  860E(e)(4) of the
                             Internal  Revenue Code of 1986,  as amended,  and
                             for other purposes

STATE OF        )
                )ss:
COUNTY OF       )

         [NAME OF OFFICER], being first duly sworn, deposes and says:

         1. That he/she is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____] [the United States], on behalf of which
he makes this affidavit.

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Bear Stearns Asset-Backed
Securities I LLC Asset-Backed Certificates, Series 2004-AC4, Class R-__
Certificates (the "Residual Certificates") for the account of a disqualified
organization; (iii) it consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by Bear Stearns Asset Backed Securities
I LLC (upon advice of counsel) to constitute a reasonable arrangement to ensure
that the Residual Certificates will not be owned directly or indirectly by a
disqualified organization; and (iv) it will not transfer such Residual
Certificates unless (a) it has received from the transferee an affidavit in
substantially the same form as this affidavit containing these same four
representations and (b) as of the time of the transfer, it does not have actual
knowledge that such affidavit is false.

         3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

         4. That the Investor's taxpayer identification number is
______________________.

         5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.

                                       C-1
<PAGE>

         6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.

         7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.

         IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.

                                          [NAME OF INVESTOR]

                                          By:
                                            ------------------------------------
                                            [Name of Officer]
                                            [Title of Officer]
                                            [Address of Investor for receipt of
                                            distributions]

                                            Address of Investor
                                            for receipt of tax
                                            information:

                                       C-2

<PAGE>

Personally appeared before me the above-named [Name of Officer], known or proved
to me to be the same person who executed the foregoing instrument and to be the
[Title of Officer] of the Investor, and acknowledged to me that he/she executed
the same as his/her free act and deed and the free act and deed of the Investor.

         Subscribed and sworn before me this ___ day of _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of ___________________, 20___.

                                       C-3
<PAGE>

                                    EXHIBIT D

                         FORM OF TRANSFEROR CERTIFICATE

                              ______________,200___

Bear Stearns Asset Backed Securities I LLC
383 Madison Avenue
New York, New York 10179

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, MA 02110

Attention: Bear Stearns Asset Backed Securities I Trust 2004-AC4

                  Re:      Bear Stearns Asset Backed Securities I LLC
                           Asset-Backed Certificates, Series 2004-AC4, Class__
                           ---------------------------------------------------

Ladies and Gentlemen:

         In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Asset-Backed Certificates, Series 2004-AC4, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of July 1, 2004, among Bear Stearns Asset-Backed
Securities I LLC, as depositor (the "Depositor"), EMC Mortgage Corporation, as
seller and company, Wells Fargo Bank, National Association, as master servicer
and securities administrator and U.S. Bank National Association, as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, a covenants
with, the Depositor and the Trustee that:

         Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the foregoing sentence with respect to any Certificate. The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.

                                       D-1
<PAGE>

                                          Very truly yours,

                                          _____________________________________
                                          (Seller)

                                          By: _________________________________
                                          Name:________________________________
                                          Title:_______________________________

                                       D-2
<PAGE>

                                    EXHIBIT E

             FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)

                                ___________,200__

Bear Stearns Asset Backed Securities I LLC
383 Madison Avenue
New York, New York 10179

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, MA 02100

Attention:        Bear Stearns Asset Backed Securities I Trust 2004-AC4

                  Re:      Bear Stearns Asset-Backed Securities I LLC
                           Asset-Backed Certificates, Series 2004-AC4, Class__
                           ---------------------------------------------------

Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ Initial Certificate Principal Balance
of Asset-Backed Certificates, Series 2004-AC4, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of July 1, 2004 among Bear Stearns Asset Backed
Securities I LLC, as depositor (the "Depositor"), EMC Mortgage Corporation, as
seller and company, Wells Fargo Bank, National Association, as master servicer
and securities administrator, and U.S. Bank National Association, as trustee
(the "Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Depositor and the
Trustee that:

                           1. The Purchaser understands that (a) the
                  Certificates have not been and will not be registered or
                  qualified under the Securities Act of 1933, as amended (the
                  "Act") or any state securities law, (b) the Depositor is not
                  required to so register or qualify the Certificates, (c) the
                  Certificates may be resold only if registered and qualified
                  pursuant to the provisions of the Act or any state securities
                  law, or if an exemption from such registration and
                  qualification is available, (d) the Pooling and Servicing
                  Agreement contains restrictions regarding the transfer of the
                  Certificates and (e) the Certificates will bear a legend to
                  the foregoing effect.

                           2. The Purchaser is acquiring the Certificates for
                  its own account for investment only and not with a view to or
                  for sale in connection with any distribution thereof in any
                  manner that would violate the Act or any applicable state
                  securities laws.

                                       E-1
<PAGE>

                           3. The Purchaser is (a) a substantial, sophisticated
                  institutional investor having such knowledge and experience in
                  financial and business matters, and, in particular, in such
                  matters related to securities similar to the Certificates,
                  such that it is capable of evaluating the merits and risks of
                  investment in the Certificates, (b) able to bear the economic
                  risks of such an investment and (c) an "accredited investor"
                  within the meaning of Rule 501 (a) promulgated pursuant to the
                  Act.

                           4. The Purchaser has been furnished with, and has had
                  an opportunity to review (a) [a copy of the Private Placement
                  Memorandum, dated ______, 2004, relating to the Certificates
                  (b)] a copy of the Pooling and Servicing Agreement and [(b)]
                  [(c)] such other information concerning the Certificates, the
                  Mortgage Loans and the Depositor as has been requested by the
                  Purchaser from the Depositor or the Seller and is relevant to
                  the Purchaser's decision to purchase the Certificates. The
                  Purchaser has had any questions arising from such review
                  answered by the Depositor or the Seller to the satisfaction of
                  the Purchaser. [If the Purchaser did not purchase the
                  Certificates from the Seller in connection with the initial
                  distribution of the Certificates and was provided with a copy
                  of the Private Placement Memorandum (the "Memorandum")
                  relating to the original sale (the "Original Sale") of the
                  Certificates by the Depositor, the Purchaser acknowledges that
                  such Memorandum was provided to it by the Seller, that the
                  Memorandum was prepared by the Depositor solely for use in
                  connection with the Original Sale and the Depositor did not
                  participate in or facilitate in any way the purchase of the
                  Certificates by the Purchaser from the Seller, and the
                  Purchaser agrees that it will look solely to the Seller and
                  not to the Depositor with respect to any damage, liability,
                  claim or expense arising out of, resulting from or in
                  connection with (a) error or omission, or alleged error or
                  omission, contained in the Memorandum, or (b) any information,
                  development or event arising after the date of the
                  Memorandum.]

                           5. The Purchaser has not and will not nor has it
                  authorized or will it authorize any person to (a) offer,
                  pledge, sell, dispose of or otherwise transfer any
                  Certificate, any interest in any Certificate or any other
                  similar security to any person in any manner, (b) solicit any
                  offer to buy or to accept a pledge, disposition of other
                  transfer of any Certificate, any interest in any Certificate
                  or any other similar security from any person in any manner,
                  (c) otherwise approach or negotiate with respect to any
                  Certificate, any interest in any Certificate or any other
                  similar security with any person in any manner, (d) make any
                  general solicitation by means of general advertising or in any
                  other manner or (e) take any other action, that (as to any of
                  (a) through (e) above) would constitute a distribution of any
                  Certificate under the Act, that would render the disposition
                  of any Certificate a violation of Section 5 of the Act or any
                  state securities law, or that would require registration or
                  qualification pursuant thereto. The Purchaser will not sell or
                  otherwise transfer any of the Certificates, except in
                  compliance with the provisions of the Pooling and Servicing
                  Agreement.

                                       E-2
<PAGE>

                                            Very truly yours,

                                            ___________________________________
                                            (Purchaser)

                                            By: _______________________________

                                            Name: _____________________________

                                            Title: ____________________________

                                       E-3
<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                         [NAME OF NOMINEE]

                                         By:___________________________
                                             (Authorized Officer)

                                         [By:__________________________
                                             Attorney-in-fact]

                                       E-4
<PAGE>

                                    EXHIBIT F

                            FORM OF INVESTMENT LETTER

                                                           [Date]

[SELLER]

Bear Stearns Asset Backed Securities I LLC
383 Madison Avenue
New York, New York 10179

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, MA 02110

     Re:  Bear Stearns Asset Backed Securities I Trust 2004-AC4, Asset-Backed
          Certificates, Series 2004-AC4 (the "Certificates"), including the
          Class ___ Certificates (The "Privately Offered Certificates")
          -------------------------------------------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, we
confirm that:

                  (i)      we understand that the Privately Offered Certificates
                           are not being registered under the Securities Act of
                           1933, as amended (the "Act") or any applicable state
                           securities or "Blue Sky" laws, and are being sold to
                           us in a transaction that is exempt from the
                           registration requirements of such laws;

                  (ii)     any information we desired concerning the
                           Certificates, including the Privately Offered
                           Certificates, the trust in which the Certificates
                           represent the entire beneficial ownership interest
                           (the "Trust") or any other matter we deemed relevant
                           to our decision to purchase Privately Offered
                           Certificates has been made available to us;

                  (iii)    we are able to bear the economic risk of investment
                           in Privately Offered Certificates; we are an
                           institutional "accredited investor" as defined in
                           Section 501(a) of Regulation D promulgated under the
                           Act and a sophisticated institutional investor;

                  (iv)     we are acquiring Privately Offered Certificates for
                           our own account, not as nominee for any other person,
                           and not with a present view to any distribution or
                           other disposition of the Privately Offered
                           Certificates;

                  (v)      we agree the Privately Offered Certificates must be
                           held indefinitely by us (and may not be sold,
                           pledged, hypothecated or in any way disposed of)
                           unless subsequently registered under the Act and any
                           applicable state securities or "Blue Sky" laws or an
                           exemption from the registration

                                       F-1

<PAGE>

                           requirements of the Act and any applicable state
                           securities or "Blue Sky" laws is available;

                  (vi)     we agree that in the event that at some future time
                           we wish to dispose of or exchange any of the
                           Privately Offered Certificates (such disposition or
                           exchange not being currently foreseen or
                           contemplated), we will not transfer or exchange any
                           of the Privately Offered Certificates unless:

                                    (A) (1) the sale is to an Eligible Purchaser
                           (as defined below), (2) if required by the Pooling
                           and Servicing Agreement (as defined below) a letter
                           to substantially the same effect as either this
                           letter or, if the Eligible Purchaser is a Qualified
                           Institutional Buyer as defined under Rule 144A of the
                           Act, the Rule 144A and Related Matters Certificate in
                           the form attached to the Pooling and Servicing
                           Agreement (as defined below) (or such other
                           documentation as may be acceptable to the Trustee and
                           the Securities Administrator) is executed promptly by
                           the purchaser and delivered to the addressees hereof
                           and (3) all offers or solicitations in connection
                           with the sale, whether directly or through any agent
                           acting on our behalf, are limited only to Eligible
                           Purchasers and are not made by means of any form of
                           general solicitation or general advertising
                           whatsoever; and

                                    (B) if the Privately Offered Certificate is
                           not registered under the Act (as to which we
                           acknowledge you have no obligation), the Privately
                           Offered Certificate is sold in a transaction that
                           does not require registration under the Act and any
                           applicable state securities or "blue sky" laws and,
                           if Wells Fargo Bank, National Association (the
                           "Securities Administrator") so requests, a
                           satisfactory Opinion of Counsel is furnished to such
                           effect, which Opinion of Counsel shall be an expense
                           of the transferor or the transferee;

                  (vii)    we agree to be bound by all of the terms (including
                           those relating to restrictions on transfer) of the
                           Pooling and Servicing, pursuant to which the Trust
                           was formed; we have reviewed carefully and understand
                           the terms of the Pooling and Servicing Agreement;

                  (viii)   we either: (i) are not acquiring the Privately
                           Offered Certificate directly or indirectly by, or on
                           behalf of, an employee benefit plan or other
                           retirement arrangement which is subject to Title I of
                           the Employee Retirement Income Security Act of 1974,
                           as amended, and/or section 4975 of the Internal
                           Revenue Code of 1986, as amended, or (ii) are
                           providing the Opinion of Counsel required by the
                           Agreement.

                  (ix)     We understand that each of the Class ___ Certificates
                           bears, and will continue to bear, a legend to
                           substantiate the following effect: "THIS CERTIFICATE
                           HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
                           SECURITIES ACT OF 1933, AS AMENDED (THE

                                       F-2

<PAGE>
                           "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
                           LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
                           CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
                           REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
                           ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
                           APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
                           UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
                           THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
                           INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
                           (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
                           PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
                           HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
                           PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
                           RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
                           REGISTRATION PROVIDED BY RULE 144 UNDER THE
                           SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
                           FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
                           THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
                           (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
                           WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
                           PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
                           VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
                           RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
                           THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
                           RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
                           ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
                           PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
                           SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
                           CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
                           LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
                           JURISDICTION. THIS CERTIFICATE HAS NOT BEEN AND WILL
                           NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933,
                           AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
                           SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
                           THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
                           REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
                           ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
                           APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
                           UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
                           THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
                           INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
                           (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
                           PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
                           HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
                           PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
                           RULE 144A, (2) PURSUANT TO AN EXEMPTION

                                       F-3

<PAGE>

                           FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
                           SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
                           FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
                           THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
                           (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
                           WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
                           PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
                           VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
                           RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
                           THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
                           RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
                           ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
                           PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
                           SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
                           CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
                           LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
                           JURISDICTION."

         "ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.

         Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of July 1, 2004, between
Bear Stearns Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation, as seller and company, Wells Fargo Bank, National Association, as
master servicer and securities administrator and U.S. Bank National Association,
as Trustee (the "Pooling and Servicing Agreement').

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

Name of Nominee (if any): ___________________________

                                       F-4

<PAGE>

         IN WITNESS  WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.

                                       Very truly yours,

                                       [PURCHASER]

                                       By: ____________________________________
                                               (Authorized Officer)

                                       [By: ____________________________________
                                               Attorney-in-fact]

                                       F-5

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                       [NAME OF NOMINEE]

                                       By: ____________________________________
                                               (Authorized Officer)

                                       [By: ____________________________________
                                               Attorney-in-fact]

                                       F-6

<PAGE>

                                    EXHIBIT G

                           FORM OF REQUEST FOR RELEASE

To:      U.S. Bank National Association
         One Federal Street, 3rd Floor
         Boston, MA 02110

RE:      Pooling and Servicing Agreement, dated as of July 1, 2004, between
         Bear Stearns Asset Backed Securities I LLC, as Depositor, EMC Mortgage
         Corporation, as seller and company, Wells Fargo Bank, National
         Association, as master servicer and securities Administrator and U.S.
         Bank National Association, as TRUSTEE

         In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.

Mortgage Loan Number:
---------------------

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_____             1.       Mortgage Paid in Full and proceeds have been
                           deposited into the Custodial Account

_____             2.       Foreclosure

_____             3.       Substitution

_____             4.       Other Liquidation

_____             5.       Nonliquidation        Reason: ____________________

_____             6.       California Mortgage Loan paid in full

                                              By: ___________________________
                                                    (authorized signer)

                                              Issuer: _______________________
                                              Address: ______________________

                                              Date: _________________________

                                      G-1
<PAGE>

                                    EXHIBIT H

                          DTC Letter of Representations
                             [provided upon request]

                                       H-1
<PAGE>

                                    EXHIBIT I

                   Schedule of Mortgage Loans with Lost Notes
                             [provided upon request]

                                       I-1

<PAGE>

                                    EXHIBIT J

                           FORM OF CUSTODIAL AGREEMENT
                           ---------------------------

                  THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of July 30, 2004, by and among U.S.
BANK NATIONAL ASSOCIATION, as trustee (including its successors under the
Pooling and Servicing Agreement defined below, the "Trustee"), BEAR STEARNS
ASSET BACKED SECURITIES I LLC, as depositor (together with any successor in
interest, the "Depositor"), EMC MORTGAGE CORPORATION, as seller (the "Seller")
and company (together with any successor in interest or successor under the
Pooling and Servicing Agreement referred to below, the "Company") and WELLS
FARGO BANK, NATIONAL ASSOCIATION, as master servicer (together with any
successor in interest or successor under the Pooling and Servicing Agreement
referred to below, the "Master Servicer"), securities administrator and
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian").

                                WITNESSETH THAT:
                                ----------------

                  WHEREAS, the Depositor, the Seller, the Master Servicer and
the Trustee have entered into a Pooling and Servicing Agreement, dated as of
July 1, 2004, relating to the issuance of Bear Stearns Asset Backed Securities I
Trust 2004-AC4, Asset-Backed Certificates, Series 2004-AC4 (as in effect on the
date of this agreement, the "Original Pooling and Servicing Agreement," and as
amended and supplemented from time to time, the "Pooling and Servicing
Agreement'); and

                  WHEREAS, the Custodian has agreed to act as agent for the
Trustee for the purposes of receiving and holding certain documents and other
instruments delivered by the Depositor, the Seller or the Master Servicer under
the Pooling and Servicing Agreement and the Servicers under their respective
Servicing Agreements, all upon the terms and conditions and subject to the
limitations hereinafter set forth;

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the
Depositor, the Seller, the Master Servicer and the Custodian hereby agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS

                  Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.

                                   ARTICLE II
                          CUSTODY OF MORTGAGE DOCUMENTS

                  Section 2.1 CUSTODIAN TO ACT AS AGENT: ACCEPTANCE OF MORTGAGE
FILES. The custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a) receipt of the

                                       J-1
<PAGE>

Mortgage Files relating to the Mortgage Loans identified on the schedule
attached hereto (the "Mortgage Files") and declares that it holds and will hold
such Mortgage Files as agent for the Trustee, in trust, for the use and benefit
of all present and future Certificateholders.

                  Section 2.2 RECORDATION OF ASSIGNMENTS. If any Mortgage File
includes one or more assignments of Mortgage that have not been recorded
pursuant to the provisions of Section 2.01 of the Pooling and Servicing
Agreement and the related Mortgage Loan is not a MOM Loan or the related
Mortgaged Properties are located in jurisdictions specifically excluded by the
Opinion of Counsel delivered to the Trustee pursuant to Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Seller for the purpose of recording it in the appropriate
public office for real property records, and the Seller, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.

                  Section 2.3 REVIEW OF MORTGAGE FILES.

                  (a) On or prior to the Closing Date, in accordance with
Section 2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver
to the Seller and the Trustee an Initial Certification in the form annexed
hereto as Exhibit One evidencing receipt (subject to any exceptions noted
therein) of a Mortgage File for each of the Mortgage Loans listed on the
Schedule attached hereto (the "Mortgage Loan Schedule").

                  (b) Within 90 days of the Closing Date, the Custodian agrees,
for the benefit of Certificateholders, to review, in accordance with the
provisions of Section 2.02 of the Pooling and Servicing Agreement, each such
document, and shall deliver to the Seller and the Trustee an Interim
Certification in the form annexed hereto as Exhibit Two to the effect that all
such documents have been executed and received and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, except for any
exceptions listed on Schedule A attached to such Interim Certification. The
Custodian shall be under no duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face.

                  (c) Not later than 180 days after the Closing Date, the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and deliver to the Seller and the Trustee a
Final Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage Files.

                  (d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.

                                       J-2
<PAGE>
                  Upon receipt of written request from the Trustee, the
Custodian shall as soon as practicable supply the Trustee with a list of all of
the documents relating to the Mortgage Loans missing from the Mortgage Files.

                  Section 2.4 NOTIFICATION OF BREACHES OF REPRESENTATIONS AND
WARRANTIES. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Depositor as set forth in the Pooling and Servicing
Agreement with respect to a Mortgage Loan relating to a Mortgage File, the
Custodian shall give prompt written notice to the Depositor, the related
Servicer and the Trustee.

                  Section 2.5 CUSTODIAN TO COOPERATE: RELEASE OF MORTGAGE FILES.
Upon receipt of written notice from the Trustee that the Seller has repurchased
a Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement,
and a request for release (a "Request for Release") confirming that the purchase
price therefore has been deposited in the Master Servicer Collection Account or
the Distribution Account, then the Custodian agrees to promptly release to the
Seller the related Mortgage File.

                  Upon the Custodian's receipt of a Request for Release
substantially in the form of Exhibit H to the Pooling and Servicing Agreement
signed by a Servicing Officer of the Company or the Servicer, as applicable,
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees promptly to release to the Company or the Servicer, as applicable, the
related Mortgage File. The Depositor shall deliver to the Custodian and the
Custodian agrees to review in accordance with the provisions of their Agreement
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Replacement Mortgage Loan.

                  From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy or LPMI Policy, the Company or the Servicer, as
applicable, shall deliver to the Custodian a Request for Release signed by a
Servicing Officer requesting that possession of all of the Mortgage File be
released to the Company or the Servicer, as applicable, and certifying as to the
reason for such release and that such release will not invalidate any insurance
coverage provided in respect of the Mortgage Loan under any of the Insurance
Policies. Upon receipt of the foregoing, the Custodian shall deliver the
Mortgage File to the Company or the Servicer, as applicable. The Company or the
Servicer, as applicable, shall cause each Mortgage File or any document therein
so released to be returned to the Custodian when the need therefore by the
Company or the Servicer, as applicable, no longer exists, unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Master Servicer Collection Account or
the Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Company or the Servicer, as applicable, has delivered to
the Custodian a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery.

                                       J-3
<PAGE>
                  At any time that the Company or the Servicer is required to
deliver to the Custodian a Request for Release, the Company or the Servicer, as
applicable, shall deliver two copies of the Request for Release if delivered in
hard copy or the Company or the Servicer, as applicable, may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release shall
be accompanied by an assignment of mortgage, without recourse, representation or
warranty from the Trustee to the Seller (unless such Mortgage Loan is a MOM
Loan) and the related Mortgage Note shall be endorsed without recourse,
representation or warranty by the Trustee and be returned to the Seller. In
connection with any Request for Release of a Mortgage File because of the
payment in full of a Mortgage Loan, such Request for Release shall be
accompanied by a certificate of satisfaction or other similar instrument to be
executed by or on behalf of the Trustee and returned to the Company or the
Servicer, as applicable.

                  Section 2.6 ASSUMPTION AGREEMENTS. In the event that any
assumption agreement, substitution of liability agreement or sale of servicing
agreement is entered into with respect to any Mortgage Loan subject to this
Agreement in accordance with the terms and provisions of the Pooling and
Servicing Agreement, the Master Servicer, to the extent provided in the Pooling
and Servicing Agreement or National City Servicing Agreement, shall cause the
Company or the Servicer, as applicable, to notify the Custodian that such
assumption or substitution agreement has been completed by forwarding to the
Custodian the original of such assumption or substitution agreement, which shall
be added to the related Mortgage File and, for all purposes, shall be considered
a part of such Mortgage File to the same extent as all other documents and
instruments constituting parts thereof.

                                  ARTICLE III
                            CONCERNING THE CUSTODIAN

                  Section 3.1 CUSTODIAN A BAILEE AND AGENT OF THE TRUSTEE. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and agent of the Trustee and has no instructions to hold any Mortgage
Note or Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the Custodian to the Company, the Depositor,
the Servicer or the Master Servicer or otherwise released from the possession of
the Custodian.

                  Section 3.2 RESERVED.

                  Section 3.3 CUSTODIAN MAY OWN CERTIFICATES. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.

                  Section 3.4 MASTER SERVICER TO PAY CUSTODIAN'S FEES AND
EXPENSES. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the

                                       J-4
<PAGE>

Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith or to the extent that such cost or expense is
indemnified by the Depositor pursuant to the Pooling and Servicing Agreement.

                  Section 3.5 CUSTODIAN MAY RESIGN; TRUSTEE MAY REMOVE
CUSTODIAN. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans. Upon receiving such notice of resignation, the Trustee
shall either take custody of the Mortgage Files itself and give prompt notice
thereof to the Depositor, the Master Servicer and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.

                  The Trustee may remove the Custodian at any time upon 60 days
prior written notice to Custodian. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Servicers, the Company and the Depositor.

                  Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Depositor and the Master
Servicer of the appointment of any successor Custodian. No successor Custodian
shall be appointed by the Trustee without the prior approval of the Depositor
and the Master Servicer.

                  Section 3.6 MERGER OR CONSOLIDATION OF CUSTODIAN. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  Section 3.7 REPRESENTATIONS OF THE CUSTODIAN. The Custodian
hereby represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.

                                       J-5
<PAGE>
                                   ARTICLE IV
                            MISCELLANEOUS PROVISIONS

                  Section 4.1 NOTICES. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.

                  Section 4.2 AMENDMENTS. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto. The Trustee shall give prompt notice
to the Custodian of any amendment or supplement to the Pooling and Servicing
Agreement and furnish the Custodian with written copies thereof.

                  Section 4.3 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

                  Section 4.4 RECORDATION OF AGREEMENT. To the extent permitted
by applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Depositor and at the Trust's expense on
direction by the Trustee, but only upon direction accompanied by an Opinion of
Counsel reasonably satisfactory to the Depositor to the effect that the failure
to effect such recordation is likely to materially and adversely affect the
interests of the Certificateholders.

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

                  Section 4.5 SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.

                                       J-6
<PAGE>

         IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.

<TABLE>
<CAPTION>

<S>                                                         <C>
Address:                                                    U.S. BANK NATIONAL ASSOCIATION, as Trustee

One Federal Street, 3rd Floor
Boston, MA 02110                                            By: _______________________________
                                                            Name:
Attention: Corporate Trust Services, BSABS I 2004-AC4       Title:
Telecopy: (617) 603-6638
Confirmation:

Address:                                                    BEAR STEARNS ASSET BACKED SECURITIES I LLC

383 Madison Avenue                                          By: _______________________________
New York, New York 10179                                    Name:
                                                            Title:

Address:                                                    EMC MORTGAGE CORPORATION

909 Hidden Ridge Drive, Suite 200                           By: _______________________________
Irving, Texas 75038                                         Name:
                                                            Title:

Address:                                                    WELLS FARGO BANK,
                                                            NATIONAL ASSOCIATION, as Custodian
9062 Old Annapolis Road
Columbia, Maryland 21045                                    By: _______________________________
                                                            Name:
                                                            Title:
</TABLE>

                                      J-7
<PAGE>

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

                  On the ______ day of July 2004 before me, a notary public in
and for said State, personally appeared _______________, known to me to be a
_________________of U.S. Bank National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation and acknowledged to me that
such corporation executed the within instrument.

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

                                                 _______________________________
                                                         Notary Public

[SEAL]

                                      J-8
<PAGE>

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

                  On the ______ day of July 2004 before me, a notary public in
and for said State, personally appeared ________________, known to me to be a
_____________ of Bear Stearns Asset Backed Securities I LLC, that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

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

                                                  _____________________________
                                                   Notary Public

[SEAL]

                                      J-9
<PAGE>

STATE OF TEXAS             )
                           ) ss:
COUNTY OF DALLAS           )

                  On the ______ day of July 2004 before me, a notary public in
and for said State, personally appeared ________________, known to me to be a
__________________ of EMC Mortgage Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                                  _____________________________
                                                   Notary Public

[Notarial Seal]

                                      J-10
<PAGE>

STATE OF MARYLAND            )
                             ) ss:
COUNTY OF  HOWARD            )

                  On the ______ day of July 2004 before me, a notary public in
and for said State, personally appeared ____________, known to me to be a of
Wells Fargo Bank, National Association, one of the national associations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said national association, and acknowledged to me that
such national association 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]

                                      J-11
<PAGE>

                       EXHIBIT ONE TO CUSTODIAL AGREEMENT

                     FORM OF CUSTODIAN INITIAL CERTIFICATION

                                             July 30, 2004

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, MA 02110

EMC Mortgage Corporation
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038

Attention: Bear Stearns Asset Backed Securities I LLC, Series 2004-AC4

          Re:  Custodial Agreement, dated as of July 30, 2004, by and among U.S.
               Bank National Association, Wells Fargo Bank, National
               Association, Bear Stearns Asset Backed Securities I LLC and EMC
               Mortgage Corporation relating to Bear Stearns Asset Backed
               Securities I Trust 2004-AC4, Asset-Backed Certificates, Series
               2004-AC4
               --------------------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3(a) of the above-captioned
Custodial Agreement, and subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File (which contains an original Mortgage Note or lost note
affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.

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

                                        WELLS FARGO BANK, NATIONAL ASSOCIATION

                                        By: _________________________________
                                        Name: _______________________________
                                        Title: ______________________________

                                      J-1-1
<PAGE>

                       EXHIBIT TWO TO CUSTODIAL AGREEMENT

                     FORM OF CUSTODIAN INTERIM CERTIFICATION

                                            ____________, 2004

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, MA 02100

EMC Mortgage Corporation
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038

Attention: Bear Stearns Asset Backed Securities I LLC, Series 2004-AC4

          Re:  Custodial Agreement, dated as of July 30, 2004, by and among U.S.
               Bank National Association, Wells Fargo Bank, National
               Association, Bear Stearns Asset Backed Securities I LLC and EMC
               Mortgage Corporation relating to Bear Stearns Asset Backed
               Securities I Trust 2004-AC4, Asset-Backed Certificates, Series
               2004-AC4
               --------------------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3(b) of the above-captioned
Custodial Agreement and subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

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

                                        WELLS FARGO BANK, NATIONAL ASSOCIATION

                                        By: _________________________________
                                        Name: _______________________________
                                        Title: ______________________________

                                      J-2-1
<PAGE>

[TPW: NYLEGAL:239495.3] 17297-00203  08/09/2004 3:29 PM
                      EXHIBIT THREE TO CUSTODIAL AGREEMENT

                      FORM OF CUSTODIAN FINAL CERTIFICATION

                                                  ____________, 2004

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, MA 02110

EMC Mortgage Corporation
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038

Attention: Bear Stearns Asset Backed Securities I LLC, Series 2004-AC4

          Re:  Custodial Agreement, dated as of July 30, 2004, by and among U.S.
               Bank National Association, Wells Fargo Bank, National
               Association, Bear Stearns Asset Backed Securities I LLC and EMC
               Mortgage Corporation relating to Bear Stearns Asset Backed
               Securities I Trust 2004-AC4, Asset-Backed Certificates, Series
               2004-AC4
               --------------------------------------------------------------

                  In accordance with Section 2.3(c) of the above-captioned
Custodial Agreement and, subject to Section 2.02(b) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

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

                                        WELLS FARGO BANK, NATIONAL ASSOCIATION

                                        By: _________________________________
                                        Name: _______________________________
                                        Title: ______________________________

                                      J-3-1

<PAGE>

                                    EXHIBIT K

                          FORM OF COMPANY CERTIFICATION

         This certificate is being delivered pursuant to Section 3.13 of the
Pooling and Servicing Agreement, dated as of July 1, 2004 (the "Agreement"),
among Bear Stearns Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation (the "Company"), as seller and servicer, Wells Fargo Bank, National
Association, as master servicer and securities administrator, and U.S. Bank
National Association, as trustee. Capitalized terms used herein and not
otherwise defined have the meanings set forth in the Agreement.

         I certify that:

         (i)      I am a ____________________ of the Company.

         (ii)     Based on my knowledge, the information in the annual statement
                  of compliance furnished in July 20__ pursuant to Section
                  3.13(b) of the Agreement and the annual independent certified
                  public accountants' servicing report delivered pursuant to
                  Section 3.14 thereof (collectively, the "Reports"), and all
                  servicing reports, officer's certificates and other
                  information relating to the EMC Mortgage Loans submitted to
                  the Master Servicer taken as a whole, does not contain any
                  untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading as of the date of this certification.

         (iii)    The servicing information required to be provided to the
                  Master Servicer by the Company under the Agreement has been
                  provided to the Master Servicer.

         (iv)     I am responsible for reviewing the servicing activities
                  performed by the Company pursuant to this Agreement, and
                  except as disclosed in the Reports, the Company has, as of the
                  date of this certification, fulfilled its obligations under
                  the Agreement.

         (v)      I have disclosed to the Master Servicer all significant
                  deficiencies relating to the Company's compliance with the
                  minimum servicing standards in accordance with a review
                  conducted in compliance with the Uniform Single Attestation
                  Program for Mortgage Bankers or similar standard as set forth
                  in the Agreement.

______________________
Dated: July __, 20__

                                      K-1
<PAGE>

                                    EXHIBIT L

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                  MORTGAGE LOAN PURCHASE AGREEMENT, dated as of July 30, 2004,
as amended and supplemented by any and all amendments hereto (collectively,
"THIS AGREEMENT"), by and between EMC MORTGAGE CORPORATION, a Delaware
corporation (the "MORTGAGE LOAN SELLER") and BEAR STEARNS ASSET BACKED
SECURITIES I LLC, a Delaware limited liability company (the "PURCHASER").

                  Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, fixed rate, first lien mortgage loans secured by
one- to four-family residences (collectively, the "MORTGAGE LOANS") as described
herein. The Purchaser intends to deposit the Mortgage Loans into a trust fund
(the "TRUST FUND") and create Bear Stearns Asset Backed Securities I Trust
2004-AC4, Asset-Backed Certificates, Series 2004-AC4 (the "CERTIFICATES"), under
a pooling and servicing agreement, to be dated as of July 1, 2004 (the "POOLING
AND SERVICING AGREEMENT"), among the Purchaser, as Purchaser, the Mortgage Loan
Seller, as seller and company, Wells Fargo Bank, National Association, as master
servicer (the "MASTER SERVICER") and as securities administrator and U.S. Bank
National Association, as trustee (the "TRUSTEE").

                  The Purchaser has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Number
333-113636) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "SECURITIES ACT"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "PUBLIC OFFERING"), as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the "REGISTRATION STATEMENT" and the
"PROSPECTUS," respectively. The "PROSPECTUS SUPPLEMENT" shall mean that
supplement, dated July 29, 2004, to the Prospectus, dated April 26, 2004,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, the Purchaser and Bear, Stearns
& Co. Inc. ("BEAR STEARNS") have entered into a terms agreement, dated as of
July 29, 2004, to an underwriting agreement, dated April 28, 2004, between the
Purchaser and Bear Stearns (collectively, the "UNDERWRITING AGREEMENT").

                  Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:

                  SECTION 1. DEFINITIONS. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:

                  ACQUISITION PRICE: Cash in an amount equal to $  *  (plus $ in
accrued interest).

                                       L-1
<PAGE>

                  BEAR STEARNS: Bear, Stearns & Co. Inc.

                  CLOSING DATE: July 30, 2004.

                  CUSTODIAL AGREEMENT: An agreement dated as of July 30, 2004
among the Depositor, the Seller, the Trustee and the Custodian.

                  CUT-OFF DATE BALANCE: Shall mean approximately $455,910,555.

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

                  DUE DATE: With respect to each Mortgage Loan, the date in each
month on which its scheduled payment is due, as set forth in the related
Mortgage Note.

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

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

                  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.

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

                  MORTGAGE:  The  mortgage or deed of trust  creating a first
lien on an interest in real  property securing a Mortgage Note.

                  MORTGAGE FILE: The items referred to in EXHIBIT 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.

                  MORTGAGE RATE: The annual rate of interest borne by a Mortgage
Note as stated therein.

                  MORTGAGOR: The obligor(s) on a Mortgage Note.

                  NET MORTGAGE RATE: For each Mortgage Loan, the Mortgage Rate
for such Mortgage Loan less (i) the Master Servicing Fee Rate, (ii) the
Servicing Fee Rate and (ii) the rate at which the LPMI Fee is calculated, if
applicable.

                  OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.

                  PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

                                       L-2
<PAGE>

* Please contact Bear Stearns for this information.

                  PURCHASE PRICE: With respect to any Mortgage Loan required to
be purchased by the Mortgage Loan Seller pursuant to the applicable provisions
of this Agreement, an amount equal to the sum of (i) 100% of the principal
remaining unpaid on such Mortgage Loan as of the date of purchase (including if
a foreclosure has already occurred, the principal balance of the related
Mortgage Loan at the time the Mortgaged Property was acquired), (ii) accrued and
unpaid interest thereon at the Mortgage Rate through and including the last day
of the month of purchase and (iii) any costs and damages (if any) incurred by
the Trust in connection with any violation of such Mortgage Loan of any
predatory lending laws.

                  RATING AGENCIES: Standard & Poor's and Moody's, each a "RATING
AGENCY."

                  REPLACEMENT MORTGAGE LOAN: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.

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

                  STANDARD & POOR'S: Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. or its successors in interest.

                  VALUE: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.

                  WELLS FARGO: Wells Fargo Bank, National Association.

                  SECTION 2. PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED
RIGHTS. (a)Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.

                  (b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificates will take place on
the Closing Date at the office of the Purchaser's counsel in New York, New York
or such other place as the parties shall agree.

                  (c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Mortgage Loan Seller.

                  (d) In addition to the foregoing, on the Closing Date the
Mortgage Loan Seller assigns to the Purchaser all of its right, title and
interest in the Servicing Agreements.

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<PAGE>

                  SECTION 3. MORTGAGE LOAN SCHEDULES. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "Preliminary Mortgage Loan Schedule") setting forth
the information listed on Exhibit 3 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "Final
Mortgage Loan Schedule") setting forth the information listed on Exhibit 3 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "Amendment"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.

                  SECTION 4. MORTGAGE LOAN TRANSFER.

                  (a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereof. The Mortgage
Loan Seller will be entitled to all scheduled payments of principal and interest
on the Mortgage Loans due on or before the Cut-off Date (including payments
collected after the Cut-off Date) and all payments thereof. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.

                  (b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Trustee or the Custodian on behalf of the Trustee by the
Closing Date or such later date as is agreed to by the Purchaser and the
Mortgage Loan Seller (each of the Closing Date and such later date is referred
to as a "MORTGAGE FILE DELIVERY DATE"), the items of each Mortgage File,
PROVIDED, HOWEVER, that in lieu of the foregoing, the Mortgage Loan Seller may
deliver the following documents, under the circumstances set forth below: (x) in
lieu of the original Mortgage, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will upon
receipt of recording information relating to the Mortgage required to be
included thereon, be delivered to recording offices for recording and have not
been returned in time to permit their delivery as specified above, the Mortgage
Loan Seller may deliver a true copy thereof with a certification by the Mortgage
Loan Seller or the Master Servicer, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the original, which has
been transmitted for recording;" (y) in lieu of the Mortgage, assignments to the
Trustee or intervening assignments thereof, if the applicable jurisdiction
retains the originals of such documents or if the originals are lost (in each
case, as evidenced by a certification from the Mortgage Loan Seller or the
Master Servicer to such effect), the Mortgage Loan Seller may deliver
photocopies of such documents containing an

                                       L-4
<PAGE>

original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Trustee on the Closing Date and attached hereto as EXHIBIT
6 the Mortgage Loan Seller may deliver lost note affidavits and indemnities of
the Mortgage Loan Seller; and provided further, however, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off Date and prior
to the Closing Date, the Mortgage Loan Seller, in lieu of delivering the above
documents, may deliver to the Trustee a certification by the Mortgage Loan
Seller or the Master Servicer to such effect. The Mortgage Loan Seller shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) or such certified copies to the
Trustee, or the Custodian on behalf of the Trustee, promptly after they are
received. The Mortgage Loan Seller shall cause the Mortgage and intervening
assignments, if any, and the assignment of the Mortgage to be recorded not later
than 180 days after the Closing Date unless such assignment is not required to
be recorded under the terms set forth in Section 6(a) hereof.

                  (c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System to indicate that such Mortgage Loans have
been assigned by the Mortgage Loan Seller to the Purchaser and by the Purchaser
to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Mortgage Loan Seller further agrees
that it will not, and will not permit any Servicer or the Master Servicer to,
and the Master Servicer agrees that it will not, alter the codes referenced in
this paragraph with respect to any Mortgage Loan during the term of the Pooling
and Servicing Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of the Pooling and Servicing Agreement.

                  (d) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans and the related servicing (other than
the servicing rights with respect to the the HSBC Loans and the SouthTrust
Loans), will ultimately be assigned to U.S. Bank National Association, as
Trustee for the Certificateholders, on the date hereof.

                  SECTION 5. EXAMINATION OF MORTGAGE FILES.

                  (a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Trustee or the Mortgage
Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that the
Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Mortgage Loan Seller's
compliance with the delivery and recordation requirements of this Agreement and
the Pooling and Servicing Agreement. In addition, upon request of the Purchaser,

                                       L-5
<PAGE>

the Mortgage Loan Seller agrees to provide to the Purchaser, Bear Stearns and to
any investors or prospective investors in the Certificates information regarding
the Mortgage Loans and their servicing, to make the Mortgage Files available to
the Purchaser, Bear Stearns and to such investors or prospective investors
(which may be at the offices of the Mortgage Loan Seller and/or the Mortgage
Loan Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear Stearns and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear Stearns and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.

                  (b) Pursuant to the Pooling and Servicing Agreement, on the
Closing Date the Trustee (or the Custodian as obligated under the Custodial
Agreement), for the benefit of the Certificateholders, will review items of the
Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage Loan
Seller an initial certification in the form attached as Exhibit One to the
Custodial Agreement.

                  (c) Within 90 days of the Closing Date, the Trustee or the
Custodian on its behalf shall, in accordance with the provisions of Section 2.02
of the Pooling and Servicing Agreement, deliver to the Seller and the Trustee an
Interim Certification in the form attached as Exhibit Two to the Custodial
Agreement to the effect that all such documents have been executed and received
and that such documents relate to the Mortgage Loans identified on the Mortgage
Loan Schedule, except for any exceptions listed on Schedule A attached to such
Interim Certification. The Custodian shall be under no duty or obligation to
inspect, review or examine said documents, instruments, certificates or other
papers to determine that the same are genuine, enforceable, or appropriate for
the represented purpose or that they have actually been recorded or that they
are other than what they purport to be on their face.

                  (d) The Trustee or the Custodian on its behalf will review the
Mortgage Files within 180 days of the Closing Date and will deliver to the
Mortgage Loan Seller and the Master Servicer, and if reviewed by the Custodian,
the Trustee, a final certification substantially in the form of Exhibit Three to
the Custodial Agreement. If the Trustee or the Custodian on its behalf is unable
to deliver a final certification with respect to the items listed in EXHIBIT 1
due to any document that is missing, has not been executed, is unrelated,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in the Final Mortgage Loan
Schedule (a "MATERIAL DEFECT"), the Trustee or the Custodian on its behalf shall
notify the Mortgage Loan Seller of such Material Defect. The Mortgage Loan
Seller shall correct or cure any such Material Defect within 90 days from the
date of notice from the Trustee of the Material Defect and if the Mortgage Loan
Seller does not correct or cure such Material Defect within such period and such
defect materially and adversely affects the interests of the Certificateholders
in the related Mortgage Loan, the Mortgage Loan Seller will, in accordance with
the terms of the Pooling and Servicing Agreement, within 90 days of the date of
notice, provide the Trustee with a Replacement Mortgage Loan (if within two
years of the Closing Date) or purchase the related Mortgage Loan at the
applicable Purchase Price; PROVIDED, HOWEVER, that if such defect relates solely
to the inability of the Mortgage Loan Seller to deliver the original security
instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan if

                                       L-6
<PAGE>

the Mortgage Loan Seller delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing
Date. The foregoing repurchase obligation shall not apply in the event that the
Mortgage Loan Seller cannot deliver such original or copy of any document
submitted for recording to the appropriate recording office in the applicable
jurisdiction because such document has not been returned by such office;
provided that the Mortgage Loan Seller shall instead deliver a recording receipt
of such recording office or, if such receipt is not available, a certificate of
Mortgage Loan Seller or a Servicing Officer confirming that such documents have
been accepted for recording, and delivery to the Trustee shall be effected by
the Mortgage Loan Seller within thirty days of its receipt of the original
recorded document.

                  (e) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Replacement Mortgage Loan, the
related Mortgage File and any other documents and payments required to be
delivered in connection with a substitution pursuant to the Pooling and
Servicing Agreement. At the time of any purchase or substitution, the Trustee
shall (i) assign the selected Mortgage Loan to the Mortgage Loan Seller and
shall release or cause the Custodian to release the documents (including, but
not limited to the Mortgage, Mortgage Note and other contents of the Mortgage
File) in the possession of the Trustee or the Custodian, as applicable relating
to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Mortgage Loan Seller title to such Deleted Mortgage Loan.

                  SECTION 6. RECORDATION OF ASSIGNMENTS OF MORTGAGE.

                  (a) The Mortgage Loan Seller will, promptly after the Closing
Date, cause each Mortgage and each assignment of Mortgage from the Mortgage Loan
Seller to the Trustee, and all unrecorded intervening assignments, if any,
delivered on or prior to the Closing Date, to be recorded in all recording
offices in the jurisdictions where the related Mortgaged Properties are located;
PROVIDED, HOWEVER, the Mortgage Loan Seller need not cause to be recorded any
assignment which relates to a Mortgage Loan that is a MOM Loan or for which the
related Mortgaged Property is located in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel delivered by the Mortgage Loan
Seller to the Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan; PROVIDED, HOWEVER, notwithstanding the delivery of any Opinion of
Counsel, each assignment of Mortgage shall be submitted for recording by the
Mortgage Loan Seller in the manner described above, at no expense to the Trust
Fund or Trustee, upon the earliest to occur of (i) reasonable direction by the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 25% of the Trust, (ii) the occurrence of a Company Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgage
Loan Seller under the Pooling and Servicing Agreement, (iv) the occurrence of a
servicing transfer as described in Section 9.05 of the Pooling and Servicing
Agreement or an assignment of the servicing as described in Section 8.05(b) of
the Pooling and Servicing Agreement or (iv) with respect to any one assignment
of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Mortgagor under the related Mortgage.

                  While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee or the Custodian on its

                                       L-7
<PAGE>

behalf a certified copy of such Mortgage or assignment. In the event that,
within 180 days of the Closing Date, the Trustee has not been provided with an
Opinion of Counsel as described above or received evidence of recording with
respect to each Mortgage Loan delivered to the Purchaser pursuant to the terms
hereof or as set forth above and the related Mortgage Loan is not a MOM Loan,
the failure to provide evidence of recording or such Opinion of Counsel shall be
considered a Material Defect, and the provisions of Section 5(c) and (d) shall
apply. All customary recording fees and reasonable expenses relating to the
recordation of the assignments of mortgage to the Trustee or the Opinion of
Counsel, as the case may be, shall be borne by the Mortgage Loan Seller.

                  (b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a debt or
other obligation of the Mortgage Loan Seller. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held by a
court to continue to be property of the Mortgage Loan Seller, then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the applicable Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Mortgage Loan Seller to the Purchaser of a security interest in all of the
Mortgage Loan Seller's right, title and interest in and to the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in accordance with
the terms thereof and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, to the
extent the Purchaser would otherwise be entitled to own such Mortgage Loans and
proceeds pursuant to Section 4 hereof, including all amounts, other than
investment earnings, from time to time held or invested in any accounts created
pursuant to the Pooling and Servicing Agreement, whether in the form of cash,
instruments, securities or other property; (c) the possession by the Purchaser
or the Trustee (or the Custodian on its behalf) of Mortgage Notes and such other
items of property as constitute instruments, money, negotiable documents or
chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 (or
comparable provision) of the applicable Uniform Commercial Code; and (d)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to any provision hereof or
pursuant to the Pooling and Servicing Agreement shall also be deemed to be an
assignment of any security interest created hereby. The Mortgage Loan Seller and
the Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be reasonably necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Pooling and Servicing Agreement.

                  SECTION 7. REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN
SELLER CONCERNING THE MORTGAGE LOANS. The Mortgage Loan Seller hereby represents
and warrants to

                                       L-8
<PAGE>

the Purchaser as of the Closing Date or such other date as may be specified
below with respect to each Mortgage Loan being sold by it:

                  (a) The information set forth in the Mortgage Loan Schedule on
the Closing Date is complete, true and correct.

                  (b) All payments required to be made prior to the Cut-off Date
with respect to each Mortgage Loan have been made and no Mortgage Loan is
delinquent thirty one or more days; and the Mortgage Loan Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
from a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required under
any Mortgage Loan.

                  (c) Except with respect to taxes, insurance and other amounts
previously advanced by a prior servicer with respect to any Mortgage Loan, to
the best of the Mortgage Loan Seller's knowledge, there are no delinquent taxes,
water charges, sewer rents, assessments, insurance premiums, leasehold payments,
including assessments payable in future installments, or other outstanding
charges affecting the related Mortgaged Property.

                  (d) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which in the case of the Mortgage Loans are in the Mortgage File and
have been or will be recorded, if necessary to protect the interests of the
Trustee, and which have been or will be delivered to the Trustee, all in
accordance with this Agreement. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required by
the related policy. No Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the title insurer, to the
extent required by the policy, and which assumption agreement in the case of the
Mortgage Loans is part of the Mortgage File.

                  (e) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto.

                  (f) All buildings upon, or comprising part of, the Mortgaged
Property are insured by an insurer acceptable to Fannie Mae and Freddie Mac
against loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, and such insurer
is licensed to do business in the state where the Mortgaged Property is located.
All such insurance policies contain a standard mortgagee clause naming the
originator, its successors and assigns as mortgagee and Mortgage Loan Seller has
received no notice that all premiums thereon have not been paid. If upon
origination of the Mortgage Loan, the Mortgaged Property was, or was
subsequently deemed to be, in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available), which require under applicable law
that a flood insurance policy meeting the requirements of the current guidelines
of the Federal

                                       L-9
<PAGE>

Insurance Administration (or any successor thereto) be obtained, such flood
insurance policy is in effect which policy is with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
Stated Principal Balance of the related Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis, or (C)
the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at Mortgagor's cost and expense and, on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at Mortgagor's cost and expense and to obtain reimbursement
therefor from the Mortgagor.

                  (g) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real estate
settlement procedures including, the Real Estate Settlement Procedures Act of
1974, as amended, consumer credit protection, equal credit opportunity or
disclosure and reporting laws and all predatory lending laws applicable to the
Mortgage Loan have been complied with in all material respects.

                  (h) The Mortgage has not been satisfied, canceled,
subordinated, or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such release, cancellation,
subordination or rescission.

                  (i) The Mortgage is a valid, existing and enforceable first
lien on the Mortgaged Property, including all improvements on the Mortgaged
Property, if any, subject only to (1) the lien of current real property taxes
and assessments not yet due and payable, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record as
of the date of recording being acceptable to mortgage lending institutions
generally and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not adversely
affect the Appraised Value of the Mortgaged Property and (3) other matters to
which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage. The
Mortgage Loan Seller has full right to sell and assign the Mortgage to the
Purchaser.

                  (j) The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or reorganization or general principles
of equity.

                  (k) All parties to the Mortgage Note and the Mortgage had the
legal capacity to enter into the Mortgage Loan transaction and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties.

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

                                       L-10
<PAGE>
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage.

                  (m) Immediately prior to the conveyance of the Mortgage Loans
by the Mortgage Loan Seller to the Purchaser hereunder, the Mortgage Loan Seller
was the sole owner and holder of the Mortgage Loan; the related Originator or
the Mortgage Loan Seller or the applicable Servicer was the custodian of the
related escrow account, if applicable; the Mortgage Loan had neither been
assigned nor pledged, and the Mortgage Loan Seller had good and marketable title
thereto, and had full right to transfer and sell the Mortgage Loan and the
related servicing rights to the Purchaser free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest subject to the
applicable Servicing Agreement and had full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell and
assign the Mortgage Loan and the related servicing rights, subject to the
applicable Servicing Agreement, to the Purchaser pursuant to the terms of this
Agreement.

                  (n) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (1) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2) organized under the laws of such
state, qualified to do business in such state, a federal savings and loan
association or national bank having principal offices in such state or not
deemed to be doing business in such state under applicable law.

                  (o) The Mortgage Loan is covered by an ALTA lender's title
insurance policy or equivalent form acceptable to the Department of Housing and
Urban Development, or any successor thereto, and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in clause (i) above) the Mortgage Loan Seller (as
assignee), its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan. Additionally,
such lender's title insurance policy affirmatively insures ingress and egress,
and against encroachments by or upon the Mortgaged Property or any interest
therein. With respect to each Mortgage Loan, the Mortgage Loan Seller (as
assignee) is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect. No claims have been
made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Mortgage Loan Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy.

                  (p) Except as provided in clause (b), immediately prior to the
Cut-off Date, there was no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and there was no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration,
and the Mortgage Loan Seller has not waived any default, breach, violation or
event of acceleration.

                  (q) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such

                                       L-11

<PAGE>

lien) affecting the related Mortgaged Property which are or may be liens prior
to or equal with, the lien of the related Mortgage.

                  (r) All improvements which were considered in any appraisal
which was used in determining the Appraised Value of the related Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property.

                  (s) The origination, servicing and collection practices with
respect to each Mortgage Note and Mortgage including, the establishment,
maintenance and servicing of the escrow accounts and escrow payments, if any,
since origination, have been conducted in all respects in accordance with the
terms of Mortgage Note and in compliance with all applicable laws and
regulations and, unless otherwise required by law or Fannie Mae/Freddie Mac
standards, in accordance with the proper, prudent and customary practices in the
mortgage origination and servicing business. With respect to the escrow accounts
and escrow payments, if any, and an EMC Mortgage Loan all such payments are in
the possession or under the control of the Mortgage Loan Seller (including
pursuant to a Subservicing Agreement) and there exists no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. Any interest required to be paid pursuant to state and local law
has been properly paid and credited.

                  (t) The Mortgaged Property is free of material damage and
waste and there is no proceeding pending for the total or partial condemnation
thereof.

                  (u) The Mortgage contains customary and enforceable provisions
to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
intended to be provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. The Mortgagor has not notified the Mortgage
Loan Seller and the Mortgage Loan Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act.

                  (v) The Mortgage Note is not and has not been secured by any
collateral except the lien of the applicable Mortgage.

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

                  (x) No Mortgage Loan contains a permanent or temporary
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan.

                                       L-12
<PAGE>

                  (y) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of the Mortgage Loan.

                  (z) No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property.

                  (aa) To the best of Mortgage Loan Seller's knowledge, the
Mortgaged Property is lawfully occupied under applicable law and all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy, have been made or obtained from the appropriate authorities.

                  (bb) The assignment of Mortgage with respect to a Mortgage
Loan is in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.

                  (cc) The Mortgaged Property consists of a single parcel of
real property with or without a detached single family residence erected
thereon, or an individual condominium unit, or a 2-4 family dwelling, or an
individual unit in a planned unit development as defined by Fannie Mae or a
townhouse, each structure of which is permanently affixed to the Mortgaged
Property, and is legally classified as real estate.

                  (dd) Each Mortgage Loan at the time of origination was
underwritten in general in accordance with guidelines not inconsistent with the
guidelines set forth in the Prospectus Supplement and generally accepted credit
underwriting guidelines.

                  (ee) No error, omission, misrepresentation, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Mortgage Loan Seller or the related Originator.

                  (ff) None of the Mortgage Loans are (a) loans subject to 12
CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the
regulation implementing TILA, which implements the Home Ownership and Equity
Protection Act of 1994 ("HOEPA") or (b) classified and/or defined as a "high
cost home loan" under any federal, state, or local law, including, but not
limited to, the States of Georgia or North Carolina.

                  (gg) None of the Mortgage Loans originated on or after October
1, 2002 and before March 7, 2003 was secured by property located in the State of
Georgia.

                  (hh) Each Prepayment Charge is enforceable and was originated
in compliance with all applicable federal, state and local laws.

                  (ii) At the time of origination, each Mortgaged Property was
the subject of an appraisal which conformed to the underwriting requirements of
the originator of the Mortgage Loan and, the appraisal is in a form acceptable
to Fannie Mae or FHLMC.

                                       L-13

<PAGE>

                  (jj) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in Appendix E of the Standard & Poor's
Glossary For File Format For LEVELS(R) Version 5.6 Revised attached hereto as
Exhibit 7).

                  It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Replacement Mortgage Loan as of the date of
substitution.

                  Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser or the Trustee of a breach of any representation or
warranty of the Mortgage Loan Seller set forth in this Section 7 which
materially and adversely affects the value of the interests of the Purchaser,
the Certificateholders or the Trustee in any of the Mortgage Loans delivered to
the Purchaser pursuant to this Agreement, the party discovering or receiving
notice of such breach shall give prompt written notice to the others. In the
case of any such breach of a representation or warranty set forth in this
Section 7, within 90 days from the date of discovery by the Mortgage Loan
Seller, or the date the Mortgage Loan Seller is notified by the party
discovering or receiving notice of such breach (whichever occurs earlier), the
Mortgage Loan Seller will (i) cure such breach in all material respects, (ii)
purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Replacement
Mortgage Loan in exchange for such Mortgage Loan; provided that, (A) in the case
of a breach of the representation and warranty concerning the Mortgage Loan
Schedule contained in clause (a) of this Section 7, if such breach is material
and relates to any field on the Mortgage Loan Schedule which identifies any
Prepayment Charge or (B) in the case of a breach of the representation contained
in clause(hh)of this Section 7, then, in each case, in lieu of purchasing such
Mortgage Loan from the Trust Fund at the Purchase Price, the Mortgage Loan
Seller shall pay the amount of the Prepayment Charge (net of any amount
previously collected by or paid to the Trust Fund in respect of such Prepayment
Charge) from its own funds and without reimbursement therefor, and the Mortgage
Loan Seller shall have no obligation to repurchase or substitute for such
Mortgage Loan. The obligations of the Mortgage Loan Seller to cure, purchase or
substitute a qualifying Replacement Mortgage Loan shall constitute the
Purchaser's, the Trustee's and the Certificateholder's sole and exclusive remedy
under this Agreement or otherwise respecting a breach of representations or
warranties hereunder with respect to the Mortgage Loans, except for the
obligation of the Mortgage Loan Seller to indemnify the Purchaser for such
breach as set forth in and limited by Section 13 hereof.

                  Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Replacement Mortgage Loan pursuant to the terms hereof.

                                       L-14
<PAGE>

                  SECTION 8. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:

               (a) the Mortgage Loan Seller (i) is a corporation duly organized,
          validly existing and in good standing under the laws of the State of
          Delaware and (ii) is qualified and in good standing to do business in
          each jurisdiction where such qualification is necessary, except where
          the failure so to qualify would not reasonably be expected to have a
          material adverse effect on the Mortgage Loan Seller's business as
          presently conducted or on the Mortgage Loan Seller's ability to enter
          into this Agreement and to consummate the transactions contemplated
          hereby;

               (b) ]the Mortgage Loan Seller has full power to own its property,
          to carry on its business as presently conducted and to enter into and
          perform its obligations under this Agreement;

               (c) the execution and delivery by the Mortgage Loan Seller of
          this Agreement have been duly authorized by all necessary action on
          the part of the Mortgage Loan Seller; and neither the execution and
          delivery of this Agreement, nor the consummation of the transactions
          herein contemplated, nor compliance with the provisions hereof, will
          conflict with or result in a breach of, or constitute a default under,
          any of the provisions of any law, governmental rule, regulation,
          judgment, decree or order binding on the Mortgage Loan Seller or its
          properties or the charter or by-laws of the Mortgage Loan Seller,
          except those conflicts, breaches or defaults which would not
          reasonably be expected to have a material adverse effect on the
          Mortgage Loan Seller's ability to enter into this Agreement and to
          consummate the transactions contemplated hereby;

               (d) the execution, delivery and performance by the Mortgage Loan
          Seller of this Agreement and the consummation of the transactions
          contemplated hereby do not require the consent or approval of, the
          giving of notice to, the registration with, or the taking of any other
          action in respect of, any state, federal or other governmental
          authority or agency, except those consents, approvals, notices,
          registrations or other actions as have already been obtained, given or
          made and, in connection with the recordation of the Mortgages, powers
          of attorney or assignments of Mortgages not yet completed;

               (e) this Agreement has been duly executed and delivered by the
          Mortgage Loan Seller and, assuming due authorization, execution and
          delivery by the Purchaser, constitutes a valid and binding obligation
          of the Mortgage Loan Seller enforceable against it in accordance with
          its terms (subject to applicable bankruptcy and insolvency laws and
          other similar laws affecting the enforcement of the rights of
          creditors generally);

               (f) there are no actions, suits or proceedings pending or, to the
          knowledge of the Mortgage Loan Seller, threatened against the Mortgage
          Loan Seller, before or by any court, administrative agency, arbitrator
          or governmental body (i) with respect to any of the transactions
          contemplated by this Agreement or (ii) with respect to any other
          matter which in the judgment of the Mortgage Loan Seller will be
          determined adversely to the Mortgage Loan Seller and will if
          determined adversely to the Mortgage Loan Seller

                                       L-15
<PAGE>

          materially and adversely affect the Mortgage Loan Seller's ability to
          perform its obligations under this Agreement; and the Mortgage Loan
          Seller is not in default with respect to any order of any court,
          administrative agency, arbitrator or governmental body so as to
          materially and adversely affect the transactions contemplated by this
          Agreement; and

               (g) the Mortgage Loan Seller's Information (as defined in Section
          13(a) hereof) does not include any untrue statement of a material fact
          or omit to state a material fact necessary in order to make the
          statements made, in light of the circumstances under which they were
          made, not misleading.

                  SECTION 9. REPRESENTATIONS AND WARRANTIES CONCERNING THE
PURCHASER. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:

               (a) the Purchaser (i) is a limited liability company duly
          organized, validly existing and in good standing under the laws of the
          State of Delaware and (ii) is qualified and in good standing to do
          business in each jurisdiction where such qualification is necessary,
          except where the failure so to qualify would not reasonably be
          expected to have a material adverse effect on the Purchaser's business
          as presently conducted or on the Purchaser's ability to enter into
          this Agreement and to consummate the transactions contemplated hereby;

               (b) the Purchaser has full power to own its property, to carry on
          its business as presently conducted and to enter into and perform its
          obligations under this Agreement;

               (c) the execution and delivery by the Purchaser of this Agreement
          have been duly authorized by all necessary action on the part of the
          Purchaser; and neither the execution and delivery of this Agreement,
          nor the consummation of the transactions herein contemplated, nor
          compliance with the provisions hereof, will conflict with or result in
          a breach of, or constitute a default under, any of the provisions of
          any law, governmental rule, regulation, judgment, decree or order
          binding on the Purchaser or its properties or the certificate of
          formation or limited liability company agreement of the Purchaser,
          except those conflicts, breaches or defaults which would not
          reasonably be expected to have a material adverse effect on the
          Purchaser's ability to enter into this Agreement and to consummate the
          transactions contemplated hereby;

               (d) the execution, delivery and performance by the Purchaser of
          this Agreement and the consummation of the transactions contemplated
          hereby do not require the consent or approval of, the giving of notice
          to, the registration with, or the taking of any other action in
          respect of, any state, federal or other governmental authority or
          agency, except those consents, approvals, notices, registrations or
          other actions as have already been obtained, given or made;

               (e) this Agreement has been duly executed and delivered by the
          Purchaser and, assuming due authorization, execution and delivery by
          the Mortgage Loan Seller, constitutes a valid and binding obligation
          of the Purchaser enforceable against it in

                                      L-16

<PAGE>

          accordance with its terms (subject to applicable bankruptcy and
          insolvency laws and other similar laws affecting the enforcement of
          the rights of creditors generally);

               (f) there are no actions, suits or proceedings pending or, to the
          knowledge of the Purchaser, threatened against the Purchaser, before
          or by any court, administrative agency, arbitrator or governmental
          body (i) with respect to any of the transactions contemplated by this
          Agreement or (ii) with respect to any other matter which in the
          judgment of the Purchaser will be determined adversely to the
          Purchaser and will if determined adversely to the Purchaser materially
          and adversely affect the Purchaser's ability to perform its
          obligations under this Agreement; and the Purchaser is not in default
          with respect to any order of any court, administrative agency,
          arbitrator or governmental body so as to materially and adversely
          affect the transactions contemplated by this Agreement; and

               (g) the Purchaser's Information (as defined in Section 13(b)
          hereof) does not include any untrue statement of a material fact or
          omit to state a material fact necessary in order to make the
          statements made, in light of the circumstances under which they were
          made, not misleading.

                  SECTION 10. CONDITIONS TO CLOSING.

               (a) The obligations of the Purchaser under this Agreement will be
          subject to the satisfaction, on or prior to the Closing Date, of the
          following conditions:

                    (1) Each of the obligations of the Mortgage Loan Seller
          required to be performed at or prior to the Closing Date pursuant to
          the terms of this Agreement shall have been duly performed and
          complied with in all material respects; all of the representations and
          warranties of the Mortgage Loan Seller under this Agreement shall be
          true and correct as of the date or dates specified in all material
          respects; and no event shall have occurred which, with notice or the
          passage of time, would constitute a default under this Agreement or
          the Pooling and Servicing Agreement; and the Purchaser shall have
          received certificates to that effect signed by authorized officers of
          the Mortgage Loan Seller.

                    (2) The Purchaser shall have received all of the following
          closing documents, in such forms as are agreed upon and reasonably
          acceptable to the Purchaser, duly executed by all signatories other
          than the Purchaser as required pursuant to the respective terms
          thereof:

                         (i) If required pursuant to Section 3 hereof, the
          Amendment dated as of the Closing Date and any documents referred to
          therein;

                         (ii) If required pursuant to Section 3 hereof, the
          Final Mortgage Loan Schedule containing the information set forth on
          EXHIBIT 3 hereto, one copy to be attached to each counterpart of the
          Amendment;

                                      L-17

<PAGE>

                         (iii) The Pooling and Servicing Agreement, in form and
          substance reasonably satisfactory to the Trustee and the Purchaser,
          and all documents required thereby duly executed by all signatories;

                         (iv) A certificate of an officer of the Mortgage Loan
          Seller dated as of the Closing Date, in a form reasonably acceptable
          to the Purchaser, and attached thereto the resolutions of the Mortgage
          Loan Seller authorizing the transactions contemplated by this
          Agreement, together with copies of the articles of incorporation,
          bylaws and certificate of good standing of the Mortgage Loan Seller;

                         (v) One or more opinions of counsel from the Mortgage
          Loan Seller's counsel otherwise in form and substance reasonably
          satisfactory to the Purchaser, the Trustee and each Rating Agency;

                         (vi) A letter from each of the Rating Agencies giving
          each Class of Certificates set forth on Schedule A hereto the rating
          set forth therein; and

                         (vii) Such other documents, certificates (including
          additional representations and warranties) and opinions as may be
          reasonably necessary to secure the intended ratings from each Rating
          Agency for the Certificates.

                    (3) The Certificates to be sold to Bear Stearns pursuant to
          the Underwriting Agreement shall have been issued and sold to Bear
          Stearns.

                    (4) The Mortgage Loan Seller shall have furnished to the
          Purchaser such other certificates of its officers or others and such
          other documents and opinions of counsel to evidence fulfillment of the
          conditions set forth in this Agreement and the transactions
          contemplated hereby as the Purchaser and its counsel may reasonably
          request.

               (b) The obligations of the Mortgage Loan Seller under this
          Agreement shall be subject to the satisfaction, on or prior to the
          Closing Date, of the following conditions:

                    (1) The obligations of the Purchaser required to be
          performed by it on or prior to the Closing Date pursuant to the terms
          of this Agreement shall have been duly performed and complied with in
          all material respects, and all of the representations and warranties
          of the Purchaser under this Agreement shall be true and correct in all
          material respects as of the date hereof and as of the Closing Date,
          and no event shall have occurred which would constitute a breach by it
          of the terms of this Agreement, and the Mortgage Loan Seller shall
          have received a certificate to that effect signed by an authorized
          officer of the Purchaser.

                    (2) The Mortgage Loan Seller shall have received copies of
          all of the following closing documents, in such forms as are agreed
          upon and reasonably acceptable to the Mortgage Loan Seller, duly
          executed by all signatories other than the Mortgage Loan Seller as
          required pursuant to the respective terms thereof:

                                      L-18

<PAGE>

                    (i) If required pursuant to Section 3 hereof, the Amendment
          dated as of the Closing Date and any documents referred to therein;

                    (ii) The Pooling and Servicing Agreement, in form and
          substance reasonably satisfactory to the Mortgage Loan Seller, and all
          documents required thereby duly executed by all signatories;

                    (iii) A certificate of an officer of the Purchaser dated as
          of the Closing Date, in a form reasonably acceptable to the Mortgage
          Loan Seller, and attached thereto the written consent of the member of
          the Purchaser authorizing the transactions contemplated by this
          Agreement and the Pooling and Servicing Agreement, together with
          copies of the Purchaser's certificate of formation, limited liability
          company agreement, and evidence as to the good standing of the
          Purchaser dated as of a recent date;

                    (iv) One or more opinions of counsel from the Purchaser's
          counsel in form and substance reasonably satisfactory to the Mortgage
          Loan Seller; and

                    (v) Such other documents, certificates (including additional
          representations and warranties) and opinions as may be reasonably
          necessary to secure the intended rating from each Rating Agency for
          the Certificates.

                  SECTION 11. FEES AND EXPENSES. Subject to Section 16 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the Certificates and the filing fee of the
Commission as in effect on the date on which the Registration Statement was
declared effective, (iv) the fees and expenses including counsel's fees and
expenses in connection with any "blue sky" and legal investment matters, (v) the
fees and expenses of the Trustee which shall include without limitation the fees
and expenses of the Trustee (and the fees and disbursements of its counsel) with
respect to (A) legal and document review of this Agreement, the Pooling and
Servicing Agreement, the Certificates and related agreements, (B) attendance at
the Closing and (C) review of the Mortgage Loans to be performed by the Trustee
or the Custodian on its behalf, (vi) the expenses for printing or otherwise
reproducing the Certificates, the Prospectus and the Prospectus Supplement,
(vii) the fees and expenses of each Rating Agency (both initial and ongoing),
(viii) the fees and expenses relating to the preparation and recordation of
mortgage assignments (including intervening assignments, if any and if
available, to evidence a complete chain of title from the originator to the
Trustee) from the Mortgage Loan Seller to the Trustee or the expenses relating
to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may
be, and (ix) Mortgage File due diligence expenses and other out-of-pocket
expenses incurred by the Purchaser in connection with the purchase of the
Mortgage Loans and by Bear Stearns in connection with the sale of the
Certificates. The Mortgage Loan Seller additionally agrees to pay directly to
any third party on a timely basis the fees provided for above which are charged
by such third party and which are billed periodically.

                                      L-19

<PAGE>

                  SECTION 12. ACCOUNTANTS' LETTERS.

                  (a) Deloitte & Touche LLP will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and
will compare those characteristics to the description of the Mortgage Loans
contained in the Prospectus Supplement under the captions "Summary--The Mortgage
Loans" and "The Mortgage Pool" and in Schedule A thereto. The Mortgage Loan
Seller will cooperate with the Purchaser in making available all information and
taking all steps reasonably necessary to permit such accountants to complete the
review and to deliver the letters required of them under the Underwriting
Agreement. Deloitte & Touche LLP will also confirm certain calculations as set
forth under the caption "Yield, Prepayment and Maturity Considerations" in the
Prospectus Supplement.

                  (b) To the extent statistical information with respect to the
Mortgage Loan Seller's servicing portfolio is included in the Prospectus
Supplement under the caption "Servicing of the Mortgage Loans--EMC--Delinquency
and Foreclosure Experience of EMC," a letter from the certified public
accountant for the Mortgage Loan Seller will be delivered to the Purchaser dated
the date of the Prospectus Supplement, in the form previously agreed to by the
Mortgage Loan Seller and the Purchaser, with respect to such statistical
information.

                  SECTION 13. INDEMNIFICATION.

                    (a) The Mortgage Loan Seller shall indemnify and hold
               harmless the Purchaser and its directors, officers and
               controlling persons (as defined in Section 15 of the Securities
               Act) from and against any loss, claim, damage or liability or
               action in respect thereof, to which they or any of them may
               become subject, under the Securities Act or otherwise, insofar as
               such loss, claim, damage, liability or action arises out of, or
               is based upon (i) any untrue statement of a material fact
               contained in the MORTGAGE LOAN SELLER'S INFORMATION as identified
               in EXHIBIT 4, the omission to state in the Prospectus Supplement
               or Prospectus (or any amendment thereof or supplement thereto
               approved by the Mortgage Loan Seller and in which additional
               Mortgage Loan Seller's Information is identified), in reliance
               upon and in conformity with Mortgage Loan Seller's Information a
               material fact required to be stated therein or necessary to make
               the statements therein in light of the circumstances in which
               they were made, not misleading, (ii) any representation or
               warranty assigned or made by the Mortgage Loan Seller in Section
               7 or Section 8 hereof being, or alleged to be, untrue or
               incorrect, or (iii) any failure by the Mortgage Loan Seller to
               perform its obligations under this Agreement; and the Mortgage
               Loan Seller shall reimburse the Purchaser and each other
               indemnified party for any legal and other expenses reasonably
               incurred by them in connection with investigating or defending or
               preparing to defend against any such loss, claim, damage,
               liability or action.

                  The foregoing indemnity agreement is in addition to any
liability which the Mortgage Loan Seller otherwise may have to the Purchaser or
any other such indemnified party.

                    (b) The Purchaser shall indemnify and hold harmless the
               Mortgage Loan Seller and its respective directors, officers and
               controlling persons (as defined in Section 15 of the Securities
               Act) from and against any loss, claim, damage or liability or
               action in respect thereof, to which they or any of them may
               become subject, under the Securities

                                      L-20

<PAGE>
               Act or otherwise, insofar as such loss, claim, damage, liability
               or action arises out of, or is based upon (i) any untrue
               statement of a material fact contained in the PURCHASER'S
               INFORMATION as identified in EXHIBIT 5, the omission to state in
               the Prospectus Supplement or Prospectus (or any amendment thereof
               or supplement thereto approved by the Purchaser and in which
               additional Purchaser's Information is identified), in reliance
               upon and in conformity with the Purchaser's Information, a
               material fact required to be stated therein or necessary to make
               the statements therein in light of the circumstances in which
               they were made, not misleading, (ii) any representation or
               warranty made by the Purchaser in Section 9 hereof being, or
               alleged to be, untrue or incorrect, or (iii) any failure by the
               Purchaser to perform its obligations under this Agreement; and
               the Purchaser shall reimburse the Mortgage Loan Seller, and each
               other indemnified party for any legal and other expenses
               reasonably incurred by them in connection with investigating or
               defending or preparing to defend any such loss, claim, damage,
               liability or action. The foregoing indemnity agreement is in
               addition to any liability which the Purchaser otherwise may have
               to the Mortgage Loan Seller, or any other such indemnified party.

                    (c) Promptly after receipt by an indemnified party under
               subsection (a) or (b) above of notice of the commencement of any
               action, such indemnified party shall, if a claim in respect
               thereof is to be made against the indemnifying party under such
               subsection, notify each party against whom indemnification is to
               be sought in writing of the commencement thereof (but the failure
               so to notify an indemnifying party shall not relieve it from any
               liability which it may have under this Section 13 except to the
               extent that it has been prejudiced in any material respect by
               such failure or from any liability which it may have otherwise).
               In case any such action is brought against any indemnified party,
               and it notifies an indemnifying party of the commencement
               thereof, the indemnifying party will be entitled to participate
               therein and, to the extent it may elect by written notice
               delivered to the indemnified party promptly (but, in any event,
               within 30 days) after receiving the aforesaid notice from such
               indemnified party, to assume the defense thereof with counsel
               reasonably satisfactory to such indemnified party.
               Notwithstanding the foregoing, the indemnified party or parties
               shall have the right to employ its or their own counsel in any
               such case, but the fees and expenses of such counsel shall be at
               the expense of such indemnified party or parties unless (i) the
               employment of such counsel shall have been authorized in writing
               by one of the indemnifying parties in connection with the defense
               of such action, (ii) the indemnifying parties shall not have
               employed counsel to have charge of the defense of such action
               within a reasonable time after notice of commencement of the
               action, or (iii) such indemnified party or parties shall have
               reasonably concluded that there is a conflict of interest between
               itself or themselves and the indemnifying party in the conduct of
               the defense of any claim or that the interests of the indemnified
               party or parties are not substantially co-extensive with those of
               the indemnifying party (in which case the indemnifying parties
               shall not have the right to direct the defense of such action on
               behalf of the indemnified party or parties), in any of which
               events such fees and expenses shall be borne by the indemnifying
               parties (PROVIDED, HOWEVER, that the indemnifying party shall be
               liable only for the fees and expenses of one counsel in addition
               to one local counsel in the jurisdiction involved. Anything in
               this subsection to the contrary notwithstanding, an indemnifying
               party shall not be liable for any settlement or any claim

                                      L-21

<PAGE>
               or action effected without its written consent; PROVIDED,
               HOWEVER, that such consent was not unreasonably withheld.

                    (d) If the indemnification provided for in paragraphs (a)
               and (b) of this Section 13 shall for any reason be unavailable to
               an indemnified party in respect of any loss, claim, damage or
               liability, or any action in respect thereof, referred to in
               Section 13, then the indemnifying party shall in lieu of
               indemnifying the indemnified party contribute to the amount paid
               or payable by such indemnified party as a result of such loss,
               claim, damage or liability, or action in respect thereof, in such
               proportion as shall be appropriate to reflect the relative
               benefits received by the Mortgage Loan Seller on the one hand and
               the Purchaser on the other from the purchase and sale of the
               Mortgage Loans, the offering of the Certificates and the other
               transactions contemplated hereunder. No person found liable for a
               fraudulent misrepresentation shall be entitled to contribution
               from any person who is not also found liable for such fraudulent
               misrepresentation.

                    (e) The parties hereto agree that reliance by an indemnified
               party on any publicly available information or any information or
               directions furnished by an indemnifying party shall not
               constitute negligence, bad faith or willful misconduct by such
               indemnified party.

                  SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, 909 Hidden Ridge Drive, Suite 200 Irving,
Texas 75038, (Telecopy: (972-444-2880)), and notices to the Purchaser shall be
directed to Bear Stearns Asset Backed Securities I LLC, 383 Madison Avenue, New
York, New York 10179, (Telecopy: (212-272-7206)), Attention: Chief Counsel; or
to any other address as may hereafter be furnished by one party to the other
party by like notice. Any such demand, notice or communication hereunder shall
be deemed to have been received on the date received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt) provided that it is received on a business day
during normal business hours and, if received after normal business hours, then
it shall be deemed to be received on the next business day.

                  SECTION 15. TRANSFER OF MORTGAGE LOANS. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Trustee without the consent of the Mortgage Loan Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; PROVIDED, HOWEVER, the Purchaser shall
remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and
as provided in Section 2(a). Notwithstanding the foregoing, the sole and
exclusive right and remedy of the Trustee with respect to a breach of
representation or warranty of the Mortgage Loan Seller shall be the cure,
purchase or substitution obligations of the Mortgage Loan Seller contained in
Sections 5 and 7 hereof.

                  SECTION 16. TERMINATION. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the

                                      L-22

<PAGE>
Mortgage Loan Seller's obligation to close set forth under Section 10(b) hereof
are not fulfilled as and when required to be fulfilled. In the event of
termination pursuant to clause (b), the Mortgage Loan Seller shall pay, and in
the event of termination pursuant to clause (c), the Purchaser shall pay, all
reasonable out-of-pocket expenses incurred by the other in connection with the
transactions contemplated by this Agreement. In the event of a termination
pursuant to clause (a), each party shall be responsible for its own expenses.

                  SECTION 17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by
the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans
to the Purchaser, the Mortgage Loan Seller's representations and warranties
contained herein with respect to the Mortgage Loans shall be deemed to relate to
the Mortgage Loans actually delivered to the Purchaser and included in the Final
Mortgage Loan Schedule and any Replacement Mortgage Loan and not to those
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to
Section 3 hereof prior to the Closing.

                  SECTION 18. SEVERABILITY. If any provision of this Agreement
shall be prohibited or invalid under applicable law, this Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.

                  SECTION 19. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.

                  SECTION 20. AMENDMENT. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.

                  SECTION 21. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.

                  SECTION 22. FURTHER ASSURANCES. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.

                  SECTION 23. SUCCESSORS AND ASSIGNS.

                  (a) This Agreement shall bind and inure to the benefit of and
be enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
Stearns, and their directors, officers and controlling persons (within the
meaning of federal securities laws). The Mortgage Loan Seller acknowledges and
agrees that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and

                                      L-23

<PAGE>
warranties respecting the Mortgage Loans) to the Trustee. Any person into which
the Mortgage Loan Seller may be merged or consolidated (or any person resulting
from any merger or consolidation involving the Mortgage Loan Seller), any person
resulting from a change in form of the Mortgage Loan Seller or any person
succeeding to the business of the Mortgage Loan Seller, shall be considered the
"successor" of the Mortgage Loan Seller hereunder and shall be considered a
party hereto without the execution or filing of any paper or any further act or
consent on the part of any party hereto. Except as provided in the two preceding
sentences, this Agreement cannot be assigned, pledged or hypothecated by either
party hereto without the written consent of the other parties to this Agreement
and any such assignment or purported assignment shall be deemed null and void.

                  SECTION 24. THE MORTGAGE LOAN SELLER. The Mortgage Loan Seller
will keep in full force and effect its existence, all rights and franchises as a
corporation under the Laws of the State of its incorporation and will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is necessary to perform its obligations
under this Agreement.

                  SECTION 25. ENTIRE AGREEMENT. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.

                  SECTION 26. NO PARTNERSHIP. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      L-24

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.

                                          EMC MORTGAGE CORPORATION

                                          By:
                                              ---------------------------------
                                          Name:   SUE STEPANEK
                                          Title:  EXECUTIVE VICE PRESIDENT

                                          BEAR STEARNS ASSET BACKED
                                          SECURITIES I LLC

                                          By:
                                              ---------------------------------
                                          Name:   BARON SILVERSTEIN
                                          Title:  VICE PRESIDENT

                                      L-25

<PAGE>

                                    EXHIBIT 1
                                    ---------
                            CONTENTS OF MORTGAGE FILE
                            -------------------------

         With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its designee, and which shall be delivered to the Purchaser or its
designee pursuant to the terms of this Agreement.

               (i) The original Mortgage Note, including any riders thereto,
          endorsed without recourse to the order of "U.S. Bank National
          Association", as Trustee for certificateholders of Bear Stearns Asset
          Backed Securities I LLC Asset Backed Certificates, Series 2004-AC4,"
          and showing to the extent available to the Mortgage Loan Seller an
          unbroken chain of endorsements from the original payee thereof to the
          Person endorsing it to the Trustee;

               (ii) the original Mortgage and, if the related Mortgage Loan is a
          MOM Loan, noting the presence of the MIN and language indicating that
          such Mortgage Loan is a MOM Loan, which shall have been recorded (or
          if the original is not available, a copy), with evidence of such
          recording indicated thereon (or if clause (x) in the proviso below
          applies, shall be in recordable form);

               (iii) unless the Mortgage Loan is a MOM Loan, the assignment
          (either an original or a copy, which may be in the form of a blanket
          assignment if permitted in the jurisdiction in which the Mortgaged
          Property is located) to the Trustee of the Mortgage with respect to
          each Mortgage Loan in the name of "U.S. Bank National Association", as
          Trustee for certificateholders of Bear Stearns Asset Backed Securities
          I LLC Asset Backed Certificates, Series 2004-AC4," which shall have
          been recorded (or if clause (x) in the proviso below applies, shall be
          in recordable form);

               (iv) an original or a copy of all intervening assignments of the
          Mortgage, if any, to the extent available to the Mortgage Loan Seller,
          with evidence of recording thereon;

               (v) the original policy of title insurance or mortgagee's
          certificate of title insurance or commitment or binder for title
          insurance, if available, or a copy thereof, or, in the event that such
          original title insurance policy is unavailable, a photocopy thereof,
          or in lieu thereof, a current lien search on the related Mortgaged
          Property and

               (vi) originals or copies of all available assumption,
          modification or substitution agreements, if any.

                  Provided, however, that in lieu of the foregoing, the Mortgage
Loan Seller may deliver the following documents, under the circumstances set
forth below: x) if any Mortgage, assignment thereof to the Trustee or
intervening assignments thereof have been delivered or are being delivered to
recording offices for recording and have not been returned in time to permit
their delivery as specified above, the Purchaser may deliver a true copy thereof
with a certification by the Mortgage Loan Seller or the title company issuing
the commitment for title insurance, on the face of such copy, substantially as
follows: "Certified to be a true and correct

                                      E-1-1

<PAGE>

copy of the original, which has been transmitted for recording"; and (y) in lieu
of the Mortgage Notes relating to the Mortgage Loans identified in the list set
forth in Exhibit J, the Purchaser may deliver a lost note affidavit and
indemnity and a copy of the original note, if available; and provided, further,
however, that in the case of Mortgage Loans which have been prepaid in full
after the Cut-Off Date and prior to the Closing Date, the Purchaser, in lieu of
delivering the above documents, may deliver to the Trustee and its Custodian a
certification of a Servicing Officer to such effect and in such case shall
deposit all amounts paid in respect of such Mortgage Loans, in the Master
Servicer Collection Account or in the Distribution Account on the Closing Date.
In the case of the documents referred to in clause (x) above, the Purchaser
shall deliver such documents to the Trustee or its Custodian promptly after they
are received. The Mortgage Loan Seller shall cause, at its expense, the Mortgage
and intervening assignments, if any, and to the extent required in accordance
with the foregoing, the assignment of the Mortgage to the Trustee to be
submitted for recording promptly after the Closing Date; provided that the
Mortgage Loan Seller need not cause to be recorded any assignment (a) in any
jurisdiction under the laws of which, as evidenced by an Opinion of Counsel
addressed to the Trustee delivered by the Mortgage Loan Seller to the Trustee
and the Rating Agencies, the recordation of such assignment is not necessary to
protect the Trustee's interest in the related Mortgage Loan or (b) if MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as mortgagee of record solely as nominee for Mortgage Loan Seller and its
successors and assigns. In the event that the Mortgage Loan Seller, the
Purchaser or the Master Servicer gives written notice to the Trustee that a
court has recharacterized the sale of the Mortgage Loans as a financing, the
Mortgage Loan Seller shall submit or cause to be submitted for recording as
specified above or, should the Mortgage Loan Seller fail to perform such
obligations, the Master Servicer shall cause each such previously unrecorded
assignment to be submitted for recording as specified above at the expense of
the Trust. In the event a Mortgage File is released to the Company or the
related Servicer as a result of such Person having completed a Request for
Release, the Custodian shall, if not so completed, complete the assignment of
the related Mortgage in the manner specified in clause (iii) above.

                                      E-1-2

<PAGE>

                                    EXHIBIT 2
                                   [Reserved]

                                      E-2-1
<PAGE>

                                    EXHIBIT 3
                                    ---------
                       MORTGAGE LOAN SCHEDULE INFORMATION
                       ----------------------------------

         The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:

          (i)   the loan number;

          (ii)  the Mortgage Rate in effect as of the Cut-off Date;

          (iii) the Servicer (or the Company, if it services the Mortgage Loan)
                and the Servicing Fee Rate;

          (iv)  the Net Mortgage Rate in effect as of the Cut-off Date;

          (v)   the maturity date;

          (vi)  the original principal balance;

          (vii) the Cut-off Date Balance;

          (viii) the original term;

          (ix)  the remaining term;

          (x)   the property type; and

          (xi)  the MIN with respect to each Mortgage Loan.

                                      E-3-1
<PAGE>

                                    EXHIBIT 4
                                    ---------
                       MORTGAGE LOAN SELLER'S INFORMATION
                       ----------------------------------

         All information in the Prospectus Supplement described under the
following captions: "SUMMARY - The Mortgage Loans," "THE MORTGAGE POOL,"
"SERVICING OF THE MORTGAGE LOANS - EMC" and "SCHEDULE A - Mortgage Loan
Statistical Data."

                                      E-4-1

<PAGE>

                                    EXHIBIT 5
                                    ---------
                             PURCHASER'S INFORMATION
                             -----------------------

         All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.

                                      E-5-1

<PAGE>

                                    EXHIBIT 6
                                    ---------
                             SCHEDULE OF LOST NOTES
                             ----------------------

                             Available Upon Request

                                      E-6-1

<PAGE>

                                   SCHEDULE A
                                   ----------

                 REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
                 -----------------------------------------------

                               PUBLIC CERTIFICATES
                               -------------------

                 CLASS            MOODY'S            S&P
                 -----            -------            ---
                  A-1               Aaa              AAA
                  A-2               Aaa              AAA
                  A-3               Aaa              AAA
                  A-4               Aaa              AAA
                  A-5               Aaa              AAA
                  A-6               Aaa              AAA
                  M-1               Aa2              AA
                  M-2               A2                A
                   B               Baa2              BBB

None of the above ratings has been lowered, qualified or withdrawn since the
dates of issuance of such ratings by the Rating Agencies.

                              PRIVATE CERTIFICATES
                              --------------------

                 CLASS            MOODY'S           S&P
                 -----            -------           ---
                   P             Not Rated       Not Rated
                   C             Not Rated       Not Rated
                  R-1            Not Rated       Not Rated
                  R-2            Not Rated       Not Rated
                  R-3            Not Rated       Not Rated

                                      A-1

<PAGE>

                                    EXHIBIT 7
                                    ---------

                       APPENDIX E - Standard & Poor's Anti-Predatory Lending
Categorization

Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.
<TABLE>
<CAPTION>

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
       STATE/JURISDICTION                   NAME OF ANTI-PREDATORY LENDING LAW/EFFECTIVE       CATEGORY UNDER APPLICABLE
                                                                DATE                          ANTI-PREDATORY LENDING LAW
-------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                                        <C>
Arkansas                                        Arkansas Home Loan Protection Act, Ark.  High Cost Home Loan
                                                Code Ann. ss.ss.23-53-101 ET SEQ.

                                                Effective July 16, 2003
-------------------------------------------------------------------------------------------------------------------------
Cleveland Heights, OH                           Ordinance No. 72-2003 (PSH), Mun. Code    Covered Loan
                                                ss.757.01 et SEQ.

                                                Effective June 2, 2003
-------------------------------------------------------------------------------------------------------------------------
Colorado                                        Consumer Equity Protection, Colo. Stat.   Covered Loan
                                                Ann. ss. 5-3.5-101 ET SEQ.

                                                Effective for covered loans offered or
                                                entered into on or after January 1,
                                                2003. Other provisions of the Act took
                                                effect on June 7, 2002
-------------------------------------------------------------------------------------------------------------------------
Connecticut                                     Connecticut Abusive Home Loan Lending     High Cost Home Loan
                                                Practices Act, Conn. Gen. Stat.
                                                ss.36a-746 ET SEQ.

                                                Effective October 1, 2001
-------------------------------------------------------------------------------------------------------------------------
District of Columbia                            Home Loan Protection Act, D.C. Code       Covered Loan
                                                ss.26-1151.01 ET SEQ.

                                                Effective for loans closed on or after
                                                January 28, 2003
-------------------------------------------------------------------------------------------------------------------------
Florida                                         Fair Lending Act, Fla. Stat. Ann.         High Cost Home Loan
                                                ss.494.0078 ET SEQ.

                                                Effective October 2, 2002
-------------------------------------------------------------------------------------------------------------------------
                                       L-7-1
<PAGE>

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
Georgia (Oct. 1, 2002 - Mar. 6, 2003)           Georgia Fair Lending Act, Ga. Code Ann.   High Cost Home Loan
                                                ss.7-6A-1 ET SEQ.

                                                Effective October 1, 2002 - March 6, 2003
-------------------------------------------------------------------------------------------------------------------------
Georgia as amended (Mar. 7, 2003 - current)     Georgia Fair Lending Act, Ga. Code Ann.   High Cost Home Loan
                                                ss.7-6A-1 ET SEQ.

                                                Effective for loans closed on or after
                                                March 7, 2003
-------------------------------------------------------------------------------------------------------------------------
HOEPA Section 32                                Home Ownership and Equity Protection Act  High Cost Loan
                                                of 1994, 15 U.S.C. ss.1639, 12 C.F.R.
                                                ss.226.32 and 226.34

                                                Effective October 1, 1995, amendments
                                                October 1, 2002
-------------------------------------------------------------------------------------------------------------------------
Illinois                                        High Risk Home Loan Act, Ill. Comp.      High Risk Home Loan
                                                Stat. tit. 815, ss.137/5 ET SEQ.

                                                Effective January 1, 2004 (prior to this
                                                date, regulations under Residential
                                                Mortgage License Act effective from May
                                                14, 2001)
-------------------------------------------------------------------------------------------------------------------------
Kansas                                          Consumer Credit Code, Kan. Stat. Ann.     High Loan to Value
                                                ss.16a-1-101 ET SEQ.                      Consumer Loan (ID.ss.16a3207)
                                                                                          and;

                                                Sections 16a-1-301 and 16a-3-207 became   High APR Consumer Loan
                                                effective April 14, 1999; Section         (ID.ss.16a3308a)
                                                16a-3-308a became effective July 1, 1999

-------------------------------------------------------------------------------------------------------------------------
Kentucky                                        2003 KY H.B. 287 - High Cost Home Loan   High Rate High Fee Mortgage
                                                Act, Ky. Rev. Stat. ss.360.100 ET SEQ.

                                                Effective June 24, 2003
-------------------------------------------------------------------------------------------------------------------------
Maine                                           Truth in Lending, Me. Rev. Stat. tit.     High Cost Home Loan
                                                9-A, ss. 8-101 ET SEQ.

                                                Effective September 29, 1995 and as
                                                amended from time to time
-------------------------------------------------------------------------------------------------------------------------
                                       L-7-2
<PAGE>

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Massachusetts                                   Part 40 and Part 32, 209 C.M.R. ss.32.00  Home Loan
                                                ET SEQ. and 209 C.M.R. ss.40.01 ET SEQ.

                                                Effective March 22, 2001 and amended
                                                from time to time
-------------------------------------------------------------------------------------------------------------------------
Nevada                                          Assembly Bill No. 284, Nev. Rev. Stat.    High Cost Home Loan
                                                ss.598D.010 ET SEQ.

                                                Effective October 1, 2003
-------------------------------------------------------------------------------------------------------------------------
New Jersey                                      New Jersey Home Ownership Security Act    High Cost Home Loan
                                                of 2002, N.J. Rev. Stat. ss.46:10B-22 ET
                                                SEQ.

                                                Effective for loans closed on or after
                                                November 27, 2003
-------------------------------------------------------------------------------------------------------------------------
New Mexico                                      Home Loan Protection Act, N.M. Rev.       High Cost Home Loan
                                                Stat. ss. 58-21A-1 ET SEQ.

                                                Effective as of January 1, 2004; Revised
                                                as of February 26, 2004
-------------------------------------------------------------------------------------------------------------------------
New York                                        N.Y. Banking Law Article 6-l              High Cost Home Loan

                                                Effective for applications made on or
                                                after April 1, 2003
-------------------------------------------------------------------------------------------------------------------------
North Carolina                                  Restrictions and Limitations on High      High Cost Home Loan
                                                Cost Home Loans, N.C. Gen. Stat.
                                                ss.24-1.1E ET SEQ.

                                                Effective July 1, 2000; amended October
                                                1, 2003 (adding open-end lines of
                                                credit)
-------------------------------------------------------------------------------------------------------------------------
Ohio                                            H.B. 386 (codified in various sections    Covered Loan
                                                of the Ohio Code), Ohio Rev. Code Ann.
                                                ss. 1349.25 ET SEQ.

                                                Effective May 24, 2002
-------------------------------------------------------------------------------------------------------------------------
Oklahoma                                        Consumer Credit Code (codified in         Subsection 10 Mortgage
                                                various sections of Title 14A)

                                                Effective July 1, 2000; amended
                                                effective January 1, 2004
-------------------------------------------------------------------------------------------------------------------------
                                       L-7-3

<PAGE>

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
South Carolina                                  South Carolina High Cost and Consumer     High Cost Home Loan
                                                Home Loans Act, S.C. Code
                                                Ann. ss.37-23-10 ET SEQ.

                                                Effective for loans taken on or after
                                                January 1, 2004
-------------------------------------------------------------------------------------------------------------------------
West Virginia                                   West Virginia Residential Mortgage        West Virginia Mortgage Loan Act Loan
                                                Lender, Broker and Servicer Act, W. Va.
                                                Code Ann. ss.31-17-1 ET SEQ.

                                                Effective June 5, 2002
-------------------------------------------------------------------------------------------------------------------------

</TABLE>

<TABLE>
<CAPTION>

STANDARD & POOR'S COVERED LOAN CATEGORIZATION
-----------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
       STATE/JURISDICTION
       ------------------
-------------------------------------------------------------------------------------------------------------------------

<S>                                             <C>                                        <C>
Georgia  (Oct.  1, 2002 - Mar. 6,               Georgia Fair Lending Act, Ga. Code          Covered Loan
2003)                                           Ann.ss.ss.76A1 ET SEQ.

                                                Effective October 1, 2002 March 6, 2003

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

New Jersey                                      New Jersey Home Ownership Security Act      Covered Home Loan
                                                of 2002, N.J. Rev. Stat. ss. 46:10B22 ET
                                                SEQ.

                                                Effective November 27, 2003 July 5, 2004

-------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------

       STATE/JURISDICTION
       ------------------
-------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                                          <C>
Georgia  (Oct.  1, 2002 - Mar. 6,               Georgia Fair Lending Act, Ga.Code Ann.       Home Loan
2003)                                           ss.76A1 ET SEQ.

                                                Effective October 1, 2002 March 6, 2003
-------------------------------------------------------------------------------------------------------------------------

                                       L-7-4

<PAGE>
-------------------------------------------------------------------------------------------------------------------------
New Jersey                                      New Jersey Home Ownership Security Act      Home Loan
                                                of 2002, N.J. Rev. Stat. ss.46:10B22 ET
                                                SEQ.

                                                Effective for loans closed on or after
                                                November 27, 2003
-------------------------------------------------------------------------------------------------------------------------
New Mexico                                      Home Loan Protection Act, N.M. Rev.         Home Loan
                                                Stat. ss.5821A1 ET SEQ.

                                                Effective as of January 1, 2004; Revised
                                                as of February 26, 2004

-------------------------------------------------------------------------------------------------------------------------
North Carolina                                  Restrictions and Limitations on High        Consumer Home Loan
                                                Cost Home Loans, N.C. Gen. Stat.
                                                ss.241.1E ET SEQ.

                                                Effective July 1, 2000; amended October
                                                1, 2003 (adding open end lines of credit)
-------------------------------------------------------------------------------------------------------------------------
South Carolina                                  South Carolina High Cost and Consumer       Consumer Home Loan
                                                Home Loans Act, S.C. Code Ann. ss.372310
                                                ET SEQ.

                                                Effective for loans taken on or after
                                                January 1, 2004
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       L-7-5EXHIBIT 10.1
------------

                          MUTUAL GENERAL RELEASE
                          ----------------------

      THIS MUTUAL GENERAL RELEASE is made effective as of the 5TH day of
MAY, 2004, by LAKES OF THE MEADOW VILLAGE HOMES CONDOMINIUM NO. EIGHT
MAINTENANCE ASSOCIATION, INC., a Florida corporation not for profit (the
"Association"), on behalf of itself and, to the fullest extent permitted
under applicable law, on behalf of its members (individually, an
"Association Party" and collectively, the "Association Parties"), and
ARVIDA/JMB PARTNERS, L.P., a Delaware limited partnership d/b/a Arvida/JMB
Partners, Ltd. ("Arvida/JMB").  (The Association Parties, on the one hand,
and Arvida/JMB, on the other hand, are collectively the "Parties" and each
is a "Party.")

      WHEREAS, the Association Parties and Arvida/JMB have entered into a
Settlement Agreement (the "Settlement Agreement") dated March 9, 2004,
relating to the Lawsuit;

      WHEREAS, pursuant to the terms of the Settlement Agreement, the
Parties agreed to enter into this Mutual General Release; and

      WHEREAS, this Mutual General Release is intended to extinguish all
obligations of the Parties to each other regarding their respective Claims
except as otherwise provided below.

      NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, the Association Parties, on
behalf of themselves and their Related Parties, on the one hand, and
Arvida/JMB, on behalf of itself and its Affiliates, on the other hand, do
hereby forever discharge and fully release each other from: (a) all manner
of action and actions, cause and causes of action, (b) claims, liabilities
or obligations of every kind and nature, in law or equity, by statute or
otherwise, suits, debts, dues, sums of money, accounts, indemnities,
guarantees, warranties, reckonings, bonds, bills, covenants, contracts,
controversies, agreements, promises, and variances, and (c) damages
(including, without limitation, damages to wood accessories, trimmings and
treatments, porches, columns, railings, stairs, fascia boards, trusses,
walls, tiles, carpets, lamps, personal belongings, roofs and other areas of
the Condominium Units included in the Association's condominium),
judgments, executions, losses, costs or expenses of every kind and nature
(including, without limitation, costs to remediate, replace or complete,
storage and handling expenses, alternative living expenses, expenses for
loss of use or enjoyment or for inconvenience, loss of value and loss of
financing or refinancing opportunity), compensation and rights of
subrogation, contribution, indemnification or reimbursement, now accrued or
hereafter to accrue (whether known or unknown, anticipated or
unanticipated, suspected or unsuspected, direct, indirect, consequential,
fixed, vested or contingent, asserted or unasserted), which any of the
Association Parties and their Related Parties, on the one hand, and
Arvida/JMB and its Affiliates, on the other hand, had, now has, or may in
the future have against each other arising out of or relating to the
following: (i) any of the subject matters of the Lawsuit (including,
without limitation, the design and/or construction of the Condominium Units
in the Village Homes, including latent defects and other damage of every
kind and nature to such Condominium Units arising out the actions or
omissions of Arvida/JMB, its Affiliates, or any architects, engineers or
subcontractors engaged at any time by or on behalf of Arvida/JMB or any of
its Affiliates); (ii) any order or action of the Miami-Dade County, Florida

                                     1

<PAGE>

Unsafe Structures Board and/or any authority with jurisdiction to review
orders or actions of that Board with respect to any of the Association
Parties' property or the Village Homes, or any order or action of any other
governing body with jurisdiction over such property or the Village Homes,
whether any such order or action has already been issued or taken or occurs
in the future; (iii) any remediation, alteration or construction-related or
design-related activities undertaken in regard to the Condominium Units
included in the Village Homes, whether undertaken by or on behalf of
Arvida/JMB, any of its Affiliates, any architects, engineers or
subcontractors engaged at any time by or on behalf of Arvida/JMB or any of
its Affiliates, or by any of the Association Parties or any other Person,
and whether already undertaken or occurring in the future; (iv) the failure
of any Association Parties or any other condominium association or
condominium owners in the Village Homes to undertake appropriate and/or
timely remediation or alterations to cure all construction and design
defects of every kind and nature (including, without limitation, latent
defects) of, and all other damage to, their Condominium Units in the
Village Homes; or (v) the past, present or future governance, operation,
maintenance or administration of the Association, any other Village Homes
condominium association, or any of their respective affairs or property,
including, without limitation, the application of the settlement payment
made by Arvida/JMB pursuant to the Settlement Agreement (all of the
foregoing matters to be discharged and released herein being hereinafter
referred to as the "Released Claims"); PROVIDED, HOWEVER, that the Parties
do not release each other from their respective obligations and duties
under the Settlement Agreement, this Mutual General Release or any other
Related Agreement. Without limiting the generality of the foregoing, the
Released Claims include claims or demands for consequential damages;
special damages; punitive damages; prejudgment interest; attorneys' fees
and expenses, experts' fees and expenses, consulting fees and expenses; and
any loss, cost, expense, fine or other obligation assessed or imposed
against any of the Association Parties pursuant to an order of any
governmental authority with jurisdiction over their property or the Village
Homes, or arising out of the actions or the failure to act by any of the
Association Parties, or any other Village Homes condominium association or
condominium owner or any other Person, with respect to an order of any
governmental authority pertaining to their property or the Village Homes
(including, without limitation, any action or failure to act in response to
the Deficiency Notices concerning any Condominium Units in the Village
Homes). Further, and without limiting the generality of the foregoing, (x)
the Association Parties acknowledge and agree that the Released Claims of
the Association Parties and their Related Parties include any and all
claims, demands, causes of action, damages and other rights or remedies
that any of them has asserted or could have asserted against Arvida/JMB or
any of its Affiliates in the Lawsuit (including, without limitation, that
Arvida/JMB or any of its Affiliates is a "successor developer" to Disney or
any of its Affiliates); and (y) Arvida/JMB acknowledges and agrees that the
Released Claims of Arvida/JMB and its Affiliates include any and all
claims, demands, causes of action, damages and other rights or remedies
that Arvida/JMB or any of its Affiliates has asserted or could have
asserted against any of the Association Parties or any of their Related
Parties in the Lawsuit. The Association Parties covenant that neither they
nor any of their Related Parties will sue Arvida/JMB or any of its
Affiliates for or  in respect of any Released Claims of the Association
Parties or their Related Parties.

      To the extent that the Parties (or their Related Parties or
Affiliates) have Claims or any other rights or remedies against Disney or
any of its Affiliates, nothing in the Settlement Agreement, this Mutual
General Release or any other Related Agreement shall release, alter,
hinder, abrogate or otherwise adversely affect, and the Parties hereby
reserve, any such Claims and other rights and remedies (including without
limitation any causes of action for indemnification or contribution)
against Disney or any of its Affiliates. Further, nothing in this Mutual
General Release shall be deemed to constitute a release or waiver by any of
the Association Parties of any claims, demands, causes of action, damages
or other rights or remedies that any of the Association Parties now have or
may in the future have against any other condominium association (or the
members of its board of directors) in the Village Homes.

                                     2

<PAGE>

      The Association Parties and Arvida/JMB acknowledge that each has had
ample time and opportunity to review the following matters with its legal
counsel prior to signing this Mutual General Release: (i) the consideration
for this Mutual General Release; (ii) all Released Claims each of the
Association Parties and their Related Parties and Arvida/JMB and its
Affiliates may have or expect to have against the other; (iii) the form of
this Mutual General Release; (iv) the legal effect and ramifications of
executing and delivering this Mutual General Release; and (e) all other
matters and information deemed to be necessary or material in a decision to
execute and deliver this Mutual General Release.

      The Association Parties, on the one hand, and Arvida/JMB, on the
other hand, acknowledge that they are aware they may hereafter discover
facts in addition to or different from those which they now know or believe
to be true with respect to matters relevant to this Mutual General Release,
but it is their intention to, and they do hereby, fully, finally and
forever settle and release any and all Released Claims as to each other and
their respective Related Parties and Affiliates, without regard to the
subsequent discovery or existence of such additional or different facts.

      All capitalized terms used but not otherwise defined in this Mutual
General Release shall have the meanings ascribed to them in the Settlement
Agreement.

      Nothing stated herein shall be deemed to be or construed as an
admission by any Party of any liability to the other Party or any other
Person.

      This Mutual General Release shall be governed and construed in
accordance with the internal laws of the State of Florida. The terms and
provisions of this Mutual General Release are severable. In the event that
any term or provision of this Mutual General Release is determined by an
appropriate judicial authority to be illegal, invalid or otherwise
unenforceable, such term or provision shall be given its nearest legal
meaning or be construed as deleted, as such authority determines, and the
remainder of this Mutual General Release shall be construed to be in full
force and effect. Arvida/JMB may cause a Notice of Settlement to be
recorded among the public records of Miami-Dade County, Florida with
respect to any or all the Association Parties (and any of their
successors-in-interest or successors in title) and their property.

      The Association Parties hereby represent and warrant to Arvida/JMB
and its Affiliates that they and their Related Parties are the owners of
their respective Released Claims and that they and their Related Parties
have not previously expressly or impliedly assigned, transferred, pledged
or otherwise disposed of (whether voluntarily or by operation of law) any
of such Released Claims or any interest therein.

      The Settlement Agreement, this Mutual General Release, the other
Related Agreements and any other instruments and documents contemplated
thereby or hereby (collectively, the "Settlement Documents") incorporate,
embody, express and supersede all other agreements and understandings
between the Parties with respect to the Settlement, but shall not
supersede, rescind or adversely affect any other settlement or release of
claims previously entered into by the Parties. There are no representations
upon which either Party relied in making this Mutual General Release that
are not expressly set forth in the Settlement Agreement or this Mutual
General Release. No purported modification or change to the terms of this
Mutual General Release shall be enforceable or effective unless it is in
writing and signed by the authorized representative of the Party affected
by the modification or change. This Mutual General Release shall be binding
upon and inure to the benefit of the Association Parties, their Related
Parties, Arvida/JMB, its Affiliates and the respective successors and
permitted assigns of such Persons (collectively, the "Released Parties").
Without limiting the generality of the previous sentence, it is the
intention of the Parties that, to the extent permitted by applicable law,
this Mutual General Release shall be binding upon, and shall inure to the

                                     3

<PAGE>

benefit of, the Association Parties and the Related Parties of each
Association Party and Arvida/JMB and the Affiliates of Arvida/JMB, so that
the Released Claims of the Association Parties and the Related Parties of
the Association Parties against Arvida/JMB and its Affiliates and the
Released Claims of Arvida/JMB and the Affiliates of Arvida/JMB against the
Association Parties and their Related Parties shall be fully discharged and
forever released on the terms and conditions set forth in this Mutual
General Release. Notwithstanding the foregoing, this Mutual General Release
is not intended to benefit or release any Person other than the Released
Parties, and it is understood that Disney and its Affiliates are not
"Released Parties." This Mutual General Release may be executed in
counterparts. Each counterpart shall be deemed an original and, when taken
together with another signed counterpart, shall constitute one Mutual
General Release.  This Mutual General Release is not contingent or
dependent upon any other release of claims between Arvida/JMB and any other
Person.

      The Association Parties represent that, other than the Lawsuit, they
have not filed or commenced any charges, claims, or grievances with any
governmental agency or tribunal, or filed or commenced any proceeding at
law or otherwise, consisting of or reflecting in any way any of the
Released Claims.

      The Association acknowledges that it has participated in the drafting
of this Mutual General Release and that the language of all parts of this
Mutual General Release shall in all cases be construed as a whole,
according to its fair meaning, and not strictly for or against any Party.

                        [SIGNATURE PAGE TO FOLLOW]

                                     4

<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Mutual General
Release as of the date first written above.

                              ASSOCIATION PARTIES:

                              LAKES OF THE MEADOW VILLAGE HOMES
                              CONDOMINIUM NO. EIGHT MAINTENANCE
                              ASSOCIATION, INC.,
                              a Florida corporation not for profit,
                              on its behalf and, to the fullest
                              extent permitted under applicable law,
                              on behalf of its members

                              By:    /s/ Nancy England
                                     ------------------------------

                              Name:  Nancy England
                              Title: Secretary/Treasurer

Witness:    /s/ Jared Gelles
            --------------------

Print Name: Jared Gelles

                              ARVIDA/JMB:

                              ARVIDA/JMB PARTNERS, L.P.,
                              a Delaware limited partnership,
                              d/b/a Arvida/JMB Partners, Ltd.

                              By:    Arvida/JMB Managers, Inc.
                                     General Partner

                              By:    /s/ Gary Nickele
                                     ------------------------------

                              Name:  Gary Nickele
                              Title: President

Witness:    /s/ Marilyn Corbett
            --------------------

Print Name: Marilyn Corbett

                                     5

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